I Love How Tesla Wreaks Havoc among Automakers with Massive Price Cuts, Huge Sales Growth, Even Huger Production Growth, and Overcapacity

Shareholders hate it. It’s bitter medicine for the industry that pushed upscale and jacked up prices so average Americans can no longer buy new vehicles.

By Wolf Richter for WOLF STREET.

What Tesla has been doing is fascinating, and it’s wreaking havoc among the legacy automakers. Tesla shareholders hate it, and shares have sold off, though they are still ridiculously overpriced. And other automakers’ shares have sold off too.

Tesla’s deliveries continue to surge. In Q1, global deliveries jumped by 36% year-over-year, which is a huge increase. Its overall market share has exploded. In the US, its market share reached nearly 4%, having tripled since 2020. This came out of the hide of other automakers. In Q1, it delivered a record 422,875 vehicles globally.

But it has ramped up production and production capacity even faster. Production in Q1 jumped by 44% to 440,808 vehicles. It has been ramping up production and investing in production capacity so relentlessly that for two quarters in a row it produced significantly more vehicles than it sold.

Over those two quarters combined, it built 880,509 vehicles, and delivered 828,153 vehicles. In other words, sales have soared, but production and production capacity has out-soared sales growth.

And now it needs to sell those 50,000 or so vehicles it hasn’t sold, on top of the vehicles it’s cranking out in Q2, and instead of cutting production, it’s cutting prices to boost sales.

And it can afford to do so because it had the fattest profit margins of any major automaker to begin with. For the legacy automakers, with their relentless price increases on internal-combustion-engine vehicles, and their dropping sales, Tesla’s price cuts and the threat of overcapacity are a huge threat.

Tesla continues building capacity with new factories. It now has a slew of vehicle assembly plants, auto component factories, battery factories, manufacturing equipment factories where it builds some of its own manufacturing equipment, etc. in the US, Europe, and China. It’s building an assembly plant in Mexico. There are rumors that it is nearing a deal to build an assembly plant and component plants in Indonesia.

Unlike certain other automakers – such as General Motors and Ford – it doesn’t incinerate cash by buying back its own shares, it doesn’t pay dividends, and it doesn’t have to take on debt to fund this capacity buildout or its product development; it funds them with its operating cash flow. And it sat on $22 billion in cash in Q1, up from $18 billion a year ago.

Overcapacity and price cuts. These two words are the bane of the legacy automakers. They’re horror words for the legacy automakers.

What Tesla is doing is the best medicine for the auto industry ever, and it’s bitter medicine for shareholders of Tesla, GM, Ford et al., and they hate it because they’re now sitting on this overhyped stuff that dropped in price. But so what.

What matters is to salvage the industry through new competition that will push it to produce cars that the average American can once again afford.

The industry has spent the last 20-plus years going upscale and jacking up prices to where the average American can no longer buy a new vehicle. US brands have killed their entry-level ICE cars over the past few years because they had small price tags and lower profit margins than the big equipment.

Going upscale in their models, and jacking up prices has inflated the average transaction price of new vehicles by nearly 50% since 2014, to $46,000 now (J.D. Power), which is just nuts:

What has gone horribly wrong with the auto industry is that they all – even Kia and Hyundai – went upscale because that’s where the big-fat profit margins are, and on top of it, they jacked up prices. And they’ve done it in unison. And over the years, new vehicles have become a luxury many Americans can no longer afford.

I’ve been screaming about this for years – because with this strategy, automakers are running out of customers in the US. And because sales stalled and then plunged, they’ve gone even more upscale to make up with dollars what they were losing with unit sales. That’s a huge problem for the industry – and for Americans who can’t afford those vehicles.

In 2022, total new vehicles delivered to end users fell by 8% from the already terrible 2021, to 13.7 million vehicles, below where deliveries had been in 1977. Over the past 25 years, the sound barrier for the auto industry has been to deliver 17.5 million vehicles a year, and they came close to it a few times, but never broke it. As a consequence of prices running away from customers, new-vehicle unit sales have stagnated for decades, with steep plunges in between:

And what this chart also tells you is that the booming EV sales come at the expense of ICE vehicle sales.  EVs sales have been the only segment that has been growing in leaps and bounds.

They’re now all chasing after Tesla – after letting Tesla eat their lunch for years. There are now about 40 EV models on the US market. And following Tesla’s price cuts, big price cuts have rippled through those models.

Total EV sales shot up by 45% in Q1 compared to a year ago, to a record 258,882 EVs, according to Cox Automotive. There will be over 1 million EVs sold in the US this year. In Q1, EV market share jumped to 7.2% of total sales.

So now Tesla is mucking up the oligopolistic playground of the legacy automakers where everyone agreed to go upscale and keep raising prices. Tesla barged into this playground, and it’s taking names, and kicking butt, and cutting prices.

Tesla still has the fattest profit margins among major automakers, and it can afford to cut prices to get volume.

Since last year, it has cut prices multiple times across the board. And it’s constantly tweaking its prices, not being encumbered by a franchised dealer system. It just raised its prices of its high-end low-volume toys-for-the-rich models by 2% or 3%, even as it massively cut prices of its highest-volume lower-end models.

Now a base Model 3 in the US – classified as near-luxury – lists for $39,990 on Tesla’s website, not including rebates. That’s about 13% below the average transaction price of all new vehicles.

The vehicle also qualifies for the new $3,750 federal tax credit and for some state incentives, such as the $2,000 in California. I hate EV incentives, EVs would do just fine without them, but that’s what we’ve got. So the Model 3 now costs $34,240 in California – about 25% cheaper than the average transaction price of all new vehicles in the US.

GM cut the price of its Bolt into the $26,000 range before rebates; 43% cheaper than the average transaction price for all vehicles. Ford cut prices on its Mustang Mach-E SUV. Other EV makers have cut prices as well.

But they haven’t been able to scale up their production capacity and supply chains, and they cannot yet produce at scale like Tesla can, and so their costs are higher. Ford, which is years behind Tesla in building its EV supply chain and production capacity, has said that it will be losing a ton of money on its EVs for years to come until production can reach sufficient scale.

Tesla has changed this dynamic of the auto industry. The promise of EVs was all along that eventually they would be cheaper because they’re vastly simpler to manufacture than ICE vehicles. And at scale, they’re now cheaper to produce than ICE vehicles, as demonstrated by Tesla’s profit margins and price cuts.

And EVs are so easy to build that a whole new generation of startups has piled in, promising to muck up the oligopolistic playground and at the same time create a beautiful shakeout amongst each other – and lower prices.

That’s how it’s supposed to be – that price competition breaks out, and prices get cut until profit margins vanish, and those that cannot become the low-cost producers get washed out. Consumers benefit.

But Teslas are not competing just with EVs. From day one, they competed with ICE vehicles. And other EVs are competing with ICE vehicles. And legacy automakers are going to have to deal with this threat, and their strategy of going upscale and jacking up prices on their ICE vehicles is going to fail in face of the surging competition from EVs. Over the longer term, they have to price their ICE vehicles to be competitive with EVs.

