The Ugly Math: GM, Ford, other Legacy Automakers Throw Hundreds of Billions at EVs, Only Auto Segment that’s Growing. Tesla Made Them Do It

It’s a zero-sum game that’s eating up a huge amount of cash. But Electric Utilities are loving it.  

By Wolf Richter for WOLF STREET.

In the press release for its investor conference today, GM said that it plans to double its annual revenues by the end of the decade as it transitions to EVs. In terms of the math, 8% in price increases a year for nine years would do that without having to jump through the hoops of selling more vehicles. GM’s average transaction price in Q3 in the US jumped by 20% year-over-year. So…  I don’t see this statement as sign of an increase in volume, but an increase in prices.

GM confirmed that logic by pointing out that it expects its margins to increase as it transitions to EVs. It said that half its manufacturing capacity in North America and China will be capable of producing EVs by 2030.

Sales growth in this industry is obtained by selling higher-priced vehicles. But volume growth, in terms of the number of vehicles sold, is hard to come by in the auto industry. There are some developing economies where sales are still growing. But there has been no growth in developed economies in two decades.

In the US, sales peaked in 2000 at 17.4 million vehicles, then fell off, then plunged to 10.4 million vehicles in 2009, and then recovered to hit 17.5 million vehicles in 2016, and that was it. Sales have been falling ever since. Last year, the industry sold 14.6 million vehicles. This year, may be around 15 million vehicles.

But the one segment that is growing in leaps and bounds is EVs. And that’s what GM’s investor conference was about – creating investor excitement about this “transition to EVs,” from a Chevrolet crossover “priced around $30,000,” to the high-end Hummer EV pickup truck with 1,000 hp.

What the conference was not about is that the transition to EVs cannibalizes sales of other vehicles because the auto industry in developed economies, including the US, has not seen any growth at all in vehicle sales. And the transition to EVs is a zero-sum game.

And it’s a very costly transition.

The big legacy automakers – GM, Ford, FCA owned by Stellantis, Volkswagen, BMW, Mercedes, the Japanese automakers, the Korean automakers – have all announced investments to the tune of billions of dollars each, or tens of billions of dollars each, in creating their EV models, building EV manufacturing plants, beefing up their software operations, and creating or expanding research operations, manufacturing plants, and supply chains for batteries.

The amounts of money going into these efforts by legacy automakers are just mind-boggling. GM announced that it would invest $35 billion through 2025 in EVs and driver-assistance and self-driving technologies. Volkswagen – along with Toyota, the largest automaker in the world – plans to invest $86 billion over the next five years on its EV programs.  Ford is investing over $30 billion in its EV programs through 2025. Tesla burned through more than $20 billion in cash it had raised from investors to get to where it is today (it raised more cash last year through huge equity sales, but hasn’t burned that cash yet).

The auto industry has never seen this type of mega-investment wave – and investor enthusiasm is going to be required to fund it.

The legacy automakers are not doing it because they want to; they’re doing it because they have to in order to not get run over by Tesla and by a bunch of Chinese automakers.

Tesla hit BMW and Mercedes Benz right where it hurts with its low-volume luxury sports sedan (Model S) and then with the near-luxury Model 3. And then it came out with cheaper models, including a compact SUV, and this is the mass market, this is the sweet spot in the US, this is where the volume is. And it has been threatening to come out with a pickup truck, that would hit Ford, which has already abandoned sedans in the US and is dependent on its F-series trucks, the best-selling vehicle of all times.

Tesla shook up the legacy automakers that had fallen asleep, and now it’s life-and-death for them. EVs are the only segment that is growing, and the growth rates are huge, and they’re doing so at the expense of vehicles with internal combustion engines (ICE). There is no net gain in overall sales volume. This is a zero-sum game at best.

The math is terrible for legacy automakers – requiring huge investments to produce uncertain earnings and big risks. But they finally came to grips with it.

In addition, the industry now has to contend with numerous startups around the world, including a dozen or so in the US and something like 300 in China, that are all clamoring to become “the next Tesla.”

Startups don’t have to make money. They can burn cash for years, and get more cash from investors, and they can undercut the legacy automakers and sell below cost because they’re expected to do so. They will put pricing pressure on the legacy automakers.

Pickups with 600 hp or even a 1,000 hp? EVs make that possible. Ford’s F-150 Lightning EV is already being market with over 600 hp. Ford says it has 150,000 orders for it. GM is bringing out a lineup of trucks, whose top-end, the Hummer EV is being marketed with 1,000 hp.

These are crazy numbers. No one needs this much power in a pickup, but hey, this is a new thing, and EVs make it possible without breaking a sweat.

Pickups and SUVs define the US market. Big is good. Powerful is good. Electric motors are small. They have a nearly flat torque curve, which is ideal for performance driving, towing, and stop-and-go traffic. And they use the energy from braking with their electric motors to charge the battery. Motors with a combined 600 hp can generate a lot more energy from braking, and can brake harder, than a 200 hp motor. Long steep downhills with a big trailer? Stop and go traffic? Every time the driver steps on the brake, EVs charge the battery.

The problem is the battery, and that’s where tens of billions of dollars and much of the research efforts are flowing into. GM has already learned first-hand how expensive it can get when the battery that someone else manufactured has flaws and ends up burning down the cars.

The key technology for EVs is the battery technology. That’s where the costs are, and the challenges. The rest of the EVs is much cheaper to manufacture than ICE vehicles.

Given the small size of powerful electric motors between the axles, front and back, and the ability to put the battery packs where the floorboard used to be – the so-called skateboard platform – automakers have a design freedom that they don’t have with ICE vehicles. Here’s GM’s EV platform:

But so far, automakers have not taken advantage of this design freedom. They have been sticking to the classic lines designed for ICE vehicles, worried that a radical design change could turn off consumers.

But profits, after billions of investments, could be thin.

Combined, automakers will plow hundreds of billions of dollars into the EV segment for years to come. As competition in the EV segment mounts, profits could be thin.

Overall sales volume of EVs and ICE vehicles combined is going to be long-term stagnant at best, a zero-sum game. An EV sold likely means an ICE vehicle that wasn’t sold. For automakers this could mean cannibalizing very profitable sales of ICE vehicles with less profitable EVs.

And this is what they get for investing hundreds of billions of dollars into this segment.

For people who have watched this industry for decades, this is the most exciting moment. The industry had become calcified. Now change is afoot – a change forced upon them by the market.   There will be shakeouts too. I’m not sure how the investors will fare. But they get to do their own math.

Utilities are loving Evs. They’re practically giddy.

In the US, the problem that electric utilities have is two-fold:

1. Enormous idle capacity at night when electricity demand is small compared to peak demand during the day. Capacity is designed for peak demand (hot afternoons in the summer, for example). For the rest of the time, some of this capacity sits there and costs money, but doesn’t generate revenues. Idle capacity is expensive for utilities – and rate payers are paying for it.

2. Electricity sales have been stagnant for years. For the US overall, electricity sales by electric utilities to the end users, such as households and industrial installations, has gone nowhere in over a decade, due to higher efficiencies of electrical equipment (LEDs, A/Cs, etc.), the impact of rooftop solar, and other factors:

It varies by state. Below is a chart of electricity sales in California and Texas. In California, EV penetration is by far the highest in the US. In Texas, EV penetration is among the lowest in the US.

In California, electricity sales have trended lower for over a decade, and the growth of EV charging has not halted the decline in electricity sales. The decline started with the push for energy efficiency (LEDs, appliances, industrial equipment, A/Cs, building insulation, etc.).

Even in Texas, electricity sales only increased by a total of 9% in 10 years — less than 1% per year! This is a no-growth industry for utilities even in Texas, and more growth would make their investors exceedingly happy.

EVs are going to solve both of those problems for electric utilities: They will increase demand, and they will increase demand mostly at night when people charge up their cars in their garages, and thus they’re reducing this enormous and costly idle capacity at night.

In areas where time-of-use billing has been implemented, ratepayers get cheaper electricity at night as an inducement to use the idle capacity – and they’d charge their EVs with cheaper juice.

Electric utilities are ecstatic about EVs. Selling electricity is their business. Capacity additions to meet growing demand are easy to fund when utilities can demonstrate that these investments will generate revenue growth.

That’s how utilities operate: They make a big capital investment, such as a power plant, with cheaply borrowed money, that produces revenue growth and income growth for decades. The stagnating demand environment over the past decade challenged that business model. And demand from EVs, when it finally starts to show up, would be a big boost for utilities.

Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

Classic Metal Roofing Systems, our sponsor, manufactures beautiful metal shingles:

  • A variety of resin-based finishes
  • Deep grooves for a high-end natural look
  • Maintenance free – will not rust, crack, or rot
  • Resists streaking and staining

Click here or call 1-800-543-8938 for details from the Classic Metal Roofing folks.

  218 comments for “The Ugly Math: GM, Ford, other Legacy Automakers Throw Hundreds of Billions at EVs, Only Auto Segment that’s Growing. Tesla Made Them Do It

  1. Mike says:

    If legacy auto producers were smart, they would try to partner with Tesla and just rebrand the cars. Basically go the same route as desktop, laptop and smartphone vendors. They all use Foxconn, and Tesla could do the same for EVs.

    Why waste all that money on manufacturing a product that will be substandard and behind the curve when they can just use the Tesla platform.

    • Wolf Richter says:

      Mike,

      There is not a lot of IP in that kind of platform. That’s part of the problem for the industry. Anyone can do it. The electrical platform is the easy part. EVs are easy to build.

      The hard part is the battery. Tesla has some IP there, but the battery cells come from suppliers such as Panasonic and CATL.

      • RightNYer says:

        Right, so what investments are the legacy makers really making? Are they trying to build their own batteries instead of buying them from Panasonic and CATL?

        • Wolf Richter says:

          RightNYer,

          Developing a new vehicle is very expensive and takes years. A new basic ICE vehicle costs about $1 billion to develop and takes 3-4 years, even if it has no new IP in it.

          Because manufacturing processes are different for EVs, automakers are building new plants, or are retrofitting old plants to be dedicated EV plants.

          Building factories, design & development, research, testing, consumer research, supply chain buildup, and big investments in battery tech, etc. All that costs a lot of money.

          GM is coming out with 30 new models. That’s a huge number to design and build.

        • CCCB says:

          Right now, EV’s are toys for the wealthy. Lucid’s new car will cost $139,000. Tesla $90k. Porsche $150k+

          And what are they powered by? Nuclear, coal, natural gas & oil powered utility plants generating the electricity running all those chargers.

          Not much green here except the green coming out of taxpayers’ pockets to subsidize the wealthy’s latest toys

        • Wolf Richter says:

          CCCB,

          “Right now, EV’s are toys for the wealthy.”

          The price of the 2021 Model 3 base version was $40,000 before state tax rebates (federal rebates expired for Teslas). This is below the current average transaction price for all US vehicles sold of $41,000.

          A base Model 3 is not an econobox. It’s a sports sedan, top speed of 140 mph, 0-60 in 5.3 seconds.

          The new 2022 Model 3 available next year (I just checked: April is the ship date if you order today) is $42,000 — also before state tax rebates. By then, the average transaction price for all US vehicles will likely be over $45,000.

          Yes, new vehicles are very expensive. But EVs are not more expensive than ICE vehicles.