But obviously, for stockholders, that kind of competition is tough. Tesla is still a hugely overpriced stock, though it has come down a lot. GM, Ford, and other automakers are going to blow a lot of money trying to catch up with Tesla; and their ICE vehicles are going to face margin pressures and volume declines from this intense new lower-cost competition. And the EV startups in the US, those that will even survive, will be burning cash for years to come trying to develop models, scale up production, and grow their sales to where they can break even. For stockholders this will be rough. But I’m loving the fact that Tesla has barged in on the legacy automakers and is shaking up their game.

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  317 comments for “I Love How Tesla Wreaks Havoc among Automakers with Massive Price Cuts, Huge Sales Growth, Even Huger Production Growth, and Overcapacity

  1. Leo says:

    Waiting for my cybertruck. Could have bought another electric, but them ot wouldn’t have satisfied me.

    I expect price tag to be around 65K for 4 motor version with Autopilot.

    • dang says:

      This is only my opinion, after being led through the available information which is an emotional data set too begin with, by your presentation.

      The only question that I can think of is what is the role of emotion in the consequence of human decision to act.

      • Natron says:

        The decision point to act is always an emotional one, a leap of faith that our process is correct whatever it is. We just buttress that with as much logic and fact that we can come up with if one considers themselves ‘rational’.

        • VintageVNvet says:

          Seriously ”got over” the illusion of rationality re decisions long ago, and suggest ALL folks do so, as it is SO clear the oligarchy have done SO, and have trained their offspring who would listed to do so…
          Make EVERY decision other than trivial IN YOUR HEART.

        • Maximus Minimus says:

          Agree about logic, but what about competing with the Joneses?

        • 91B20 1stCav (AUS) says:

          MaxMin – jonesing about the Joneses is a peculiarly ‘Murican jones…

          may we all find a better day.

        • phillip jeffreys says:

          Soooo….if I decide to bake a lasagna at 425 vice 450 that’s an emotional decision?

          If I make a decision based on repeated experience (i.e., high probability of being right), it’s a leap of faith/emotional decision?

          I get the intended nuance on decision point.

    • GW says:

      The price wars are localized: Here in Germany Teslas cost twice what they cost in China. The electric car supply is tight and cars are not fungible: Currently manufacturers have all pricing power in the world.

      • Leo says:

        We in USA feel the same about cost of BMW, Porsche, Mercedes and Audi :).

        Hence Teslas that accelerate faster than nearly all German cars for same price are actually cheap.

        • Peanuts says:

          I never bought an Apple product. I will never buy a Tesla. I will buy a cheap Chinese car for town rides, if gas is too expensive. Out of town is for the 2 ton Diesel.

    • Kenneth M Luskin says:

      No way is a 4 motor Tesla Cybertruck going to be priced at $65K, unless it has a range of only 100 miles.
      Look at the price of the 2 motor & 3 motor Model S for guidance…
      = The price will be at least $90K
      Cybertruck is big = higher cost for more metal
      Cybertruck is big = bigger battery required
      And Every additional motor increases the total cost
      Finally, with a wait list of 500K Tesla can start the price at a very high point and then work downward over time.

      • Leo says:

        The premium models of Tesla don’t sell much. Also the big wait list of cybertruck was based on 38K price on 3.5% car loan.

        Tesla is installing a big factory in Texas with some big machines for mass production. All these investments point to a vision to disrupt the gas truck market in the US.

        It’s possible that cybertruck may have a premium version, but it will definitely have a mass production version, and by nature of being a truck, and thanks to Rivian 4 motor competition, the mass produced cybertruck will have a 4 motor configuration with Autopilot.

        So I just picked the price as high end of Ford F150: $65K

        Time will judge the estimate :).

      • David Priestley says:

        The Cybertruck is designed for manufacturability. Stainless steel external panels mean no paint line. The paint line is a very large, very expensive portion of an assembly plant. The external body panels will be bent, not stamped. That means no need for huge stamping presses nor large dies for those panels. The huge aluminum die castings they are using eliminate a huge number of castings and most if not all of the robotic welding lines used by every other large volume unibody manufacturer. If the use a 48 volt architecture with communication to devices instead of switches they will eliminate the expensive, difficult to install wiring harness. These add up to enormous savings in capital, parts count, complexity, labor and cycle time. The rest of the industry is way behind in these innovations.

    • Paul says:

      Tesla is not building an assembly plant in Mexico. Tesla has announced pans to build such a plant. Big difference.

      • Wolf Richter says:

        on any major project, “planning” is the most important part of “building.”

        • VintageVNvet says:

          aw c’mon Wolf,,,
          Planning certainly is AN important component of major projects, far damn shore;;;
          How some ever, if that final trade person applying the final touch to the building is not ”right on the money” then all the planning in the world goes right down the drain…
          This concept is also very very well proven in planning for military actions, etc.

        • 91B20 1stCav (AUS) says:

          “…everyone has a plan until…” oh never mind…

          may we all find a better day.

        • phillip jeffreys says:

          Not funding?

      • intosh says:

        Give it a rest.

        We all here must eat crow about Tesla. Even the author has changed his tune about Tesla. Not too long ago, we were mocking it for having a rounding-error market share. Now, it’s 4%; 14% before long. Swelling cash reserves, fattest (apparently) margin in the industry and accelerating expansions across the globe. Here where I live, I see white or black Model 3 at every second intersection.

        Never underestimate the sheep mentality.

        Never underestimate the sheep mentality.

  2. Leo says:

    Auto industry dug itself in hole with following 2 shovels
    1. Increase unit price of gas vehicles to EV range by focusing only on bigger cars.
    2. Paying big to executives who built empires by hiring unnecessary managers to auxiliary functions increasing the overhead. Still no layoffs by these idiots.

    • dang says:

      I mean it’s like trying to predict the path of AI is like trying to predict the path of Pandora when she was released from the box.

      • dang says:

        As far as Musk’s Tesla strategery, I am agnostic. In the sense that I haven’t a defensible clue where the wind is likely to blow us,

        I only know that the survivors will band together.

      • The Innsmouth Look says:

        Pandora only opened the box, she wasn’t in it.

      • VintageVNvet says:

        Good one dang,,,
        At least for us ”war babies” who had to listen to SO much ”rationalization” for SO many years.
        NOT to denigrate in any way our wonderful heroes in WW2 who gave their ALL,,, frequently…
        As other folks on here frequently remind us,,, as they should,,,
        May the Great Spirits who absolutely blessed our folks in ALL wars,,, perhaps not so much since,,,
        Bless ALL on here who want to make things better for us ALL…

    • Kenneth M Luskin says:

      We could see another round of BKs within a few years for all the legacy auto companies.
      BYD and Tesla are going to eat their lunch in EVs….because no other OEMs are making money on EVs

      • BobC says:

        Ford and Chevy are going to eat Tesla’s lunch when it comes to trucks. Ford F-150 Lightning is already available, Chevy Silverado will be out later this year, and the Cybertruck — who knows? Legacy manufacturers are EXTREMELY good at trucks. Musk isn’t.

        • David says:

          Trucks are a very small market segment, although maybe the US is different to other countries in that regard.

  3. Leo says:

    I do appreciate how Elon Musk was able to demonstrate how to efficiently run companies by focusing on people who do real work: Twitter cut to 1/3 staff and still working fine and is probably profitable now.

    • Christof says:

      The rest of us, living in reality, can see Twitter will never be profitable again.
      Honestly, why concoct this moralistic narrative and make speculations about things you have no idea about, just to bolster the graces of some South African guy who survived the 2001 .com crash?
      It’s like the 21st century emperor’s new clothes, turbo powered by the internet.