      • Joe Saba says:

        ONLY viable reason they make them
        IS TAX CREDITS feds throw at them to be GREEN
        like solar – not worth 1/2 cost if you don’t need tax credits – ie you don’t have TAX LIABILITY

        • Roger Pedactor says:

          That’s part of it. As it stands people who drive alot won’t like electric cars. Charge times are still far too long.

          What the real push is for cars as a service. Push the sales price up enough and nobody can afford them, and this isn’t just leasing. This is basically Zipcar on steroids. Socialist transportation.

          It’s very interesting to watch Japan in the automotive space. They hate China. They will do anything they can, even push hydrogen cells which are basically completely unviable, to avoid further reliance on Chinese rare Earth’s.

          I think they will pay lip service and bide their time and just when nobody can afford new cars they and China will swoop in with entire lines of cheap gas or hybrid vehicles.

        • Sams says:

          To Roger Pedactor, I see noting socialist transportation with cars as a service. At least not how it will be practiced in the USA.

          Transportation as service will be full blown “free” rentier capitalism. Or at the most regulated heavily in favour of the provider by those that pay the campaign fees.

        • Greg says:

          A BIG ALSO, In Canada the Federal and Ontario provincial gvt is donating billions$$$ annually to Ford and GM. The politicos call it an investment but is direct welfare payments. Not only direct welfare payments but also gvt subsidies when the consumer buys an EV!
          Great article Wolf.

        • char says:

          @roger

          Batteries don’t use rare earth. Some electric motors do but hydrogen cars need the same motors*.

          *Hydrogen cars can’t accelerate as fast as a BEV so you could use smaller motors so maybe a little less rare earth per car. But Hydrogen has the problem with the hard limited life of the gas tank so you need to build more cars which may bean advantage for a car maker.

        • RP: The solution is better traffic flow and coordinated autonomous vehicles can achieve that goal. Going to work means being crammed into automated golf carts with robot drivers. Did you ever watch the bicyclist tracking with you while you are driving in traffic, you get ahead and he catches up at the stop light, and you wonder, what I am doing wrong, I have 300hp! Now you can have 600hp!

        • Dave A Durnan says:

          We have to wean ourselves off fossil fuels. The future of our planet earth is at stake.

        • RH says:

          Roger Pedactor,

          Of course, Japanese may return the overwhelming hatred that the CCP has fomented against Japanese people. If very rapid charging is not available soon, fuel cells or other alternatives will remain compelling for those without their own garages.

          That is why Tesla’s valuation is ludicrous. Also, the Ponzi nature of most, mainland, Chinese companies will slowly get recognized by more investors. Already, China’s real estate developers are paying higher yields on bond rollovers.

          Thus, I would bet on Japan’s well-run companies every time. China’s companies were able to dump products produced via CCP subsidies to drive competitors out of business. Now, Of course, prices of products produced by those same CCP producers have gone higher after competition vanished.

      • Steve says:

        Don’t comment much but recently read about Iron-air battery tech. Discussion was centered around power plants and houses as scaling heavy iron batteries is easier.

        However, what are your thoughts on this being viable for cars? With the ‘claimed’ 100wh life, this seems promising.

        • Wolf Richter says:

          I let the engineers solve those kinds of problems. Anything that is a research finding today, or an experiment, in terms of batteries, will take at least 10 years to make it into commercial production, if it proves viable and ever gets that far.

        • Nick Kelly says:

          Battery research is fundamental science in chemistry and maybe physics ( at the atomic level the two merge. Rutherford, discoverer of the nucleus, depreciated chemistry but got his first Nobel in chemistry)

          Re: Apple’s buzz about battery research and impending breakthrough, this is completely out of their wheelhouse. Sure they can hire people, but this kind of research is more MIT stuff. Your typical guy at this level is driven but not money driven. Someone borrowed a book off Einstein and found an old uncashed check for several K, at least 30K today.

          A thing to remember about a gallon of gasoline: it can’t release energy by itself. It gets the other part of the reaction from ambient air in huge volumes. A battery containing an equal density of energy will always have the possibility of self-immolation.

    • MCH says:

      This is basically the innovator’s dilemma right out of Christensen’s book. The only difference is that the legacies managed to respond in time because unlike consumer electronics, the trends and pace of adaption is slower, and the barriers to entry are huge.

      Otherwise all the legacies would be dead

    • intosh says:

      The analogy with the PC is flawed at best.

      First of all, Tesla doesn’t even remotely have the capacity to build cars for another brand, let alone all those “legacy brands”. In the PC world, there are many more players (ODMs) than Foxconn:

      https://en.wikipedia.org/wiki/List_of_laptop_brands_and_manufacturers#Original_design_manufacturers_(ODMs)

      Foxconn is not even the largest.

      Second of all, a car is not like a PC. For laptop and desktop PC, the differentiation is essentially the relative simple and inexpensive exterior casing. Cars? The differentiation must be with the interior configuration and the materials, and with the chassis. There is no way a single manufacturer is able to build cars with all the different configurations that the various brands demand.

      Third, legacy brands have existing plants and workers. These can’t just all vanish or be sold off.

      Finally, “behind the curve” is an exaggeration. One can argue that many new entries (e.g. Kia EV6, Hyundai Ioniq 5) are closing the gap. And this is happening relatively quickly. It is absurd to suggest that legacy brands just throw in the towel after a couple of iterations.

      • char says:

        Tesla wouldn’t be the laptop maker but Intel in this example. But why would the car makers follow this model. Only a very small part of the price of a laptop ends up with the assemblers. Way to liitle for the car companies to still function as they did.

        • intosh says:

          If Telsa provides the battery+software and the car makers are responsible for slapping on the chassis and the interior, that business model (which is not different from many automobile partnerships in the past) might work. I can imagine some desperate car makers could end up doing that.

    • Richard Greene says:

      Tesla reliability (three months in service) was the worst in the industry in 2021.

      Tesla dependability (three years in service) was fourth from last in the industry in 2021.

      Data from J. D. Powers surveys

      Who wants to slap their own nameplate
      on those losers ?

      • Massbytes says:

        JD Powers is pay to play and the items they most criticized about the Tesla were more fit and finish than anything serious. Strange that Tesla’s customer satisfaction ratings are very high since Powers painted them as not reliable.

        • Richard Greene says:

          J.D. Powers is a survey of customers respected in the auto industry.

          The problems are reported by customers.

          Three years in service is way past the “fit and finish” issues..

          Tesla is losing money selling cars. They’re making money selling regulatory credits. And the credit sales will be going away as other manufacturers build more EVs. Based on their lifetime cash flow and temporary method of earning profits with regulatory credits, Tesla is close to becoming a Ponzi scheme in a few years.

      • JakSiemasz says:

        Follow the $$$. Tesla MY will soon be the most popular vehicle sold in the world.

        • Richard Greene says:

          Tesla sold 0.5 million vehicles in 2020
          (all models combined)

          Toyota sold over 1.1 million Corollas in 2020

          Toyota sold almost 1.0 million RAV4’s in 2020

          Ford sold almost 1.0 million F-Series pickup trucks in 2020

          What are you talking about?

      • DV says:

        This is exactly the point. Further down the road there will be multiple issues with Teslas and EV in general, because of many things – battery failures (you cannot be expected to drive without some bumps here and there), then electronics that control everything. Maybe the electric part is the easiest, but still if you miss something and get into water of any serious depth, you lose your car.
        Not to say if you get into any even not so serious accident. This is in many case will mean a death sentence to your EV. Add deicing agents on the roads up north.

        So the more they produce and sell, the more issues will surface beyond already known such as unexpected battery fires.

        The additional hurdle with Tesla is that it has no adequate service. And this will be more and more obvious as more vehicles are sold. You simply cannot charge premium prices, if do not provide premium service.

        Bottom line – EVs will be getting out service much faster than gasoline vehicles and most likely will start losing their resale value fast as well. And what you will get is that despite explosive growth in EVs, the relative share of gasoline vehicles on the road will probably even grow as EVs are retired earlier and in much bigger numbers.

    • Jay says:

      They all better innovate like hell to get the cost per KW down below $100 like Tesla is on the verge of doing. Otherwise, nobody is going to be able to build a sub $20K.

      And, some one better figure out how to get level 2 charging units into houses. If your electrical panel is not in a desirable spot like in your garage, it could cost thousands of dollars to add a charger. Oh, and what about all those people that live in apartments? Does anyone think apartment owners can afford to put dozens if not hundreds of chargers on their properties?

      Solid state batteries sound great. But does anyone really think 1st gen units are going to be better than what Tesla has in a couple of years? And be cost competitive?

      There are several major obstacles that have to be overcome for electric cars sales not to hit a brick wall in about 10 years.

      • LK says:

        People are used to buying the charger separately at this point.

      • JakSiemasz says:

        If your electrical panel is not in a desirable spot like in your garage, it could cost thousands of dollars to add a charger….extension cord.

        Does anyone think apartment owners can afford to put dozens if not hundreds of chargers on their properties?….they’re doing exactly that.

    • GWH says:

      I live in Michigan and nobody that I know, is asking or even looking for an electric car. Certainly, nobody that I know wants to be forced to buy an electric vehicle.

      • james wordsworth says:

        Live across the border in Ontario and the number of Teslas keeps increasing. Every time I drive I see more.

        I’d buy one, but still a bit pricey. In another 3 years should be a steal. People will not want an ICER car – no forcing involved. Performance and price will trump all.

  2. 2banana says:

    One hell of a business model.

    One hell of an industry.

    “Startups don’t have to make money. They can burn cash for years, and get more cash from investors, and they can undercut the legacy automakers and sell below cost because they’re expected to do so.”

    • qt says:

      Now a day, any startup or SPAC just slap the word ‘Tech’ in their name or marketing material and they get billions from “investors”… it’s a great business model for the founders and early venture capitalists. Then they can dump it after the IPO and walk away with billions. I wish can we start something too. Some examples include NIKOLA, CLOV, etc.

      • Saylor says:

        Hauntingly….in the late 1990’s it was ‘.com’ Same song, different title.

    • A says:

      At this point I think “modern capitalism” is just about trying to get as big as possible, even while losing money, so you can negotiate the fattest possible bailout when the next recession comes and the FED starts handing out unlimited money.

      Basically a game of who can hold the economy hostage the most to negotiate the biggest payout from the government.

  3. 2banana says:

    Magic 8 Ball sezs….STAY AWAY!

    “I’m not sure how the investors will fare. But they get to do their own math.”

    • Wolf Richter says:

      For utility investors, there might be something there, no?

      • 2banana says:

        Agree on utilities.

        But the auto industry looks a lot like the pre-covid Airline industry right now.

        Invest billions in order to go bankrupt in a hyper-competitive industry.

        • wkevinw says:

          It seems like all/many of the older industries/corporations have some dysfunction because of the “tech model”, where, as is mentioned above, profits are not needed. For traditional firms, a profit is necessary.

          Based on how the US car companies responded to the import small car market over the past 5 decades, I don’t have much confidence in how they could make a profit at EVs.

          I wonder how long Tesla has in the current “business model”. I thought they would have been acquired by one of the larger companies by now.

          Part of the problem with the “tech business model” is that it can last for much too long. To see how a (clearly illegal) unprofitable firm can almost destroy a whole industry given long enough, see Worldcom. They almost destroyed the legacy phone companies.

        • Ralph Hiesey says:

          2banana

          “Invest billions in order to go bankrupt in a hyper-competitive industry.”

          Not the first time. Railroads did that in the 1850’s . Except maybe then only many millions. Both Pounds and Dollars.

          Good for stimulating the economy, higher employment, and making the rich less rich.

      • Jeremy says:

        Yup, and you can collect a nice dividend while you’re waiting too.

      • Wisdom Seeker says:

        Trouble for utility investors is that the sources they’re “allowed” to “invest” in are mainly wind and solar, and those are much weaker at night. The days of multi-gigawatts of nuclear and coal and hydro baseload power going idle overnight are fading. The new grid is going to be much more challenging.

        Also quite interesting to see GM saying only half their manufacturing will be EVs by 2030, given that the FedGov is trying to mandate much more than that, and Cali already has a mandate for all new vehicles by 2030.

        I foresee a lot of growing pains.

        But there is one way for auto manufacturers to absolutely crush it on volume – if all the new-tech autos are (ahem) “unexpectedly” unreliable in various ways, then they won’t last 20 years anymore and folks will need to replace them more often. How long will those battery packs last … and will these EVs be like those mobile phones where it takes heroic measures to swap out the battery?

        • Thomas Roberts says:

          Even with gas cars, the car makers are making everything proprietary. There is far less parts in an electric car. There is no way in a car to simply have an excuse to block battery replacements. There are efforts to greatly extend the life of a battery. It’s definitely possible they could end up lasting decades. The longevity issue is smaller than a cheap high capacity issue.

          There is definitely a movement towards making cars too expensive to fix by around year 10 by means of proprietary parts, but it will be worse in gas cars. If you do keep fixing it, the automakers will still do well anyways, because you’ll be buying from them the overpriced oem proprietary parts.

          All this assumes that everyone let’s the big car makers get away with it. Electric cars are far more reliable and easy to fix. The parts on an electric car are inherently more standardized than a gas car. Tesla in many ways confused car buyers, with how complicated, they specifically are to fix.

        • char says:

          GM is lying. Half will be battery, other half will be electric cars with a gasoline generator to power it. Electric car with a generator is just so much cheaper to build/design in 2025 than a classic ICE/transmission and you don’t have to worry that the supplier stops making the needed parts.

        • El Katz says:

          Proprietary parts have been around forever. Most of those are made by OEM suppliers. Some manufacturers will have you believe that there’s some magic juju associated with their brand being embossed or stamped on a part… but smart people know that you can get VW replacement parts for your Porsche or Audi for far less $ and many have the same part number – just a different logo. In addition, the luxury brands have (at least at this point) people who want to preserve them. That’s why MB Classic exists. BMW has a similar enterprise.

          “Electric car with a generator is just so much cheaper to build/design in 2025 than a classic ICE/transmission and you don’t have to worry that the supplier stops making the needed parts.”

          Apparently, you’ve never bought a generator or an electronically controlled appliance. Circuit boards go out of production. Odds are, each manufacturer will have some IP specific to their product that would make them not universal.

          From what I have read (and heard from peeps still in the automobile business), the differentiator will be the software for the features (navigation, etc.,), interior design and comfort, and exterior appeal. The rest of the vehicle (motors and batteries) is been nicknamed a “skateboard” and that one platform can be tossed underneath a variety of vehicle styles with changes to the subframes (the part that holds the motors and wheels) to make them longer, shorter, wider… to suit the desired configuration.

          Lots of panel bond (glue) to hold them together.

          Other issues are battery cooling (Tesla, for example, has a radiator, which has a pipe running below the car that can be sheared off if you should have the misfortune of hitting some road debris). Cost? New battery pack (@$28K). Tesla replacement parts are like hens teeth (that’s why the insurance on them is so high… high incidence of total losses because of parts availability – control arms and other suspension parts. Tesla, as a company, does not treat rebuilders very kindly – very often cutting off access to superchargers for rebuilt vehicles. This contributed somewhat to the push for right to repair. In Tesla’s opinion, they own the car – not you – and they will determine if you have access to the services you paid for.

        • Auldyin says:

          @WS
          ” How long will those battery packs last?”
          Data is well hidden but the Leaf guy said in conversation about 7yrs in the car to drop to 70% power then moved on to bulk off-peak storage for a few more years until it is un-economic. Then comes the Devil’s job of how do you re-cycle? At that point the Double Glazing salesmen come in and tell you, easy we’ll be able to do it that far in the future.
          Do you know any engineer’s saying batteries are a good technology for anything other than portable electronics and kids toys?

        • Wolf Richter says:

          Cellphone and laptop batteries have been recycled for years. EV batteries are already being recycled. But there just isn’t a lot of EV volume yet to build a big industry. Recycling and reusing in the auto industry dates back to the beginning of the auto industry. It’s a big industry. Outside of plastics, there isn’t all that much on a car that isn’t reused or recycled. There is a lot of money in it.

        • Thomas Roberts says:

          There is a difference between the old proprietary parts and the new ones on cars. The new ones can, if allowed to, specifically lock out non oem/certified parts. IP lock them as you called it. They could EASILY IP lock the ICE engine and various parts connected to it. And no if they are allowed to get away with it, you can’t just find an easy way around it. They could easily prevent you from starting your ICE car if it doesn’t detect the entire powertrain is GM/Ford/BMW certified. More and more engine components have integrated computers/circuit boards and all of them can be IP locked. It is the same for gas or electric cars.

          Electric cars have far fewer parts and the parts are more isolated (with ICE cars, the entire powertrain has to be very precisely in sync). It would be far easier for companies to develop spare parts for EV that would work across a range of models perfectly.

          Tesla is very Proprietary and yes does a lot of this nonsense. There is absolutely no reason to assume that gas cars will stay magically easy to repair with third party components, while EV’S do the opposite. EV’s are inherently more reliable and easy to repair.

        • 91B20 1stCav (AUS) says:

          Back when i was in the aftermarket auto parts biz in the mid-80’s (way before the current EV situation), the concern was that OE’s were working to get around the Sherman Act and gut the pattern part/non-dealer repair industry by shortening their vehicle platform lives to about 18 months-replica parts tooling becoming uneconomic at that wavelength, used parts becoming hen’s teeth, special tools for shop procedures multiplying and becoming a significant maintenance costs-all thereby driving new sales (thus eliminating much of the aftermarket competition and an illuminating industry-presaging of the ‘stimulus’ intent of cash-for-clunkers).

          Didn’t totally happen, but aspects of it have. Appears EV’s have less to fear of a renewed effort of this type vs. ICE vehicles (other than body bits…).

          may we all find a better day.

      • Hannibal says:

        I might have missed it, but EVs have another advantage for utility companies. Modern charging stations work in both directions. Utility companies can store energy in vehicles and recall it on demand.
        Storage of energy is a big one for the utility companies.

        • Richard Greene says:

          Sounds like the most expensive batteries one could buy,

        • Richard Greene says:

          Concerning the charging batteries at night:

          The simultaneous mandated trends of increasing solar and wind energy capacity, while reducing fossil fuel sources of power, affect this assumption:

          Solar power at night = zero

          Wind power at night = highly variable and unpredictable, sometimes near zero

        • Wolf Richter says:

          Richard Greene,

          But there is very little demand on the grid at night, hahahahaha… IDLE CAPACITY is what you’re using if you charge at night. Grids are built for peak times (afternoon in the summer in most regions in the US). The rest of the time, there is lots of idle capacity. How often do I have to repeat this?

        • Wisdom Seeker says:

          @Wolf: Our point is that as the mix of energy sources continues to shift, the “idle capacity” dwindles.

          Coal is down.
          Nuclear is flat to down.
          Hydro is flat to down.

          We know what’s being built – we should be able to project what will be providing the baseload “overnight idle capacity”, 5-10 years from now.

          I don’t think idle capacity will be a big problem with the generating infrastructure that will be there in 10 years.

          Note that for coal and NatGas, the fuel cost is big and the equipment isn’t so expensive by comparison.

          NatGas plants in particular were often built specifically for “peaking power”; there isn’t that much to be lost in idling the turbines part of the time since that’s what they’re designed for.

      • CJH says:

        Most utilities are regulated. So it’s is not ‘whatever the market will bear.” The next public asset to be financialized ? Only if state regulators are totally corrupt. Chances they are probably north of 50%.

  4. 42 says:

    They are still burning coal to power them, but they are quiet, something that the past two hundred years don’t know about, tinnitus and the ruckus.

    • Wolf Richter says:

      42,

      Not sure where you live. But they’re not burning coal in California; there are no more coal power plants in CA. Texas is the largest wind power producer in the US! Overall in the US, coal is down to less than 20% of the total power production by source:

      • 2banana says:

        True.

        But California buys a significant portion of its electricity from other states.

        • Wolf Richter says:

          Yes, mostly hydro from the Pacific Northwest which is part of a long-term arrangement. And it buys some juice from neighboring states. Of that small-ish amount, about 20% is from coal. So in total, in the low single digits.

        • FinePrintGuy says:

          You’re on to something, Wolf. Right now, CA has to import excess from other states. How much MORE will they need to import when EVs hit 10, 20, 60, 100% of all cars on the road… and what will be the marginal supply source on that? CA only builds solar…which only works at night. Big dreams of massive battery plants seeded around the state to capture daytime production so that the cars can be charged at night…lordy what a complicated system…what could go wrong when engineers and scientists are overruled by politicians in Sacramento?

        • Wolf Richter says:

          FinePrintGuy,

          Good lordy! READ THE ARTICLE, particularly the part about idle capacity.

          With wind and solar, the fuel is free. You only have the capital costs (same as with other power plants, except the fuel isn’t free for them). So you run wind and solar when there is wind and sun because they’re free. The rest of the time, you run hydro, natural gas plants, etc. Wind blows whenever it blows, including at night. The sun produces the most power during the middle of the when you need the most power (peaking periods). At night, there is huge IDLE CAPACITY because there is very little demand. And that’s when most people charge their EV. I explained this in the article!!!

        • Tom says:

          Thermal efficiency of state-of-the-art coal powered plants can reach >45%. THis is way above the 33% average of todays operative plants, so there is much to gain from upgrading.

        • Wolf Richter says:

          If you upgrade to a combined cycle natural gas plant, you get 65% thermal efficiency. And that plant is much more flexible. Unless coal is a lot cheaper than natural gas, only a moron would build a coal power plant in the US these days. They just don’t make economic sense in the US where we have cheap natural gas.

      • 42 says:

        Thanks for the graph and i wish i lived in West Virginia. Modern Coal Plants emit water vapor and carbon, plants and trees like that. Just saying, not provoking. Please go easy on me, you’ve got a great site going on here.

        • Wisdom Seeker says:

          Coal fly ash also contains radioactive and toxic trace elements… burn enough rock and you get a significant amount of ash.

          On a kilowatt-hour basis coal creates more radioactive pollution than nuclear, actually. But coal’s pollution is widely distributed so it’s not as scary as the every-couple-decades nuclear disasters.