      • Nacho Bigly Libre says:

        Defying predictions of all the naysayers, Twitter has been quite stable. It has even live broadcasted highest watched events like soccer world cup final.

        It has rolled out more features in last 5 months than in the 5 preceding years, with just 1/3rd the staff.

        Why be so salty?

        • Wolf Richter says:

          What Musk has done to Twitter is really fascinating. We don’t know the end results yet, but it’s fascinating. This will become a topic in business school case studies.

        • rojogrande says:

          I find it interesting that Christof says something as definitive as Twitter will never be profitable again, while simultaneously accusing someone of speculating about things they know nothing about. Never is a long time. Christof’s argument is diminished by his unnecessary reference to Musk being South African, which seems wholly irrelevant to the issues at hand.

          I have no dog in this fight. I’ve never owned a Tesla or its stock (at least directly) and I’ve never been on Twitter. What intrigues me is the fact so many people are so sure their views of Musk are correct, whether positive or negative, and their views seem to change as Musk’s antics change.

        • Maximus Minimus says:

          The possibilities are still not exhausted. Why read bland, machine written articles on Bloomberg when you can have boots on the ground reporting on Twitter? The one thing that still hampering Twitter is the text length limit. This historic feature looks like from a telegraph era.

        • Toby says:

          “quite” stable doing a loooot of lifting here. So stable that I deleted my account, lol.

        • NBay says:

          Spell check error- Blonde wigs…..but it gives me the chance to add little swarming drones carrying small shaped forehead charges getting power from each pole and just hanging out to watch for non-saluters.

          People that resist or refuse to do demeaning/unfair things can present problems following orders later on when really needed, and are “dealt with”, as anyone who “served” knows….and we were much better armed than our “glorious 2nd amendment citizenry” is.

        • intosh says:

          “quite stable”.

          Twitter is a mature service. If you know anything about software, you’d understand that running software will keep running. There is redundancy. Behind the scenes, there might be failures here and there but most users won’t notice. These things won’t simply come to a screeching halt because they now employ, say, 6 techies instead of 10 to monitor and restart processes.

          Most of the “new features” are little tweaks.

      • CSH says:

        Twitter never made a profit, Christof. That’s why Elon began to take the steps he did. It was headed for the rocks the way it was just before he took it over. It was burning through a giant pile of VC cash with no profits in sight. This is an attempt to save it. However, the changes he is making are not guaranteed to work, and the whole venture may still fail.

    • Who Cares says:

      Uh. 80% cut to the number of people employed before Musk got there. And no that is not healthy, even the 1/3 you suggested is unhealthy.

      Worse is that Musk has a wrong idea of what Twitter is. Twitter is a business that sells ad space. Musk keeps insisting it is a software and server business. And acts on that, resulting in an expected reduction of revenue of about $800 million for 2023 (which is only a reduction of 20% up from the 70% to 80% loss in the last 3 months of 2022) due to advertisers staying away despite Musk dropping the rates for ad space, which were already the lowest of the big social media companies, through the floor resulting in the replacing of ads from companies with good reputations with bottom of the barrel ads.

      Add to that the added $1.5 billion in debt service (that is about $1.2 billion in rent and $300 million repayment) for 2023. Where Twitter, before Musk decided he was going to own it, was expected to run a $200 million profit for 2022. that means that Twitter is expected to lose $2.1 billion before taking into account that Musk fired about 6500 Twitter employees. The average salary for a Twitter employee in 2021 was around $100 000. Increase that by 50% for employer costs that are not reflected in what an employee gets. That means Twitter is estimated to lose 1.1 billion over 2023. Which is inline with Musk admitting that Twitter is losing $4 million per day.
      Musk already went begging at the banks to reduce the costs of the loans Musk saddled Twitter with. The reply by the banks is telling in how much faith the banks have in Twitters future; Musk was to remove the loans from Twitter and make himself responsible for the loans, then and only then would the banks consider a reduction in the rent percentage of the loans. And that is in addition to the banks booking a 20 cents on the dollar loss on these loans in 2022 alone and the market not willing to pay that with the lowest offer being 60 cents on the dollar.

      Do note that that loss does not include the cost of lawsuits for Twitter refusing to pay suppliers, cost of lawsuits for Twitter not fulfilling contractual obligations towards ex-employees, cost of lawsuits for Twitter not fulfilling obligations required by law when performing mass firings, cost of lawsuits for Twitter improperly firing people (that one is mainly outside of the US where employees actually have some form of legal protection instead of being able to be fired at will). And I doubt these are all the categories of lawsuits coming Twitters way.
      Then there are the future costs of thinking the FTC can be ignored, future costs of thinking that thinking the EU (and Germany in particular) regulatory agencies can be ignored, and future costs of thinking the regulatory agencies of several other governments can be ignored.

      The results of anything that Musk has been doing to get more revenue are more then lackluster. The blue check mark (not to be confused with Twitter Blue subscription) before Musk bought it was not so much a status symbol, though it evolved into one due to it being the recognition by Twitter that you were important enough to the revenue stream of Twitter that Twitter was willing to guarantee you were you, as a means to reduce lawsuit costs (impersonator/scammer unmasking) and improve the value of ad space next to the verified accounts. Musk made the mistake claiming that it was a status symbol only and still refuses to think otherwise so now it is either scammers or people/organizations that have not yet been removed from the database. There are an estimated 300 000 check mark subscribers for about $30 million revenue/year if they all pay monthly. It is so bad that Musk himself has been paying to keep celebrities check marked in addition to ordering the biggest accounts to be exempted from not having a check mark (see for example Stephen King stating that his account claims he paid and offered his phone number when he did neither). The same goes for the company and government check marks, only a small group is willing to pay and to cover that up the companies with the biggest accounts (and IIRC the first 1000 or so advertisers) are getting a free pass.

      No one is willing to pay for API access to the point that public services for disasters and other warnings are telling the users that they should not rely on Twitter to get warnings. Musk flipped out when Microsoft removed Twitter from their one click advertisement program since that uses the API and Microsoft was not willing to pay so that others could send more money in the direction of Twitter.

      Musk is effectively at war with journalists which form one of the largest user bases for Twitter. You are only allowed to report positively on Twitter or else you get banned by Musk personally. Having your news organization back you up results in petty vengeance by Musk.

      Musk is lucky that there is no real replacement for Twitter as of yet. That in addition to the inertia and the unwillingness to have to rebuild a following is slowing the exodus significantly. If not for that ad revenue would have dropped even more.

      So no Musk is not a good example of how to run a company efficiently. Musk is (unfortunately) an example of someone who has been insulated from reality by yesmen and sycophants who was then dropped into a company that did not have a culture to isolate him from the rest of the company.
      As it stands Twitter will make it to 2024 by the skin of its teeth, after that Twitter goes on deathwatch. That is contingent on two things. Nothing happening to the infrastructure of Twitter seeing that Twitter neither has the people nor the knowledge left to deal with that and Musk not damaging Twitter further with his petulant entitled thinking he is a 15 year old edgelord behavior.

      P.s: what Tesla is doing now is being done without Musk (as discontent under shareholders with regards to his compensation as absentee CEO of Tesla has shown) so you cannot even give Musk credit for creating competition in the car market.

      • Ed C says:

        Your political bias is showing. Musk has done more for EVs (and the planet) than anyone in history. He has somehow also liberated Twitter from censorship and sordid political games. I’m not a Tesla owner or stockholder but I can recognize greatness when I see it.

        • Escierto says:

          The people that Elon Muskrat is sucking up to will NEVER buy a Tesla. They hate EVs and it doesn’t matter how much he grovels to them. In the meantime he is completely destroying his brand with those who DO buy EVs. Members of my family own four Teslas. Now none of us would ever buy a Tesla.

        • Doolittle says:

          Completely agree! Who cares and apple sound fearful and angry. I wonder why…

        • Who Cares says:

          Actually it is you who is showing what they are made of when you realized the facts are on my side without you being able to refute them so you amateurishly tried to turn facts in ‘just your opinion so I can ignore the facts’.
          The fact is that Musk is an incompetent hack when it comes to running a company. The fact is that Musk is an incompetent hack when it comes making a company running efficiently and/or profitable.

          So why does Musk think he is a genius in those fields? Well he is a genius at selling a dream, a genius at inspiring others to try and make that dream reality. The problem is that to be as good as Musk was (and due to what is happening now past tense is correct) you need to believe to your core what you are trying to sell. Musk applied that same to something he is incompetent in (so he really believes he is a good manager when he isn’t). Both Tesla and SpaceX benefited massively from Musk inspiring the people working there and aggressively pushing them to make his dream reality but every single time that Musk himself actually interfered in the running of either company he set the realization of his dream back.

          P.s.: since you tried to cast aspersions on what I wrote due to my supposed political leaning I’ll let you in on a secret. I’m an European conservative who is driving a Tesla and would happily buy a Tesla as replacement since unlike a bunch of people I know I can separate the man (Musk) from the company (Tesla).

        • Flea says:

          Is that why his rocket blew up ,were way past that type of technology,probably only cost taxpayer 1 billion . Who do you fools think created MUSK ,look in a mirror ,it’s you

        • ru82 says:

          IMHO, twitter was becoming very politically biased under Dorsey. I did not use it for 8 years. I started using alternatives.

          I actually started using Twitter again once Musk bought it. I will give it a try again.

          Not that my opinion means much at all.

        • intosh says:

          “He has somehow also liberated Twitter from censorship and sordid political games.”

          You need to pay more attention. He “liberated” on side, while oppressed another. He is not neutral, journalistically, politically, or in any other way. He is trying to disrupt the mass media order for his own benefit, interest and agenda, of course. He is part of that circle of globalists, power brokers of the ruling class. His SpaceX and Starlink work for the military. His Twitter will shape politics and public opinion, and (in combination with Starlink) will facilitate dissension/regime change operations around the world.

      • Apple says:

        Very nice write up Who Cares.

      • cresus says:

        Maybe you should have bought Twitter and run it yourself. And Tesla too.

        • Who Cares says:

          Twitter would never have sold for the bid I would put on it (that means I considered the value of Twitter based on the share price at the point Musk made his offer overvalued). Besides management at that point, if they’d managed further entanglements with the regulators, looked like it finally got Twitter to the point where the company was marginally (3-5% of revenue) profitable.
          Same thing for Tesla, the shares are still overvalued, the the problem there is that their value is dropping because people project Musks antics on Tesla instead of looking objectively at the car market and production capacity Tesla has. Besides with Musk being an absentee CEO the management of Tesla is getting things done.

          Oh and unlike Musk I do not consider myself a competent enough manager that I am capable of fulfilling any C*O role.

      • Jon says:

        Not a musk fan but what we see all these evs around us is all because of Musk.

        I drive 2 evs not tesla though but thank ful to Musk to force other automakers to come with their own evs.

        Btw.. musk cutting 80 percent staff and Twitter still running without any issue is definitely unhealthy
        But it is unhealthy for ex employees not for Twitter

      • CB says:

        Twitter is a business that sells ad space? Odd that no one can find any type of records that indicate that Twitter ever made enough money off advertising cost to cover the cost, let alone make a profit…that is one of the big issues may have debated during the Musk takeover, where exactly did all of Twitters money come from? Many have speculated, it definitely wasn’t off advertising.

    • Coffee says:

      I think Musk is not really in the picture at Tesla ATM. He is too busy playing chief cook and bottle washer at Twitter.

      And that is probably a good thing.

    • Tony says:

      You think Twitter is profitable? Really!? Good grief. I’ll assure that it isn’t and it’s worth less than half today what Musk paid for it a few months ago. He’s lost over $23B of value and still loses money on it every single day. Oh, and he cut 80% of the staff not 1/3.

      • Harvey Mushman says:

        “Oh, and he cut 80% of the staff not 1/3.”
        4/5 to the lay person. :-)

  4. Jorge says:

    Pretty sure 3 to 4 brands will get wiped out in the next 5 years. Watch out Toyota is one of those. It is very late into the game.

    • Toyota believes in hydrogen-that is where their focus is – their EV efforts are merely ‘window dressing’

      • SnotFroth says:

        Seems like hydrogen fixes one problem, refueling time, and introduces several more, like reduced efficiency and 10,000 PSI gas tanks.

        • DJ says:

          Refueling times for hydrogen cars are only fast for the first car. If you have a line of cars then the pumps need to recalibrate in between each fueling which adds 10 minutes to the cycle time. At that point you might as well just Supercharge your EV instead. This problem is made worse by the fact that hydrogen fueling stations are so expensive (20x more expensive than EV fast charging stations).

        • kramartini says:

          “Oh, the humanity”

        • Another Craig says:

          Ah, hydrogen. The fuel source that takes lots of energy to create (catalysis of water), energy to cool and compress to a liquid that can be shipped in volume across the world (which takes more energy) then trucked to the hydrogen filling stations (using more energy, whether the truck is an ICE, EV, or runs off of H2) just so that the end-users can claim to be oh so green. (California recently entered into a deal with Saudi Arabia to do exactly this, and since SA doesn’t have much in terms of renewables, the electricity that starts this chain is from burning those evil fossil fuels that California doesn’t want to burn.)

    • Kernburn says:

      Buick used to be really popular in China but they are shunning foreign cars now…and I wouldn’t be surprised if Infiniti goes the way of Oldsmobile too

    • SoCalBeachDude says:

      Ford is losing $35,000 per vehicle on every EV it makes and would be 3 billion dollars ahead if it simply shut down all EV production.

      • Wolf Richter says:

        Like I said, Ford is YEARS behind Tesla in ramping up production and get production to scale where it can make money. It took Tesla 10+ years before it started making money.

        In 2022, Tesla had more net income (GAAP) than GM and Ford combined:

        Tesla: $12.6 billion
        GM: $9.9 billion
        Ford: -$2.0 billion (loss, LOL)

    • Ed C says:

      Toyota seats are the only ones my finicky back can tolerate. They aren’t going out of business if I have anything to say about it. If I did buy a non-Toyota EV I’d have to tear the seat out of my RAV4 and install it in that car.

    • VintageVNvet says:

      care to expand/elucidate on Wolf’s Wonder Greg??

    • DV says:

      Camry is still best-selling car in America.

      • Wolf Richter says:

        Bestselling “car” but not vehicle. Trucks rule! Toyota’s bestselling vehicle is #5 (Camry) and #8 (Tacoma). Just a hair behind: Tesla Model Y, #9. The Model Y will beat one of both of the Toyotas this year.