          If the nuclear folks could just “close the fuel cycle” and avoid the spent fuel buildup problem, that would really help…

        • Wolf Richter says:

          42,

          I think you can still move to West Virginia. Pretty sure they have a slot for you :-]

          Coal plants also emit lots of other materials for free that are expensive to purchase, such as mercury. And they only convert about 35% of the coal’s energy content to electricity compared to a combined cycle natural gas power plant which converts about 65% (thermal efficiency), which makes coal more costly for power plant operators. What’s not to like?

        • 2banana says:

          The positives about coal.

          America has a massive abundance of this fuel.

          You can mine it, transport it and store a winter’s worth of it. Right next to the power plant where you will need it and right in the open. With no special safety issues and no risk of an explosion.

          And you can make electricity 24/7 even in -50 F weather, at night, without any wind and with all the rivers frozen.

          When you need electricity the most.

        • MCH says:

          Reduction of coal use is a good idea over all for a simple reason beyond emissions. Conservation. While it is abundant, like oil, it is a finite resource. The fact that it’s cheap actually makes it more easy to waste.

          Right now, like everything else, coal in this country is a stick of political dynamite. Hopefully the religious fervor around it will die down enough for there to be more research done on proper utilization.

        • Thomas Roberts says:

          Current coal plants in America are alot cleaner than ice engines and are easier to upgrade over time. Even if all EV’s were powered directly from coal plants without using excess night capacity or anything like that, it would still be a large net gain.

          The big automakers have always kicked up dirt and produced BS reports to make the claim that ICE cars are cleaner than EV’S.

          In the past, GM even went as far as paying for a BS report where they claimed a Toyota Prius hybrid was worse for the environment than a H2 Hummer.

      • MCH says:

        China… he is probably from China

        • robert says:

          China’s building 2 coal fired plants a week the last report claimed.
          Also, coal demand is strong so they lifted the embargo on Australian coal.

        • MCH says:

          See my point is made…. In China, they look at the practical short term impact… winter = people needing heat and electricity. If that means coal burning plants, so be it.

          In this way, the US is both forward thinking and ass backwards. Wrings hands about CO2 emissions with coal, which isn’t wrong, and then decides to virtue signal about how green things are by trying to elevate solar and wind when capacity to build isn’t quiet sufficient to make it practical.

          And by the way, does any one realize price of silicon is going up rapidly? You know what that means… the sand used to make solar panels are going to cost more and LOL, who makes a majority of solar panels that the US has to buy to achieve its green dreams. hint: it starts with a C.

          So we continue this virtuous cycle of printing money and breaking the backs of future generations to get panels whose life times are… (remind me what they are again?) and all the while boosting the trade deficit and enriching not the US.

          A full display of our leadership not even considering any of the secondary effects of their policies much less any impacts to the rest of the economy.

  5. 2banana says:

    Well, maybe not in California.

    “Electric utilities are ecstatic about EVs. Selling electricity is their business.”

    • Wolf Richter says:

      2banana,

      They’re particularly ecstatic in California. Particularly PG&E. Investors love growth, and there has been no growth in demand, but decline. So this is hope for higher demand, more revenues, and profits.

      Investment flocks to growth. That’s the business model of a utility.

      What makes you people think that utilities want to operate without growth? They’re like any other business. And when there is no growth, it gets touch to raise money and invest and do anything at all.

      • Richard Greene says:

        PG&E stock price down 82% in the past five years.
        No signs of a new bull market in PG&E stock.
        You appear a lot more optimistic about PG&E than PG&E investors, as a group, are.

        • Wolf Richter says:

          Richard Greene,

          1. PG&E filed for bankruptcy because of the liabilities associated with the horrible wildfires its equipment and lack of maintenance caused. That’s one reason why the stock is down. Duh.

          2. Did you look at my chart of electricity demand in California? Go look at it. No growth, but decline, still waiting for the EV demand to show up.

          This company has operated in a dangerous environment with declining demand. Horrible scenario. No utility wants EVs more than PG&E. They would finally provide some growth. But it will take years. No hurry. EVs just don’t use that much electricity despite all the garbage people try to post here on this issue.

  6. Cobalt Programmer says:

    Technology promised us flying cars and all we got was 140 characters. I hope we can see electric cars and much more in the next fifty years. My ideas are

    1. Automated driving. Just as in Total recall movie, just get in the johnny cabs and say your destination and start watching TV or sleep or have fun
    2. Connect the car to solar power and recharge whenever wherever possible. Also alternate to the plug in recharge
    3. No arrogant drivers who cut in, drive on the shoulders, DUI, and donuts on the freeways. Smoother ride and…cars will yield to pedestrians
    4. Less air pollution due to batteries and green technologies.
    5. No Parking troubles. The car drops me in the office and goes back to a paring spot, cheaper one or just drive around. Parking troubles will be gone
    6. Housing bubble. Build a self driving RV. Sleep while driving or even fly around and sleep safe no need for any homes also. I can comment on the wolfstreet blog while car is driving.
    What are your expectations for the car industry? No anti-technology people.

    • 2banana says:

      Before or after the electrical grid breaks down?

      Texas couldn’t keep the lights on during a cold spell and California shuts down power if there are high winds. Europe is going to freeze in the dark this winter if nothing changes.

      Now imagine doubling or tripling electricity demand with your vision above.

      The future is awesome with cheap, abundant and reliable energy.

      We are no where close to that.

      “What are your expectations for the car industry? No anti-technology people.”

      • Thomas Roberts says:

        The gas pumps didn’t work during the power outage either.

        Switching everything to EV would require alot less than double the electricity.

        You can also charge an EV with your own solar panels or small windmills as well. Small windmills are very cheap and while you can’t get a full charge every night off a sub $1,000 system, it greatly beats your gas needle going towards E with no options.

        • Thomas Roberts says:

          Everyone living in an RV seems like a bad idea. You can’t build a community or country around that.

        • MiTurn says:

          Thomas Roberts:

          “Everyone living in an RV seems like a bad idea. You can’t build a community or country around that.”

          I think that RVs are becoming the new single-wide mobile home, as they are filling up mobile home parks (puns everywhere, none intended). They’re the real ‘mini home’ and most of them are simply parked and lived in as affordable housing. Fifth wheel trailers too.

        • Thomas Roberts says:

          If they stay in one spot most of the year, you could build a community around that. Though at that point, some other type of housing would probably make more sense.

      • David Hall says:

        They have to use electric resistance heat at night during the northern winter, where there are no natural gas pipelines. That overloaded some electric systems on cold nights. This popped line fuses causing outages. Windstorms downed power lines. Ice storms downed lines. Hurricanes knocked out power for weeks. Many homes do not have garages. Am not sure my circuit breakers have enough amps or the right size copper wires to quick charge a car. They tried using cheaper aluminum wires in homes, but these overheated caused fires.

        • Wolf Richter says:

          David Hall,

          “Am not sure my circuit breakers have enough amps or the right size copper wires to quick charge a car.”

          If your daily commute = 40 miles, then all you need to charge at night is to top off the battery. You don’t recharge the entire battery every night. That’s just nonsense. To top off the battery overnight, a 110V or 220V charger would do just fine. If you have an electric stove, it’s likely a 220V.

        • Anthony A. says:

          I heated my home in the far north with fuel oil stored in a 550 gallon tank, not electricity. Most homes are heated this way where there is no natural gas pipelines or propane delivery. Aluminum wiring is a thing of the past

        • David Hall says:

          Many years ago I drove from Massachusetts to Florida for spring break.

          Might need a plug in hybrid.

    • VintageVNvet says:

      Gravity Mirror powered flitters, personal and group size and of permanent construction, that FLY up with the mirror power, then GLIDE horizontally and down to the destination as controlled/directed by simple air jets…
      Surface only for walking, bicycle, horsey, etc.
      It’s the only rational long term answer, and actually coming sooner than most expect due to the work of the ”young turks” theoretical physics folks currently extending the good but preliminary work of good old Albert E.
      All the rest of the potential solutions are temporary and continue to utilize/consume non renewable resources.

    • Auldyin says:

      @CP
      I fancy magnetically locking to the line of cars in front and shooting through the suburbs at 100mph until I switch off and drop out for my destination, sort of like a self assembling HST. Scary!

  7. J-Pow!!! says:

    Once I am reappointed to my position as Fed Chair, I promise a free EV for every taxpayer in the the United States of America! And when I say something I mean it! Hahahahahahahahaha!!!!!!

    • Wolf Richter says:

      Mr. Chair Sir, you made a typo: “I promise a free EV for every taxpayer” should read, “I print a free EV for every taxpayer.”

      • MonkeyBusiness says:

        You are both wrong. The Fed will print a free EV for everyone in the United States. Taxpayers only? That’s discriminatory behavior. Heck it might be r**ist. We leave no one behind.

      • MCH says:

        I like it, people who pays taxes, as in money to treasury should get the Tesla, not the guys who effectively pay zero.

      • Xavier Caveat says:

        I sing the body electric, by Fisher?

  8. roddy6667 says:

    I was considering investing in small water company stocks, as they are constantly being bought up by the big guys. In CT I had a company called Bridgeport Hydraulics supplying my small town, but they got bought up by Eversource (ES). If and when EV’s take off, it should be a boon to the electric utilities. In this case, since they supply both water and electricity, it should be a good choice. Hard to live without either one.

  9. 42 says:

    Fertilizer, in Modernity, is mostly derived from Natural Gas, The Haber Bosch Process.

  10. jeff harbaugh says:

    Meanwhile, the EVs have vastly fewer moving parts- less service and maintenance required. What happens to all the repair facilities?

    • Keith says:

      I would say big disruptions between that and the lack of parts needed from OEMs. Lots of layoffs. That being said, I think the transition and adoption will be slow. I doubt people will be willingly turning in the ICE vehicle for an EV and modern ICE vehicles are well made and will last a long time. That being said, govt edicts could be a wildcard.

    • Jon says:

      I have been driving cheap ev for last 5 years and never have to go to repair shop even for regular maintenance
      There is absolutely no maintenance or repair in ev per my expense of last 5 years
      I drove 50k miles so far

      Love ev
      Love tesla.
      Don’t believe in tesla stock though

      • David Hall says:

        My 2015 Chevy is six years old. I had to change the oil every nine months and the battery once. The tires for EV and ICE are similar. An EV like a golf cart requires expensive battery replacements.

        25% of the nation’s energy use is consumed by transportation. Can the electric grid handle it? Autonomous features are a good idea, but there are not enough chips. Someone did not have the foresight to add more fabs. You may need to start building electric generating facilities. Robotaxis in urban areas seems good for people wanting to avoid the high price of a parking space in Boston, but where do you charge them?

        10% of US electricity is wind and solar. Not many new hydroelectric dam projects in the US are there? Vermont closed down a nuclear reactor before its planned decommission date. Asia is building new reactors.

        • Cem says:

          If everyone drove an ev tomorrow? No. But is that going to happen?

          This site is abundant with some of the absolute weakest arguments I’ve ever read hahahaha

        • Wolf Richter says:

          David Hall,

          “10% of US electricity is wind and solar.”

          12% in 2020 and rising.

        • Massbytes says:

          And an ICE vehicle requires expensive engine/transmission replacements. EVs have a better total cost of ownership over the life of the vehicle. Battery replacements included.