        2022, per Car and Driver:

        #1 Ford F-series (653,957 units sold)

        #2. Chevy Silverado (513,354 units sold)

        #3. Ram Pickup (468,344 units sold)

        #4. Toyota RAV4 (399,941 units sold)

        #5. Toyota Camry (295,201 units sold)

        #6. GMC Sierra (241,522 units sold)

        #7. Honda CR-V (238,155 units sold)

        #8. Toyota Tacoma (237,323 units sold)

        #9. Tesla Model Y (231,400 units sold, estimated)

  5. Nestor says:

    how do you think the nationalization of lithium in Chile will affect battery production. Mexico has done something similar. and China may hold back some materials. i don’t know. maybe it will be harder to transition with more limited materials. or, if we can get materials, the costs will be much higher. just a thought

    • Wolf Richter says:

      The US has huge lithium reserves. And it has only one lithium mine. Lithium is abundant in other places too. But mining it is a nasty activity, and so there is resistance to mining it in the US.

      Nationalized mines can be very reliable suppliers — more reliable than corporate-owned mines because they don’t file for bankruptcy, as many mines have done.

      Chile wants to make sure the wealth from the mines gets spread around the people in the region and more generally in Chile, and not get siphoned out by global corporate interests. National oil companies, such as Aramco, were created for the same reason. And they’re reliable suppliers. For Chile to try to export the lithium and keep the wealth from those exports at home makes sense.

      • Nestor says:

        Thank you.

      • whatever says:

        Lol. Nationalization means corruption,. “Spread Around” the wealth will mean the president’s cousins as EVPs and so on. Like Pemex, which is sitting on tons of oil it can’t extract profitably, this will be a slow slide into the typical socialist decline and incompetence. I had no idea you were a socialist, wolf.

        Next you’ll do an article how Venezuela, who sits on the highest proven reserves of oil in the whole world, has a Nationalized oil industry that is efficient and a good place to do business since they spread the wealth around and won’t go bankrupt.

        • Wolf Richter says:

          LOL. The worst corruption, greed, and recklessness is with corporations. They answer to no one. In Chile, the government at least has to respond to voters. Corporations have no such inconvenient limits. Next you tell me that Enron and Purdue (marketed the opioids) were paragons of virtue.

        • eg says:

          Thank you for that response to “whatever” Wolf — the mental inflexibility of some people is bewildering.

        • phoenix says:

          Based Wolf

        • Toby says:

          Why compare to Venezuela if you could also compare to Norway?

        • intosh says:

          Maybe Venezuela is not efficient and not a “good place to do business” because of US-led sanctions?

      • Depth Charge says:

        “The US has huge lithium reserves. And it has only one lithium mine. Lithium is abundant in other places too. But mining it is a nasty activity, and so there is resistance to mining it in the US.”

        Lithium mines are indeed nasty. Batteries are nasty. I don’t see EVs as some sort of environmentally friendly solution.

        • Wolf Richter says:

          I see your diesel truck as the worst possible solution.

          There are no free lunches when it comes to energy. Everything is bad. It’s a matter of degrees. The only free lunch is “using less” = conservation.

        • Depth Charge says:

          “I see your diesel truck as the worst possible solution.”

          Without diesel trucks, there would be no lithium mines or lithium.

          When doing calculations on what’s environmentally friendly, it should be cradle to grave. This includes the mining of the lithium and the disposal of the toxic battery waste.

          I agree with you that there is no perfect answer. Beyond the environmental impacts of EV, I don’t want the power company to suddenly decide how much it costs for me to drive.

        • Wolf Richter says:

          OK, then add the environmental damage of fracking and refining and transporting crude oil and petroleum products, and the environmental costs of mining the metals and minerals that your 5-ton truck and its huge engine is made of, the environment damage from steel production, iron production, aluminum smelting, etc. We’re just used to all that. But lithium mining at this scale is new.

        • Not all energy is “bad.” HB11 Energy’s ponderomotive hydrogen-boron fusion design uses safe reactants in tiny amounts, releases no heat, radiation or carbon, and leads the industry in fusion output. If you haven’t heard of them, they’re Australian, and don’t do much promotion.

          NASA’s lattice confinement fusion design uses safe deuterium for fusion, and the thorium or unenriched uranium lattices can be reused. The power is from the deuterium, not the lattice material.

        • VintageVNvet says:

          Wolf, et alia:
          While it is certainly topical and convenient to ”diss” all, repeat ALL fuel sources of energy, including the vast and increasing ”fuel based” HUGE and UGLY and locally challenging ”wind farms”…
          IMHO, those sorts of things will be the major source of ”net” energy for at least a ”while.”
          WE, in this case the entire species WE can only hope that the politics can and will ”catch up” with the physics,,, including, MOST of ALL the ”theoretical physics”…
          AT least somewhat seriously, folks need to know that right now it is possible to do SO much better, through physics, math, chemistry, biochemistry,, etc., most of which has been either ignored to denigrated by SO many.

        • Depth Charge says:

          Of course, Wolf. All of it needs to be considered. But what grates on me is this fantasy some of these EV proponents spout where an EV is not the result of burning diesel fuel and using fossil fuels. All of the components are made in the same way, they’re just not burning it in their respective motors once they hit the streets.

          Their tires are made from oil. Their plastic interiors, wiring harnesses, greases for bearings – everything is fossil fuel derived. EVs cannot exist without drilling for oil, yet that’s the fantasy that’s being sold by people with selective facts as their talking points, like it’s the end of big oil. It’s not.

          This is most certainly not you I am talking about, which is why I love your site. You present facts backed up by data. I love the truth, even inconvenient facts. I only want honest conversations from all parties, especially in the auto industry, big oil, utilities and most importantly the government. Sadly, that’s not what we get.

        • VintageVNvet says:

          This for Wolf: ”There are no free lunches when it comes to energy. Everything is bad.”
          GRAVITY is the free lunch fuel; problem is that the barkeeper hasn’t figured out how to serve it yet.
          Our species must hope our theoretical physicists get on with the solution that will provide energy only cost limited by the durability of the ”equipment” needed to harvest the gravity that is all around us all the time everywhere on earth soon.
          As in sooner than we run out of all other sources of ”fuel,” all of which we know to be finite UNLIKE gravity. (Or, if you want to be really rigorous, MORE finite than gravity, eh?)

      • kramartini says:

        Excise taxes can serve the same function with less risk of mismanagement and corruption.

        • Kevin says:

          High speed train and public transit are much greener than electric car, but there are too many barriers and it will cost too much to build in the US. China has high speed train going to every major city and very advanced subway system, but there were able to get it done because of no environmental regulation and cheap labor.

      • CB says:

        Lithium mining is a very nasty and not environmentally friendly ordeal that uses a lot of precious resources like water. There is opposition to it America for good reason, not to mention how awful cobalt mining in the Congo region of Africa is as well, and most EV batteries also use Cobalt…at what point are we cutting our noses to spite our faces when it comes to protecting the environment?

        • Wolf Richter says:

          OK, then add the environmental damage of fracking and refining and transporting crude oil and petroleum products, and the environmental costs of mining the metals and minerals that the ICE powertrain is made of, the bauxite strip-mining so you can have an aluminum cylinder block and transmission case and other components, the environmental damage from steel production, iron production, aluminum smelting, etc.