  11. gametv says:

    Wolf, Two Chinese companies are already moving ahead of Tesla in China. Xpeng is launching a sedan in the mid-20K range and has an SUV that is being re-launched at those price points and BYD has a whole bunch of models that are either BEV or PHEV. Those two companies, and a few others have already stopped growth in Tesla sales in the Chinese market and are going to invade Europe within a year. The Chinese companies are the only ones that have similar efficiency (range/kWh battery size) to Tesla. Xpeng also has very high tech software operating system and moving fast in the driver-assist area.

    The notion that GM will double revenues is pretty far-fetched. I see it likely that they lose alot of sales in China and then Europe. GM is entering the BEV market late and it is highly unlikely they will be able to charge premium price points once all the competition arrives.

    It is my guess that the BEV segment of the market will become the lowest gross profit segment of the industry within the coming 5 years, as tons of production capacity chases after that market. Ford and GM are not on the forefront of this transition, at best, they are in the middle of the pack, ahead of the Japanese companies, but behind Tesla and the new Chinese companies.

    China will heavily subsidize their companies with low cost capital and the US makers will probably suffer the same fate as the big US steel makers.

    • 2banana says:

      Just a FYI.

      Evergrande has its own EV division and was involved in over a dozen Chinese EV startups.

      So your mileage may vary.

    • Thomas Roberts says:

      gametv,

      In China they give out lots of subsidies to certain industries, this is regardless of whether those companies ever actually produce anything. Evergrande had the highest value EV business in China, it never sold a single car. There are countless EV companies in China that have never sold an EV. Cars in China can’t be registered/used past the 8 year mark, because of ridiculous rules and taxes/fees.

      Chinese labor while cheaper than American or European labor, is much more expensive because of CCP nonsense, than Indian or Bangladeshi labor. American and European car makers, would rather put factories in India or Bangladesh than go out of business. America and Europe aren’t going to just let China take over their car markets though. America and Europe (the EU) force the vast majority of cars sold in their countries to be produced in their countries/the EU.

      It’s not a real threat anyways. Chinese cars are junk and you are lucky if they make it to the 8 year mark. This is partly why so many cars are sold in China. Also you can never trust any CCP numbers. The reason Tesla is falling in China, is because the CCP went after them. The only significant car market the CCP will ever dominate is China, because everyone else will be banned.

      If these Chinese cars are so good, how come nobody outside China ever buys them and shows them off? I’ve never seen a Chinese car in a developed country. The only thing close is when a YouTube channel bought a Chinese $1,500? EV to see how it was possible to be so cheap. The EVs’ frame was not safe, but constructed better than they would have thought. But, the car couldn’t go up a hill, not powerful enough. Alot of the EV’S actually sold in China, are tin cans with a tiny bike motor and a small battery.

      • Sams says:

        Japanese cars was “junk” too. Quite a few of them actually started as licensed copies of English cars and the quality as British built was not great either. That have changed.

        If you have never seen a Chinese made car on the road in a developed country, you have not travelled far. Or missed them as they look pretty much like any other car. I have seen several Polestar, MG and other Chinese BEV on the road.

        There is not more complaining about them than other EV’s. VW was one of the manufacturers that got most flak due to unfinished software in best mickey soft beta style.

        A more general observation, it looks like the USA get more Chinese made junk than Europe. Chinese made goods are not always as cheap in Europe as in USA, but quality seem to be better.

        • char says:

          Consumer protection is tougher in the EU so it doesn’t make economic sense to sell real junk.

        • Nick Kelly says:

          Japan quickly overcame that slander. After the first econoboxes arrived they quickly proved they were pretty good. This applied to all Japanese stuff. China has had 30 years now and still has a well deserved rep for attempting to fool the consumer. BTW; Xi has personally rapped a few industries for this, e.g. fans.

          The Japan / China comparison won’t fly.
          Taiwan is a different story.

        • Auldyin says:

          @S
          “copies of English cars and the quality as British built was not great either.”
          An early ‘Jaguar’ is an engineering ‘work of art’ like most UK engineering. Mallard, Flying Scotsman, Hawker Hunter, Comet, Concorde, need I go on?
          Uk engineers are ‘artists’ not marketing functionaries.
          Just sayin’

        • VintageVNvet says:

          Actually for A:
          As former owner/operator of 1956 Triumph TR-3, and well acquainted with Jags, Hillman, Opel, I am pleased to tell you the ones that came to USA,,, ALL of Them, were actually far worse than similar priced made in USA, well before any Asian copies, etc…
          Austin Healy, early MGs, maybe even the Arnoldt-Bristol we used to race in SCCA class D or E, OTOH were delightful, and always fun to try to figure out what was wrong – usually a filter or similar…
          OK, the D-Jags did do well at Sebring, but never quite actually managed to finish, eh old chap??

        • Auldyin says:

          @VV
          Touche old boy!
          Our engineers designed them unfortunately they didn’t build them, that was the Unions.
          I forgot to throw in the Queen Mary and the QE2 and yes, they broke down too. Mallard threw a main con-rod bearing on it’s world record run because a cork came unscrewed!
          Glad you tried ‘British’, I graduated to Nissan zeds, traitor.

      • Wolf Richter says:

        Thomas Roberts,

        “If these Chinese cars are so good, how come nobody outside China ever buys them and shows them off?”

        China exports lots of cars to all kinds of countries, including to the US. You see China-made Volvo XC60s and Buick Envisions all over the place in the US.

        And in case you’re wondering, yes, Volvo is now a Chinese company.

        • Nick Kelly says:

          No doubt Chinese Volvo good.

          Ford was first with assembly line with interchangeable parts and close to zero variation between units. Then Ford first to move plants to other countries with zero variation between plants.
          I’m sure after spending billions Mr. Geely was sure at first to make sure here was zero variation from plant in Sweden where the XC is also built.

          I think this is an exception to typical indigenous Mainland consumer goods, which can usually only compete on price.
          Before the Mainland dumped Maoism, Taiwan was the ‘go to’ place for offshoring. But the manufacturer had to go there and be sure of everything.

          If you were to ‘handicap’ the China / Japan race in manufacturing you would need to consider that 1. Japan was already industrialized pre-war and 2. Japan was not held back for 30 years by the Mao CCP. If you are starving you aren’t innovating. Based on that, China doing not bad.

        • Thomas Roberts says:

          Wolf,

          There is a big difference between foreign automakers producing cars in China for export and actual Chinese brands.

          Almost everyone with money in China, drives the joint venture cars. Most Chinese brands actually can’t be registered in the better cities (first tier cities, sometimes second tier cities) in China.

        • Thomas Roberts says:

          Volvo is still functionally a Swedish company.

        • Auldyin says:

          @NK
          The Scottish engineer, the great Dugald Drummond was first with replaceable parts. Prior to him, locomotives were individually built by hand craftsmen and when they broke down (often) a new part had to be hand made and fitted. (hence the term fitter)
          Drummond built to closer tolerances which meant that universal spare parts could be stored to allow instant repair. He was a railway ‘rock star’ in his time for the reliability his engines brought to early railways

      • gametv says:

        Thomas – you are looking backwards, not forwards. BYD is a huge player in many markets, including commercial vehicles and it has its own battery tech that is allowing it to create products at price points that Tesla cant yet touch.

        Xpeng is heavily investing in manufacturing technology and software and has better software than ANY of the ICE car companies already. How can a company that has been around such a short time have better software, better efficiency (range/battery size) than the ICE car companies? Answer: The legacy car companies are terrible at developing things in-house. They have become assemblers of technology that was developed by tier 1 suppliers. And so they move very slowly/incompetently at new technology development.

        The Korean cars were trash when they entered the NA market and now they are better than the domestic car makers. Ford, GM are going to get their lunch eaten. I dont want American companies to fail, but the true legacy of Detroit auto companies is incompetence and failure to take appropriate risks. An in-bred culture that had a chance to pioneer the BEV years ago, but killed its own inventions to goose short-term profits.

        Ford has a plan to manufacture 80K F-150 Lightning trucks in 2024. That is a drop in the bucket. They are only selling those vehicles for the PR angle of it. They could sell 500K or a million per year, but it is less profitable than selling an F-150 gas car, so they choose to cede market share to competitors instead of taking a profit hit. Short term, myopic thinking.

        Transition to BEV cars has given China an opportunity to establish market share and brand before the legacy car makers have the market all locked up. They wont fail to grab a large share of many markets, including NA.

        • Thomas Roberts says:

          As far as Korean vs American cars go, they are both in the high tier, the Korean cars aren’t better. It largely comes down to preference.

          As far as Xpeng goes, I looked them up, they definitely are stealing IP from Apple and Tesla. As far as their software goes, it appears that the console/entertainment computer is based on Android (I can’t find much on the brand), the bigger car makers use android as well on some of their console/entertainment computers, the bigger automakers for safety, reliability, and security reasons have to have these computers more locked down and out of date (they are safety tested for upto several years before car releases). For safety reasons they disable most animations, which causes them to look dated. This is a safe and deliberate choice. Xpeng like Tesla is playing it risky. We will just have to see how great their software really is.

          The self driving tech appears to been stolen, so we will have to see just how good it really does. Until average people get them and try it for themselves, anywhere they choose; no automaker anywhere gets the benefit of the doubt, as far as their self driving claims goes.

          It is possible that if building an electric car that a Chinese automaker could make an okay one, but the CCP always causes trouble.

          Even if we were to assume that a Chinese company under the rule of the CCP could develop and sell fully high tier cars, I simply don’t see the EU and America letting them take over. I don’t see that being realistic though, anyways. A much bigger concern is that the CCP is threatening war on the whole world; and I don’t see how it possibly could make sense to allow Chinese self driving cars into the rest of the world. That would be pretty insane. It might happen briefly, but I don’t expect that to be the norm for long.

      • Auldyin says:

        @TR
        The chinese saved Volvo and MG pity they didn’t save Saab.

  12. Gary Yary says:

    When the “Tucker” came to market. Did Tucker envision and embrace a new currency? Did he decide as a side gig to launch stuff into space?

    Was his financial means offering ever more public shares to consumers while building giga factories on all the continents?

    He failed even with a great product. He along with many others failed. The successors even failed.

    Tesla is an inspirational story.

    The major competitors who have supply chains, and loyal followers are playing catch up – lmao!

    Tesla will merge via distressed purchase into one of the competitors is my forecast. Or they go bankrupt.

    The problem with demand for fuels is the problem of to many humans. Businesses will cater to make money. Magic carpet rides, water beds…the human termite mound needs a wicked step mother to control things.

    Or perhaps a basic fundamental education in logic and self control.

    Peace

  13. R2D2 says:

    You forgot Apple i-Car…

    Apple will arrive in 2025. Outsource it for $25k. Sell for $100k. Make a 20% net profit margin. Suck out 80% of all worldwide vehicle industry profit. Like a giant straw in a tiny bowl of soup. Tesla left with no profit. Stock price collapses under $50. German premium car industry halves in size in a decade…

    Apple i-Car for the win…

    • Nathan Dumbrowski says:

      Without a doubt. That has got to be on their roadmap. Apple for the win. I would go out on a limb and say Apple Air would be the next logical dot in their cap after they conquer the car

      • char says:

        Apple is great at selling to consumers but truly bad at selling to business. So selling aircrafts is IMHO unlikely to be successful.

    • Nick Kelly says:

      A has been talking this for over 6 years since 2014. Lead guy recently left.
      A has approached BMW (no go) and now Hyundai to actually build car while A adds self- driving software. Latest buzz date is 2027 (Apple Insider)

      We’ll see. My guess is we won’t. Cos building car won’t like Apple’s expectation % of typical slice it gets for i- phone.

  14. Brady Boyd says:

    Does anyone ever ask how EVs are powered?!?! Answer: coal, natural gas, nuclear, oil….. oh yeah, a little with wind power and solar LOL!!!! Toyota sent a warning flare that how’s this great US power grid going to do when everyone switches to EV. Answer: not good. Better buy a generator for all these future brownouts.

  15. Bruski says:

    Federal EV tax credit $7,000 to $10,000.

    AND, to federal and state gas taxes. The smart money wins again.

    B

    • gametv says:

      Giving incentives for people to buy BEV cars is stupid. A BEV sold in Kentucky is barely less polluting than an ICE car due to the electricity generation. A real environmental policy would focus on shifting electricity production to renewable. Consumer demand for BEV cars will be fine, once there are more models to choose from, with lower prices and longer range.

      This is pandering to auto companies that quite frankly, dont deserve a dime of our money since they failed to pursue BEV cars until Tesla forced them to.

      • Auldyin says:

        @g
        W says no growth in overall numbers so that means all those new plant and alteration costs and dealer refurb costs and demolitioin costs, etc, etc are going to have to be covered by the same number of vehicles. What does that mean?
        Yup! Very expensive cars unless Ole Joe puts your money where his mouth is, or some Asian importer pulls a rabbit out the hat and saves everybody a fortune.

    • El Katz says:

      The “smart money” won’t be avoiding gas taxes for long. Legislation for a “miles driven” tax pilot program is buried in the $1.2T infrastructure bill.

      Some other states have tinkered with it (I think CA and OR). Presently, it’s a “voluntary” pilot program.

  16. WES says:

    I predict the majority of current and future investors in car companies will wished they had never owned any car company stocks!

  17. coboarts says:

    but, but Amory Lovins explained quite definitively how much less was involved in terms of materials and weight/power requirements manufacturing e-cars, except for the gull wing nonsense that the tesla fools are displaying around town

  18. Bobber says:

    I think the cat is out of the bag regarding electric companies. NextEra Energy trades at a p/e of 80 and a price/sales multiple of about 10x. Pricey!!

  19. Seneca’s Cliff says:

    We may have to accept the idea that except for a few cash cows like overstuffed pickups and posh SUV’s automobile manufacturing may no longer be a profitable activity. It is caught between the vice jaws of declining inflation ravaged incomes and the exploding costs of steel, electronics, plastics, safety gear, and regulations. The cornucopia of cars for everyone may quickly dwindle to a few expensive toys for the rich.

    • VintageVNvet says:

      It WILL/would be a vice to try to use a vise to arrange/release any advice from this group, far shore SC!
      This from one who received constant advice from the wise regarding vices below versus above the waist, especially if the waist appeared to be in some sort of vise, but let’s not waste advice on which vice to advise we should avoid, eh?

    • Juanfo says:

      Or it goes the way of Cuban cars. Old used cars cannibalize each other for decades. Down here it is common to see half century old jeeps, land rovers and land cruisers cruising around as daily drivers and work vehicles. Owners just keep repairing them and pass them along to the next generation.

      • El Katz says:

        Yes…. and you’ll see Cuban cars that are Frankensteined together from everything from marine diesels to lawn mower motors. You can’t do that with modern cars….. everything is run on a CANbus – not a distributor, carburetor, coil, wires, and some spark bolts.

  20. IronForge says:

    Despite the Marketing Hype Over the Engineering, most of the USA don’t have the Grid+Generation Capacity for Mass Adoptions of EVs.

    California obviously aren’t; and they host the Temperate/Arrid/Coastal Desert Regions of SFO_Bay+SV through San Diego – where 90-ish% of USA TSLAs are Sold.

    That being said, this should be a relatively straightforward Transition/Adaptation for Automakers to Make/Mod/Update Vehicles to accommodate Drivetrain Variants.

    Case & Point1: HMC Clarity. Honda get Genius Points for Rolling Out the Clarity with Hydrogen Fuel Cell, Plug-in Hybrid, and Battery-Electric Drivetrain Options. Sales Demand will allow for Mfg different Variants.

    Case & Point2: Ford F-150. Over several years, Ford Rolled Out Gasoline, (Petroleum+Bio) Diesel, Gasoline-Electric Hybrid, CNG, and now Battery-Electric Drivetrain Options.

    Good Luck
    We’re probably going to see Hydrogen Gas ICE(Toyota) and Hydrogen-Based ICE-SynFuel(Courtesy of Porsche) Field Tested for awhile.

    • 42 says:

      Not sure if i’m interpreted this right but invest in $fcel and $plug to see your play descend.

      • IronForge says:

        You didn’t.

        We’re talking about AutoMakers here.

        I’m talking about a Now and Future Trend for AutoMakers to Design several Energy Source Options for Drivetrains in future Model Designs; and Plants that can Modify Production Runs of various Options based on Demand.

    • Wolf Richter says:

      “…most of the USA don’t have the Grid+Generation Capacity for Mass Adoptions of EVs.”

      Good lordy, READ THE ARTICLE, and all the way, before you post!!!!!!!!!!!!!!!

      Why does this nonsense keep getting copied-and-pasted here?

      • IronForge says:

        I did.

        The Branched-Ends of the Electric Grid – the Last Mile to and within (Single Family) Residential Units aren’t “Up to Capacity” Yet. Here in SoCal, Mid-High Scale Condo/Apt Complexes are starting to install Charging Station in their Garages.

        As for California – the we’re still having Rolling Brownouts and Blackouts from Time to Time. Forest Fires and Faulty Grid Layouts. We’ve even had a Battery Complex catch on Fire – knocking out their Capacity – this Year.

        These Issues will continue until States have Grids+Generation to a Level where Brownouts+Blackouts happen due to Heavy Lightning Strikes or Acts of Terror Cells.

        Yes, Billions are being poured into the R&D. Hopefully, more AutoMakers will provide for Drivetrain-Source Options like the ones provided for by the Clarity and F-150.

        Is this a “Zero Sum Game”? Probably not, since Murica is a Mature Market. Energy Drivetrain-Sources are diversifying as Cars themselves continue to Modernize. Europe, OTOH, have Nation-States that have incentivized/mandated the change from conventional Gasoline/Diesel ICEs.

        Kind regards,

        • Auldyin says:

          @I
          Most domestic supllies deliver circa 4hp or a boost charger circa 6hp.
          500hp for 10mins is that 1250mins to charge?
          Just askin’

        • JakSiemasz says:

          You didn’t….sheesh!

  21. Brent says:

    In 2020 United States consumed 123.73 billion gallons of gasoline.

    One gallon of gasoline has the energy of 33.70 kW*h.

    Which is equivalent to 4,169.701 billion kW*h of electricity.

    In 2020 in the US 4,009 billion kW*h of electricity were generated.

    60% of this electricity generation was from fossil fuels—coal, natural gas, petroleum, and other gases.

    In other words – to get rid of gasoline one must DOUBLE the number of power plants in the US.

    And STILL burn oil & gas & coal therein 😁

    Then The Law of Unintended Consequences will start working as usual…

    WHERE OH WHERE IS THE COLD FUSION ???
    I AM WAITING AND WAITING AND WAITING !!!

    • Wolf Richter says:

      Brent,

      Without even looking at your numbers (waste of time), you totally ignore how EVs work, and therefore your conclusion is silly. EVs don’t work like ICE vehicles. They don’t idle. They have regenerative braking. Electric motors are about 90% efficient v. ICE which are between 0% efficient (at idle) and maybe 25% efficient when cruising on the highway. The rest is waste heat. The whole structure of your argument is nonsense.

      • Brent says:

        With all due respect Mr.Richter I borrowed an opinion on the subject of electric cars from Vaclav Smil aka Bill Gates’ favorite writer.

        His article “Electric Cars: Not So Fast !” is in public domain. Moreover,TOTAL amount of pollution generated by EV car (they dont grow on dealer’s lot like mushrooms,BTW) throughout it’s lifetime is 4X compared to ICE car.

        IMHO Mr.Smil’s books deserve to be read more than once.That’s why I order used copies of his books from Amazon.

        • Wolf Richter says:

          I debunked that BS last time you posted it. That author is clueless about EVs and how they function for the reasons I pointed out. Quit posting the same BS over and over again. Just because you included some big numbers doesn’t mean those numbers aren’t total unadulterated BS.

    • David Hall says:

      According to the U.S. Energy Information Administration (2019) total energy produced is consumed by these sectors:

      Transportation 37%
      Industrial 35%
      Residential 16%
      Commercial 12%

      You may need some more electric power plants and power lines.

      • Wolf Richter says:

        It means growth for the industry that hasn’t been growing. That’s why they’re loving it. Utilities are companies too. Wall Street loves growth. Why should utilities remain stuck in a no-growth business?

        • Richard Greene says:

          Utility stocks are up a mere +3.4% so far in 2021.
          Utility stock investors do not appear to be as bullish as you are.

  22. otishertz says:

    When manufacturers start to make mostly EVs they will then be able to claim that most of the demand is for EVs because that’s what most of the current sales will necessarily be. It’s a chicken and egg situation kind of like with SUV demand today. That’s all they make so of course that’s most of the recent sales. I’m not sure if the demand structure of the entire auto market can be extrapolated from recent sales.

    There’s an obvious demand for small economical cars or they wouldn’t be all over the road and apparently holding their value according to what I read here. If there was no demand for these economical cars they would be in the crusher and not changing hands.

    EVs are a great idea but require a miracle in battery technology in order to really compete. Unless that happens or there a campaign to actively kill these small ICE cars that are on the road everywhere, they will be around for a long time and continue to have significant advantages in range, cold weather performance, and longevity of the power source.

    • IronForge says:

      Gross Conceptual Error.

      I mentioned Drivetrain Energy Source Options, didn’t I?

      Why – yes I did.

      BEVs still have a minor share of Vehicle Sales.

      • otishertz says:

        Ironforge,

        Diesel electric has been a good “Drivetrain Energy Source Option” in trains since forever. A lot of what we hear is the next big thing is just fantasy.

        Super-capacitors are very interesting especially on the hybrid Lamborghini. Guaranteed hole shot. They muist be incredibly dangerous however, considering a charged (non-super) capacitor in a common microwave oven can kill you. I guess people are not buying Lambos for the safety features.

        I Don’t understand Your Capitalization Scheme. Why are You Writing Like This? Common Core Grammar Victim?

    • raxadian says:

      The actual problem with EVs is what to do with the used batteries as batteries in general do not get recycled.

      • Wolf Richter says:

        raxadian,

        Nonsense. Reuse and recycling in the auto industry is a big business, and has been for over 100 years. A whole industry has sprung up around reuse and recycling.

        And the EV battery recycling industry is now springing up around EVs. You have to have some volume of old batteries, but 8 years ago, not many EVs were sold, so there are not enough batteries to recycle today to support a big industry. But the pace is picking, as is that industry. Do some Googling and you’ll see.

        • raxadian says:

          You are way too optimistic; see how good smartphone battery recycling is going and remember those are way more portable. Unless laws exist that force all EV companies to deal with the used batteries of EVs is going to be a problem.