          We’re just used to all that. That damage and ravage is now part of the landscape. And we accept it more or less. But lithium mining at this scale is new.

          And lithium mining will replace some of the other stuff, including the stuff I listed, to the great fear or the oil companies and all the others that form the backbone for the ICE world.

      • Carl Wilson says:

        Still going on and on about lithium when sodium is already taking over? I come here to get some understanding about finance (which I admittedly lack) and laugh over the display of ignorance about technology.

        • Wolf Richter says:

          Sodium batteries are being dabbled with. And that’s it. They still have a much lower energy density than lithium batteries and would have to be even bigger than lithium batteries. So maybe in the future they’re ready for EV prime time. So by the end of 2023, a Chinese company is going to come out with the first EV with a sodium battery, to experiment and test. Automakers are dabbling with them because they’re interested in the tech and want to test it, but this tech isn’t ready for mass-market EVs. It may be years before it is.

    • Nacho Bigly Libre says:

      Hugo Chavez’s Venezuela nationalized huge oil projects to spread nation’s wealth to its people. You can use that as an example of how intentions and results diverge.

      • Ryan L says:

        Norway did somethung similar. How are their results?

        • kramartini says:

          Nigerian oil wealth is siphoned off by a corrupt elite that uses it to buy foreign luxury goods and domestic elections.

        • Nacho Bigly Libre says:

          Isn’t it wiser to compare Venezuela with another Latin American country than a Scandinavian one?

          Two natural resource rich countries – Venezuela and Chile. One embraced socialism and demonized capitalism. Another embraced free markets and demonized Communism. We have seen how that turned out.

          We can revisit this comment thread in 10 years and see “how it started” and “how it’s going”.

      • Kurtismayfield says:

        Texas has a huge oil sales to university fund program. Norway has the huge sovereign wealth fund. The Saudis have Amarco. There are plenty of examples where this works.

  6. Jane says:

    The security patrol in my complex is driving Tesla’s now. All the mucky mucks with their Teslas are now driving the same car and mall cops.

    Tesla is no longer cool.

    • Wolf Richter says:

      Yes, Teslas are now just regular high-volume cars that got a whole bunch cheaper over the past eight months.

      • Nacho Bigly Libre says:

        Nice lessons here with the Tesla price cuts.

        Competition brings out innovation and lowers prices. Consumer wins.

        Competition is cross-domain. Competition for trains are not just other trains – it’s airplanes and cruises and pipeline companies.
        Competition for camera companies are not just camera companies but also phone manufacturers.
        Competition for dead tree publications are not just other publications but also social media companies.

    • michael says:

      That is true. When they were more expensive and less people had them, they were image signalers. Now they are just plain $40k cars. I wonder how low margins will go as they become fully mass market? Is Toyota the best margin case in ICE and Hybrid and will TSLA approach that?

  7. American Dream says:

    Average price of 46k is awful and astounding. Kick in higher interest on loans and I’m sure some of these auto loans people are taking out are laughable.

    Gotta be influencing used car prices and demand as well for anyone sensible enough to not have an $800 car payment on a Toyota lol

    • Lauren says:

      I have a friend who has a $900 payment on a F150 even after a $35,000 trade-in. Hard to see how he doesn’t end up underwater at some point with how fast they depreciate.

      • Dubronik says:

        …and don’t forget the $$$Gas to drive that monster.

        • Depth Charge says:

          And the licensing, insurance, maintenance and repair. The trucks make zero financial sense at those prices.

        • VintageVNvet says:

          DC: as one of you fans, second only to the Wolf,
          I can and do say that pickup trucks, including all of those owned the last fifty years have NOT been any kind of continuing asset…
          One of the wonderful mentors, or perhaps femtors who where SO helpful told me this 50 or 60 years ago when I described my latest ride as an asset…
          Thanks again for your many posts.

        • Depth Charge says:

          Thank you, VVNv.

      • MM says:

        $900 car payment? Geez that’s almost as much as my mortgage.

        • Depth Charge says:

          It’s double my first mortgage. It’s ridiculous. And she said that’s with $35,000 down. I’m not sure what these people are smoking, but they are as much to blame as the dealerships and manufacturers.

        • Lauren says:

          It’s the ‘Limited’ version. He said it cost about 100k. For a Ford lol.

    • misemeout says:

      Tesla gets lots of government subsidies in the form of tax credits, free or low cost charging stations, preferred parking and hov access, which you have to include in the cost of ownership. Without those subsidies they wouldn’t be nearly as profitable. They cost an arm and a leg to insure, too

      • Wolf Richter says:

        Tesla has built its own charging station network in the US, with its own funds, the largest charging network anyone out there has.

      • Jay says:

        They do not cost an arm and a leg to insure. USAA charged me $2 more a month than my 2016 Subaru Legacy. Tired of hearing this incorrect talking point.

    • Depth Charge says:

      “Average price of 46k is awful and astounding.”

      Up over $10k in a couple years. What did we get in stimulus checks, one for $1,400 and one for $800? So, $2,200 in stimulus but a new car went up $10k. What a bargain. And that’s just ONE item of the hundreds which have hyperinflated. Yet there are still meatheads who want more stimmy checks. You can’t fix stupid. “You will own nothing and like it” is sounding more likely with every passing day.

    • David says:

      Lower finance costs (as a result of QE) have driven vehicle prices higher and the auto makers down a dead end by concentrating on higher spec and more complex to build models.

      It will become painful as this unwinds.

  8. Flea says:

    Toyota is one of best cars ,suv made there lots are empty ,I doubt they won’t survive .

    • Don says:

      Toyota knows how to build cars, they have a lot of experience with electric motors, and they have invested massive amounts of money into battery research. My suspicion is that they will end up beating Tesla at their own game.

    • Ed C says:

      Wasn’t it Toyota’s hybrid Prius that kicked off EV’s? My brother drives one. I drive a RAV4. I wouldn’t write off Toyota.

      • Max Power says:

        Ore like the Nissan Leaf which is a true EV.

      • El Katz says:

        No. A hybrid is not an electric car. It uses fossil fuels and has electric assist.

        Believe it or not, it was the Honda Insight that was the first hybrid passenger car registered in the United States…. despite all the hype and hoopla over Prius. The problem was that it was butt ugly…. had sort of a “Jetson” vibe…. and was smaller than a coaster wagon…. and their marketing whizzes refused to offer one to the “A” list peeps at the Oscars…. like Toyota did.

        • Ross says:

          My sister has a 2019 Insight that she really loves, and is worth more today here in Nova Scotia than what she bought it for. We don’t think it’s butt ugly.

    • Truth says:

      Between Toyota and Tesla being around in 10 years… the smart money is on Toyota.

      Tesla is relying on a lot of stale models and first mover advantages that aren’t holding up much longer.

      The new entrants into EV will virtually all fail but the traditional OEMs have Tesla beat on manufacturing quality, autonomous tech and will soon be passing them on their core advantage – batteries.

      Scale is a weapon only until others have also achieved it (absent some other durable competitive advantage). It then can turn into a curse.

      • Flea says:

        Tesla has china ,which has most of rare earth minerals to produce batteries. And of course we know he pays bribes, it’s the con game of elites. Tesla might lead for a long time ,till china knocks them out of game on pricing

  9. Ven says:

    Toyota did their research and came to conclusion that EV are not sustainable except in very large scale and efficient supply and production chain .