        • Wolf Richter says:

          raxadian,

          Just google it, for crying out loud. Smartphone batteries are recycled just fine.

      • Sams says:

        In the USA?
        Check out waste management and recycling in northern Europe. Electric appliances and electonics are recycled, there is a lot of valuable materials in them.

  23. Nathan Dumbrowski says:

    So the money is to be made in building and retrofitting the plants and/or the utilities that stand to grab market share as the shift to EV takes hold. Got it.

    Having lived in Georgia for three years and now back to California I see a lot more Tesla’s on the road. I also was sticker shocked at filling the gas tank here to the tune of 2x the cost in Georgia. Makes me want to seriously entertain an EV purchase

    • COWG says:

      ND,

      If a shift to EV does occur, you can bet you won’t be topping off the juice at base utility rates as today…

      It will cost you more at home with a EV monitored rate and the charging stations will all be corporate owned and your charge price will raised to whatever gouge they can get… recurring revenue for something you gotta have… add in the taxes and surcharges and it will get expensive as compared for EV today…

      • El Katz says:

        Add to that the “demand pricing” schemes. Presently, late night rates are cheap where I live. Once EV’s grow and the evening demand rises, those benefits of late night demand pricing will evaporate as the rates will likely go higher.

  24. Colin Williams says:

    Surprised no blog post regarding the debt ceiling talk by Biden today. Touchy subject? No opinion ?

  25. Robert B. Langabeer says:

    Wolf
    I’m 80 and hate reading BS
    Thanks for your straight talk
    I do not know how you would do it but….
    “LIKE” is nice with your comment section
    I very seldom comment but you have some fantastic comments that I would like to “LIKE”
    I go to your “Report” for solid information
    Thank you Sir
    Bob

    • COWG says:

      Bob,

      Giving Wolf a compliment and having “beer” in your name is a sure fire way to have him as your newest best friend!

      Please add your comments to the wealth here… we beat each other up because it’s fun, not because we don’t like each other!

  26. Say It Aint So says:

    I do not object to EV’s…and I will believe it when I see it…that being a quality made EV manufactured in the US. But when I read about GM building in China I really get upset…No matter what the benefits are continued working with China is a zero sum game…Since the Government is so good at printing money and bailing out these Automakers Why can we not provide the Financial support to make the US less dependent on Chinese manufacturing?

  27. Olde Dutchman says:

    But Wolf, for our next act couldn’t we come up witih a self-charging battery that re-charges while driving?
    Isn’t it better to put money in manufacturing EV’s (look what just happened to the beaches in Southern California from careless oil production) than in
    FACEBOOK and INSTAGRAM, which are having a questionable effect on our children’s mental health?
    I know it smacks of desperation but what are the other alternatives for people-movers? We’re all in the game now, there’s no way out.

    • El Katz says:

      OD:

      It wasn’t “careless oil production” but, allegedly, the pipeline was snagged by an anchor from one of the many cargo ships littering the water near Long Beach.

      Imagine if it had been a HV electric cable or communications cable that got torn out.

      • JakSiemasz says:

        “Careless oil production” IS building a pipeline that could be “snagged by an anchor from one of the many cargo ships littering the water near Long Beach.”

  28. Nemo 300 BLK says:

    The primary reason Chevy moves the EV Bolt is that you could lease them from $0-200 a month if you knew what you were doing and you were able to stacked state and federal handouts.

    Here’s one of many examples off Leasehackr:

    2020 Chevy Bolt Premiere
    MSRP: $43,735
    Sale price: $40,900
    Monthly Payment: $0 (w/tax)
    Money Due at signing: $7,066 – Sign and drive (1-pay)
    Months 36
    Miles: 10k
    MF: .00001
    Residual: 53%
    Incentives: $13,650 (total)

    $8,250 Lease cash
    $2,500 dealer cash
    $1,400 Bay Area cash
    $1,500 Lease Loyalty (current volt/bolt lessee)
    Region: NorCal
    Leasehackr Score: 20.8 years
    Leasehackr Calculator Link: Score

    • El Katz says:

      You do realize that $10,750 of the “incentives” are supplied by the manufacturer (lease cash, dealer cash) and possibly the other $1,400 (bay area cash – unless the dealer is pitching that in from his holdback). Lease loyalty likely comes from GMAC ($1,500) and requires leasing through GMAC. There are no federal and state subsidies included in your data. GMAC will claim those as they are the legal owner of the vehicle – which might subsidize the “lease loyalty” cash. The LMF of .00001 is essential zero % financing (the lease calculator won’t work at .00000 as you can’t multiply by zero). You’re paying @$200 a month plus plus.

      You don’t have to be any strategic mastermind to score that deal. GM has an image problem with the Bolt due to recalls resulting from them starting on fire.

      Also note that the monthly does not include registration, taxes (sales or sales and use tax), so the quoted “sign and drive” might be malarkey unless they’re baked into that – which is often difficult due to local taxes and fees collected by different counties and cities. Read the mouse print in the ad.

  29. doug says:

    I rode in a VW id4 AWD yesterday with a friend who had replaced his Bolt with it. It was a great experience, and his comparison to his previous ride indicated to me that GM better get moving fast.

  30. c1ue says:

    The potential problem is that the existing duck curve is a result of 24/7/365 fossil fuel burning electricity plants.
    Renewables have a totally different profile – their peak production is skewed to the daytime – and during work hours.
    The batteries are also present new risks and problems in and of themselves: any sufficiently energy dense object approaches being a bomb at a certain point. The Tesla and EV bus fires illustrate this – and this problem is not ever going to go away regardless of the (possible or not possible) major lowering of battery cost and increase of battery capacity.
    Then there’s self driving. I’m now seeing self driving test vehicles in SF with lidar arrays on all 4 corners and the roof. We are now looking at $300K worth of gear. What a diamond-plated Rube Goldberg contraption.

    • Massbytes says:

      ICE vehicles burn more often than EVs and yes a full tank of gasoline is rather like a bomb. Could be worse, you could have a tank of hydrogen on board.

      • El Katz says:

        It’s easier to put out a gasoline fire than a battery fire. Modern cars have safety switches that disable the fuel pump after a collision.

        Gasoline doesn’t explode. The vapors do. Actually, a full tank of gas is less volatile than an empty tank due to said vapors.

        One of the reasons I never let our cars get below half tank.

  31. GSH says:

    Yes, EVs are more efficient. But it is not a huge leap over ICE. Lets look at the end to end power delivery losses for an EV:

    Thermal Power Plant (NG) 0.45
    Power Grid Delivery 0.94
    Charger Losses 0.92
    Battery Losses 0.95
    Inverter Losses 0.95
    Electric Motor Losses 0.9
    Drive Train Losses 0.95

    Total EV efficiency 30%

    • Wolf Richter says:

      GSH,

      Your first number, the big one, is wrong. Combined cycle natural gas power plants, which have been built since the 1990s, have a thermal efficiency of around 65% (not 45% as you claim). Renewables, now accounting for close to 20% of the total power consumption in the US, don’t use fuel at all. So redo your numbers.

      Then compare it to the energy losses from crude oil via refineries and pipelines and gas stations to the wheels of an ICE vehicle. After it gets the gasoline (after all the energy losses along the way), the thermal efficiency of an ICE vehicle ranges from 0% at idle to maybe 25% cruising on the highway. Now subtract the energy losses that occurred from crude oil to gas station. And that would be the sorry figure for an ICE vehicle.

      But yeah, there are no freebees when it comes to transportation and energy. You just choose the lesser evil, and maybe drive less or walk or ride you bike.

  32. ru82 says:

    I guess stick a fork into inflation? The price of TIP bonds keep dropping. Lower than the price back in February.

    It sure seems like every day prices have increase since Feb but what do I know.

  33. Trailer Trash says:

    Sure the electric drivetrains are simpler but the rest of the car is still a car with tires, suspension, steering, interior, air conditioning, electric doors and windows, and boatloads of electronics. All stuff that breaks and needs repairs.

    My friend that drives Amish people in her minivan spends plenty on repairs, and almost none of it is for the drivetrain. Heavy batteries pushing on suspension parts as tires drop into potholes will cause plenty of damage. Tire and suspension shops will always have steady business as bridges and roads continue to fall apart.

    Yesterday CNN had an article on the GM announcements. It pointed out that much of GM’s anticipated revenue growth will be from expansion into auto insurance, self-driving taxis, and some other secondary business. It always pays to read beyond the headlines.

  34. Seen it all before, Bob says:

    I think I’m just a late adopter.

    I would would been the guy sneering at the flaming broken down Model A Ford back in the early 1900’s while I rode past on my reliable buggy with my horse Bessie. Since Bessie mowed my field, the fuel costs were free. I’d tell them the closest gas station is only 50 miles away.

    I was wrong. I admit it. I think EV’s will be the future.

    I will upgrade to EV as soon as:

    1) The capacity can fit a family of 5 comfortably with a dog.
    2) The electric grid stops the rolling blackouts
    3) A reliable heater is available that doesn’t limit my miles.
    4) It is cost efficient to install solar panels on my house or the cost of electricity drops significantly. We currently cook and heat the house with natural gas at 1/10 the cost of electric heat.
    5) The range is 500 miles between charges. That is the range of my current gas car.
    6) The charging time is less than 1 hour. I’d sacrifice the extra 55 minutes compared to filling my tank with gas in 5 minutes.
    7) The charging stations are plentiful, like the gas stations.
    8) The prices drop with mass production.
    9) I keep my gas cars typically 10-15 years until the expenses start to go up. It is too early to tell how long the EV will last.
    10) They are reliable and don’t burst into flames. (Half there).

    • Seen it all before, Bob says:

      An additional comment:

      3) A reliable heater is available that doesn’t limit my miles.

      Maybe I could install a propane tank (with grill) under the hood and use a propane heater. Electric heat is very expensive and inefficient.
      I could also then have a roadside BBQ.

      • Zephyrum says:

        SIABB, my EV1 vehicles in the last century had heat pumps that worked very well and used surprisingly little energy. Electric *resistance* heat is inefficient, but heat pumps can multiply the heating energy by 4 times. ICE cars tend to have a lot of extra waste heat available and usually do have good heaters, but you can get a nice warm cabin without the wasted energy. Heat pumps can also cool very efficiently using the same machinery.

        • Paulo says:

          3X, not 4, and they don’t work well at all when it is cold. The 3X is at optimum temperatures. All home systems where I live have resistance coils in duct work for cold days. Furthermore, for pumps to work they have to run continuously and take a long time to reach desired temperatures.

        • Zephyrum says:

          Paulo, the Coefficient of Performance (COP) of an air-based heat pump can reach 4.5, but the ones I currently use reach only 4.0. Note that I said “can”, which reflects my actual experience here in California where the ∆T isn’t typically large. And yes, most heat pumps have a resistance heater backup, but that’s typically only used while the system gets going so efficiency increases after warmup. Those living in Michigan are going to have a different experience. It remains true that I used the EV1s for years and had no problem with a warm cabin. Hard to demonstrate now that the EV1s have been crushed, but lack of heating is not a worthwhile argument against EVs.

        • Nick Kelly says:

          ‘my actual experience here in California where the ∆T isn’t typically’

          What relevance does California have to car heating. Reminds me of being asked down there: what is that electric plug hanging out the front of your car?

      • drifterprof says:

        I once had a VW “Thing” which had a heater which, if I remember correctly, was a metal cylinder with a spark plug that burned gasoline (line from the gas tank).

        Very nice heat, when it worked. But it was unreliable. When the weather turned real cold, I would often be very chilled, while opening the hood and trying to tweak something to get it working.

      • Nick Kelly says:

        Trivia: I had a 68 Bug with gas heater. Used gas out of cars tank.
        Very hot on high and gobbled gas.

  35. Saylor says:

    I am always surprised by how the future is judged by current abilities. The storage of energy is currently limited compared to need. But that will change.
    Idling a gas turbine is not all that cheap in ‘off hours’. But an economical balance will be struck over time. Energy production will probably never be “one fuel to rule them all…” as it has been with fossil fuel.

    Where I live, the number of electric bicycles has shot up by a very large percentage in the last three years. And I do not see building out the power supply infrastructure for EVs to be all that complicated. So I expect one day to wake up and see a large population of EVs parked on the streets.

    I do have a concern though. The rare earth elements currently required for such production is of course limited. And our oceans cover a vast amount of that wealth. I fear for our oceans as mining goes under water.

  36. Old School says:

    The USA is functionally broke as in government cannot pay its bills with a real interest rate.

    The automotive industry already had too much capital flowing into it before Tesla came along. But as long as money is free a few hundred billion of excessive capital can be dumped into remaking a product that worked pretty well because government can subsidize production with negative cost of money.
    Real money isn’t free as you can tell by the accelerating cost of a house or college ed or health care.

  37. stan6565 says:

    Wolf, your opening paragraphs sets the situation correctly out as it is at the moment,

    Various Vehicles manufacturers are trying to be seen as being part of the electrification trend and green industry this and that trend, but, at the end of the day, they are all firing blanks.

    All they are trying to do is, ensnare the dummos in the “we must buy a car before it’s too late, Enid”, market.

    Easy peasy, millions of dumbf***cvs still floating around, now armed with free gov money,

    Part the fool from his money, and the world can go back to normal

  38. stan6565 says:

    Wolf,

    Apologies for asking this,

    Can you please bring back the little green button that takes you to the top of the page?

    • Wolf Richter says:

      Check your keyboard for the “Home” key (could be on top of the numbers pad). It will take you to the top. The “End” key will take you to the bottom.

      If you don’t have a “Home” key, try Shift + space bar.

    • Michael Gorback says:

      I would like a little red button that would transport you to Mars in a TARDIS and really piss off Elon Musk.

  39. Frankenstien says:

    One item I have not seen addressed much is the fact that oil production will never go away as there are many, many products that are oil-based. I don’t know if gasoline and diesel fuels are ALWAYS produced during the refining process, but it seems to me that because the refineries are already in place and producing those fuels, it doesn’t seem illogical that they will continue to produce them. If the majority of the transportation gets switched to EV, wouldn’t that greatly reduce the cost of gas/diesel? It seems to me that the cost of running an ICE vehicle will actually decline as the number of EV vehicles increase and that it will slow the adoption rate of EV’s. That’s just my guess, however.

    The greater problem with EV’s for me, personally, is the fact that while an EV would be fine for the majority of my driving, it is NOT fine for ALL of my driving. Mathematically, it doesn’t make sense for me to keep a second vehicle just to do the portion of my driving that an EV can’t handle. Put me on the list of people who will wait for further improvements in range and load hauling capability.

    • Auldyin says:

      @F
      I’m looking for the first non-diesel container ship and I don’t mean sails, we tried that and China was months away. No, I mean battery elecrtric where the ship carries 2 containers at the same 30knots across the Pacific as now.
      We could always stop moving stuff around of course, maybe that’s the end game.

      • Wolf Richter says:

        Container ships don’t burn diesel. They burn bunker, which is far nastier than diesel. And now there are moves toward LNG. LNG tankers have been running on LNG for a long time, so the tech is ready.

        • Auldyin says:

          @W
          Sorry, language again. I meant Diesel Cycle ie compression ignition, which can even run on powdered and liquidised coal, marvellous tech.
          Lng would presumeably revert to auto cycle, just guessing, haven’t looked at it.
          My point was that container ships are the engineering challenge industry, if you can’t get that off fossil fuels, it’s a waste of time everywhere else. Trucks, trains, ??? IMO
          You seem to have dumped some of my stuff, rubbish eh? OK, it’s your site I don’t mind.

        • Auldyin says:

          @W
          Not to go on, but just a sudden insight, that’s what your site does when you let it run.
          The Russians have a giant nuclear ice breaker under extensive trial in the Arctic Ocean, they are trying to clear a permanent northern sea route as a quicker alternative. Everything is being monitored for radiation and even school trips go for the tour.
          Now I wonder if they’ve sussed that containers need to go ‘green and they’re getting their tech ready for new ships.
          When you come to think about it the gubbins of a nuclear sub can’t be hugely bigger than the gubbins for a steam locomotive, ‘railfreight’ sorted.
          Dammit! I forgot, the ‘Greens’ hate nuclear even more than oil. Ah well stuffed again.

    • Old School says:

      I just listened to a mining analyst on Kitco. Average person has no idea about the volume of material that is going to have to be mined to try to hit the utopia of 2050 goals. If you really believe society was going to reach the goal you would be buying up all the silver, copper, aluminum, uranium, lithium and platinum mining shares you can afford.

      The reality is all of these materials have limited reserves at today’s price. If you want more they are going to cost you more as the supply demand curve changes and you have to process poorer quality reserves. Basically society will run out of a willingness to pay before the goal is reached. Right now Germany is at 33¢ per kw and imports nuclear power from France in winter. At some point you say I got to have money left over for something other than energy.

      Cost of solar panels has already bottomed as price of raw materials to build panels has increased. They are up 20 – 30% from bottom.

  40. Michael Gorback says:

    There are a lot of factors going into this, one of which is environmental impact. I’m not going to dive into the electricity supply issues.

    What I want to point out is that one of the major talking points in favor of EV is the environment and that the current preferred batteries use cobalt. Lithium-cobalt has a high energy density so you get more mileage.

    However, it is also at the high end of thermal instability and other dangers of spontaneous combustion.

    In addition, most cobalt is sourced from – shall we say – undesirable sources that dump toxic waste from cobalt mining into our oceans.

    The most stable and least toxic batteries are lithium-ferro-phosphate, which are much safer and less harmful to the environment. The one drawback is the low energy density.

    I have seen stories about more stable cobalt batteries but that doesn’t solve the environmental problem of cobalt mining.

    Hopefully lithium-ferro-phosphate can be made with higher energy density.

    I’m also concerned about the fragility of EV batteries. A rupture of the membrane between the anode and cathode can cause a fire and/or explosion. Pack hundreds of these together to make an EV car battery and you might as well put a few sticks of dynamite under your car.

    I can hear the chorus of people pointing out that it’s dangerous to ride around with a tank full of gasoline. How many news reports have you seen of ICE vehicles exploding while parked? ICE vehicles run on controlled explosions. Gas vapor, air, and ignition. All three are necessary in the piston to create an explosion. The same applies to a tank of gas.

    Grab a 30-06 and shoot a few rounds into a full tank of gas. Then do the same with an EV battery. See which one blows up. It’s all too easy to blow up an EV battery. The vast majority of times shooting a tank of gasoline does nothing.

    The only time I’ve seen an ICE tank explode it had been shot multiple times until fuel was puddled on the ground. Then they went to full auto and one bullet struck a spark, igniting the diesel. Vapor, air, ignition.

    OTOH you can make a single EV battery cell explode by hammering a nail in it. Overcharging and other situations can also cause explosions.

    IMHO this volatility is unacceptable, as is the toxic impact on the environment from cobalt mining. Cobalt batteries defeat the intent of improving the environment and they present an uncommon but not zero chance of spontaneous combustion.

    We need to compromise on energy density vs safety and environmental impact.

    • Wolf Richter says:

      OK, just to clarify: how a vehicle reacts when it is subjected to a hail of 30-06 bullets is not on my list of decision criteria :-]

  41. meadows says:

    Great article and comments! So many bright folks read Wolf…. thank you.

    This massive legacy auto industry investment is an echo from 45 years ago when GM, Ford, Chrysler, AMC were all caught flat-footed by the affordable, (mostly reliable) small cars from Toyota, Honda, VW and others…

    Their response was to produce variations of the Ford Pinto…or the Chevy Chevette…cheap, dangerous and untrustworthy. So the USA behemoths finally woke up but they got out on the wrong side of bed. I think this will happen again. As long as they make their money on high end trucks I doubt they will truly be committed to EV’s for the masses.

    We may be entering a new era of smaller more nimble auto manufacturers. I belong to a large group of car owners who could care less about looks but admire affordable, low-maintenance functionality. Gimme the EV equivalent of the Ford Model A… I’m OK with black, thanks.

  42. CreditGB says:

    Idle grid capacity? Really? With the onslaught of the Government eliminating hydroelectric, coal, and all fossil fuel generation in favor of “Green” energy, the concept of “idle grid capacity” will be just a footnote in a history book filed away somewhere. It will be replaced with “you may only charge when wind and solar at their optimum”. That is if you make over $600,000 per year, as it will be unaffordable otherwise. Go Green!!

  43. Old school says:

    At least England and Germany are leading the way on going green.. Maybe they can make all the mistakes so we don’t have to.

  44. Jim says:

    Unlike many people, I’m unsure what the future holds. But I do have a basic question: What happens if the rosy sales predictions fail or other unforeseen problems crop up and EV penetration of the automobile market never happens? Most all the movers and shakers think it will happen, but what if it doesn’t?

    • Wolf Richter says:

      No problem. There will still be plenty of ICE vehicles to buy. Lots of model flopped in the past (remember Edsel?). Steam cars eventually disappeared though they and electric cars where here first, and ICE vehicles came later. Things change, and the industry restructures and adjusts. People buy what they want to buy.

  45. Raymond Rogers says:

    The Ugly Math: GM, Ford, other Legacy Automakers Throw Hundreds of Billions at EVs, Only Auto Segment that’s Growing. The Government Made Them Do It

    Fixed it for you Wolf.

    • Old School says:

      I think there were 300 USA auto makers at one time. Only one that hasn’t gone bankrupt is Ford. Maybe Tesla will double that number, but I doubt it. When the Fed stops printing due to 10% inflation going to be a different wind blowing

    • Wolf Richter says:

      Raymond Rogers,

      Nope, the government didn’t make them do it. There is no requirement today or tomorrow or over the next few years to make EVs. People who buy EVs, including Teslas, are doing it because they WANT to own an EV.

      The fact that lots of people want to own an EV may be hard to grasp for you, but that’s a fact. Get used to it.

  46. joe2 says:

    God what a putsy shiny squirrel country. Like schools of herring swarming in unison after shadows. And I claim that is no coincidence but an artifact of evolution, or the lack thereof. In the long term biology will decide. in the short term conflicting biological impulses create chaos that must be navigated by the individual.

    Remember build a better mouse trap and they will come running?

    Rational leadership building character and community is a vague memory. Brass bands are back in style in Rivercity.

    Now it’s follow the loudest piper

Comments are closed.