    All the big automakers will also come to the same conclusion after burning through lot of cash and time .

    But Tesla is still a car company , profit margins are down to 10% range from. 30%
    Ford is 4.4% , GM is 6.6% .

    GM will be the game changer when it brings 20-25k models without subsidy into market in 2025.

    GM will give Tesla run for its money and force its margin to 5% range even to zero .

    As Elon said he wants to make profits off the self driving software and doesn’t care about the profit from car sales .

    • Wolf Richter says:

      Tesla’s gross profit margin (GAAP) was 19.3% in Q1, after the price cuts! GM isn’t anywhere neat that. But that was down from the huge 29% a year ago.

      GM hasn’t reported Q1 yet, but…

      GM in Q4, made a net profit of $2.0 billion on $43 billion in revenues.

      Tesla in Q4 made a net profit of $3.7 billion on $20.2 billion in revenues.

      Do you see how much bigger Tesla’s profit margins are than GM’s? Tesla can keep cutting prices to get volume, no problem. Stockholders hate it, but that’s their problem.

      • Duke says:

        Not all stock holders hate it.
        Fund managers may hate it if they are focused on short term results.

      • JamesO says:

        just connect the dots … 29% to 19.3% to … come on let’s keep going and watch this trend in real time. if you can’t slay your competitors quickly in the race to the bottom then they will stomp all over you.

        • Wolf Richter says:

          There is one rule that I learned in business school (UT at Austin) that has been proven right every time since then: the low-cost producer wins a price fight.

          Tesla is now the low-cost producer in terms of its US and European competitors. You can see that in the profit margins. Maybe that will change someday. And that would be a good thing because then the price cutting could continue. The “race the bottom” is what this industry needs more than ever. This is a fascinating time to be watching the auto industry.

      • Coil says:

        There are only so many potential EV customers in the US, Tesla is going to eventually run up against a hard limit. At least so far the vast majority of car buyers won’t even consider an EV. Tesla will still grow, but they will be selling to repeat customers and an increasingly lower number of newbies in the EV market.

        • Duke says:

          People change. Almost all current EV buyers wouldn’t have considered them in the past.

    • El Katz says:

      At one time, Tesla’s profit was derived from energy tax credits sold to other companies…. like the old Daimler-Chrysler so D-C could continue to sell their vehicles in certain states (like CA and the 8 or so states on the East Coast of the U.S. that adopted CA emission standards). D-C (and others) couldn’t meet the CAFE standards so had to buy these credits to comply with the regulations or their compliance certificates would be revoked.

    • Toby says:

      Toyota did not do the math.
      Their decision was political. Japan decided that hydrogen is the way forward and invested heavily in hydrogen infrastructure and got the big companies (toyota..) to invest in hydrogen. And not just cars they are trying to build up a whole industry.

      Toyota is still very much a value brand and is selling in many deveoping countrys quite affordable cars. While investing heavily in h2 there wasn’t much money left over for evs. And as EVs aren’t cheap to develop Toyota decided to wait, now that the marked is more developed toyot is trying o catch up. But anyone who says toyota is “doomed” is quite stupid.

  10. Prairie Rider says:

    Tesla Model S, Model 3, Model X and Model Y are all designed by Franz von Holzhausen.

    They are not ever-changing in stylistic shape with each model year. They are not really beautiful works of automotive art. But, they are very good at their job: slip through the air to create low drag, and in turn, maximize range for energy usage.

    Nice job Franz.

    • Wolf Richter says:

      Prairie Rider,

      I think (just my taste) they’re elegant and uncluttered, sort German industrial design. The S is outright beautiful.

      Toyotas are ugly (just my taste). They need to fire their entire design team and start over.

      • MitchV says:

        Agreed. I love Toyota but their recent designs are hideous. Maybe young people like these boxy angular designs.

        Toyota pioneered hybrids, and I believe hybrids are a great solution for this decade, but sadly governments are not subsidizing hybrids like they are all-electrics.

        • Flea says:

          Your buying quality,and dependability with Toyota,dumped my VW junk .

        • bulfinch says:

          Tesla has definitely cornered the half-dissolved suppository/PedEgg body styling which appeals to a certain audience with a curiously unabating appetite for blah. The Cybertruck looks about as imaginative as taking a massive hunk of pyrite and throwing some wheels on it.

          But Telsas are not for automobile design enthusiasts; they are for nerds. (And that’s fine).

        • Dubronik says:

          I think they have employed Homer Simpson for to long

        • Apple says:

          Ferdinand Porsche, of course, built the first hybrid automobile. Back in 1899.

        • Wolf Richter says:

          Robert Anderson designed the first electric vehicle in 1832. By the 1870s, EVs become practical and competed with steam-powered vehicles. EVs have been around longer than ICE vehicles. Nothing new under the sun.

      • Captainpeacock says:

        I tell people that Toyotas look like Godzilla’s dild***. Terribly ugly…even Lexus is like a refrigerator on four wheels.

      • Coffee says:

        Yea, it seems many car companies (Kia and Hyundai in particular) forgot how to draw curves.

        Too bad, I like the look of the curvy cars made in the past several years, personified by Infinity.

      • Prairie Rider says:

        One of the oldest adages is, “Form follows function.”

        The S is that without question. It is understated. It is a fast car too.

        My 2016 M4 is not understated, and it has a drag coefficient of 0.34, which is not at all slippery. But it looks like it was meant to go fast. I like it’s somewhat stealth appearance for what it is, and during the five months it sat in my garage this winter, I’d roll its tires every few weeks (to prevent flat spots). And looking it over when I did always put a smile on my face. I don’t think the S Model would do the same.

        The newer M4 has more air intake in front, and that is needed, but it has polarizing appeal for the way it looks. A lot of BMW fans hate it.

        And speaking of Toyotas, my 10 year-old Lexus RX450h (hybrid) looks good to me for a mid-sized SUV. And I agree that the newer one’s front view is not as attractive. Since it’s Toyota, I would assume that it does have a purpose to be designed this way???

        One last comment regarding MotoGP and SuperBikes. The racers do not like the aero wings on the bikes’ noses, but they add downforce and reduce lap times. So they are here — for now. For everyday street riding, they aren’t much good unless you’re on the Autobahn. But the newest, fastest bikes have ’em. They look cluttered.

        My 2019 Hyper-naked looks fast and sleek (which it is), and I think it’s nicer looking (but not as fast or technically advanced for computer driving aids) as the new model that replaced it.

        P.S. My most beautiful machine is a Bianchi from 2020. An engineering masterpiece that is perfection to ride and to look at! It gets the most mileage, by far, of any of my wheels.

        • grimp says:

          But that bianchi green?

        • Prairie Rider says:


          Two-toned Bianchi Celeste & black. Matching Celeste handlebar tape, of course. Even have a Celeste water bottle.

          For one season, back in 1990, the team I raced for was sponsored by Bianchi. We got a new steel frame to ride, and it was very nice, but we had to return it at the end of the season. The bike I now ride is simply the best for what I do. I love it.

          “Bianchi, Since 1885.”

        • grimp says:

          Prairie Rider,

          Enjoy the ride.

          Gianni Bugno was crushing it back then, on a Bianchi I think.

      • Max Power says:

        “Project Highland” will finally fix the weird front bumper on the Model 3 (and a similar change on the Model Y) by the end of the year. I like the overall appearance of the Model 3 and Y but have always been put off by the look of the very front of the car. Seems like Tesla is recognizing this issue as well and is planning on a change.

        Hopefully they don’t do silly things like changing the steering wheel to a yoke.

        A HUD would be a really good addition to the 3/Y without taking away from the minimalist look of the cabin.

      • Toyota and Lexus are ugly. Glad you said it!

    • john stanley says:

      They are UGLY!

  11. Duke says:

    Devaluation of USD is part of the 46k average now?

    Cybertruck is still pretty cool.
    Model S is cool.

    Our model Y is very boring to me. But going 135mph in a soccer mom car is pretty cool. And driving 60 miles down a mountain and having 20 miles more range than at the top is cool. Try that ICE!

    Wolf mentions oversupply. But that is subjective and assume a certain price point. Tesla is adjusting the sales price perfectly as an econ 101 supply demand chart dictates..

    Customers can’t get vehicles instantly when they roll off the factory floor. A certain percentage will always be in transit to customers so not sure production versus deliveries is the best measure of “oversupply.”

    Tesla also has many more markets around the world to begin selling to.

    Model Y is now best selling car in Europe and USA not counting trucks.

    No mention of energy storage business which is booming.

    No mention of next vehicle to be introduced. Rumored to be refreshed model 3 or $25k smaller than 3 new vehicle.

    No mention of solar, lithium, humanoid robots, robotaxis, project dojo (said to compete with AWS which made Amazon rich), or auto insurance ..

    Opening supercharger network means tesla is taking over vehicle fueling along highways. Supposedly making a profit on electr

    Tesla disrupting much more than auto industry. There is a growth potential here way beyond valuing just their auto production.

    • Harry Houndstooth says:

      “There is a growth potential here way beyond valuing just their auto production.” Your timing is off.

      Now that Tesla is cutting prices with no significant investment in new models, it is a race to the bottom. I always thought Elon Musk’s interest in Twitter was driven by the realization that Tesla was on a path where the market would be forced to value it on a scale with other auto manufacturers. In the stock market, the sizzle is always better than the steak. If he had any interest in rescuing Tesla, he might have made a deal with Lucid or QuantumScape or another upcoming technology, but the market bubble pushed the prices too high and now it is too late. Now that Tesla has started trading profit margin for market share, expect to see Tesla trading for a single digit P/E in the next decade.

      The Cybertruck stainless steel body is repeating the same mistake DeLorean made with the 1980s DMC-12 (and Ford in 1936, 1960 and 1967)… you can’t shape it, you can’t bend it, you can’t paint it and you can’t fix it. And God forbid you get in a wreck because all of that energy absorbing function of traditional steel is gone. When Elon Musk broke the window on the unveiling, it was a message to get out.

      • Duke says:

        Stainless steel is a feature, not a bug. No paint cost. No frame cost. Easier to build. It will shock the world with best value / ability and dethrone F150.

  12. Christof says:

    A few months ago, there were potshots about how the federal subsidies and rebates were driving the prices of EVs up, but now that those subsidies increased production and competition, and prices came down, there’s little to be said about how they government programs did what they were intended to do.
    Does anyone else find that weird?
    And even if the “average american” can’t afford a Tesla, there’s some downstream effects in the used market for even those old Priuses that’s worth noting, but nobody is noting it.
    Strange, very strange.

    • Jk says:

      You’ve commingled the prices of Prius and tesla used cars and think you’ve made a point. You haven’t. It’s possible you do have a point though.

      Wait, I see. You think subsidies increased production. Ok.

  13. dearieme says:

    “the average American can no longer buy a new vehicle.”

    I’ve bought a new car only once in my life and I am now ancient. New cars are the most terrific waste of money. We bought our present car at age ten and it is now age eighteen. That’s the way to do it.

    • SnotFroth says:

      I’m 40 and I’ve bought three used cars in my life: an 82 Accord beater when I was a kid, a 2000 Civic EX manual when I got a better job, and a 2012 Civic SI when the last one kicked the bucket. No regrets.

    • BS ini says:

      Someone has to buy new to get a used car available. I have bought both. Cheap transportation is a terrific boost to USA GDP capacity. Fossil fuels are getting more expensive to produce but still in abundance. EV are terrific and I love seeing the competition. Vehicles in USA are necessary without alternatives at the moment. Rapid social change is fascinating to watch and I admire Musk for providing the venue for watching.

  14. William Smith says:

    Although I love Elon Musk for de-communisting twitter, I don’t like the level of control the company has over the cars. They even have access to the cameras inside & outside the car and can monitor the video feeds. Cars can be disabled for “wrong think” of the owners etc. People/sheep MUST wake up to the dystopian control they are handing over to faceless corporate oligarchies. People seriously interested in freedom, and that’s what the US is supposed to be about, isn’t it? must be pursuing things like open source designs etc where the consumer owns their own hardware. The encroachment is everywhere such as new PC operating systems where you need to login to the company’s servers just to access your own hardware. However, I suppose all this is falling on deaf ears while the fogs are slowly cooked.

    • Christof says:

      If you don’t want corporate overlords dictating your life with their intellectual property rights, you’re going to have to start embracing the “communists” that want the public state to make laws about how rich and powerful people can get, what rights you have as a customer, and how certain intellectual property needs to be made open sourced.
      Really gets the noggin joggin why Elon et al. might by up media companies, and then tell you they’re getting rid of all the “communists” and “biased” reporting in the name of “free speech.”

      • Gomp says:

        Old joke punch line: “Now that we know what you are, Let’s renegotiate the price.”

    • All Good Here Mate says:

      I like all the Tesla models, think they’re sharp and slick (except the goofy truck). However, to me, that is the single drawback- all the remote capabilities. Just build me the car and let me be. I’m not high up on knowing Elon’s riding with me.

    • Wolf Richter says:

      William Smith,

      People who have smartphones that they take to bed with them don’t give one iota about their car spying on their garage.

      • JimW says:

        Tesla’s stock price reflects the value of the enormous amount of data that the cars harvest and the company’s first mover advantage in the EV market and related technology development. Privacy died with the birth of the iPhone and it isn’t going to be resurrected.

        • Truth says:

          Funny how much value is ascribed to the data gathered by Teslas and the first mover advantage in autonomous. Yet they are no longer even the leader in that segment from a tech POV (just leader in taking risks at others’ expense).

          So that first mover advantage is gone.

          Promises not met at a 90%+ rate (Musk is terrible at predicting anything, indicative of someone with an IQ of perhaps 150 but who thinks he’s at the level of Goethe). He is an effective marketer, however, relying on the Dunning-Kruger effect en masse in lieu of traditional marketing… he also can’t be so stupid as to believe what he’s saying all the time, so I’ll give him credit there too.

        • MM says:

          The “value” of data for advertising purposes is another product of ZIRP, imo.

          Data is not a tangible asset and will surely reprice in the coming era as higher normal rates force asset valuations back down to earth.

        • Jk says:

          Not with that attitude it won’t, mister.

    • Harry Houndstooth says:

      I have to use a separate computer to use Open Office (free open source replica of Microsoft Office). Microsoft will block, hide, erase and destroy any Open Office (.odt) files on any internet connected computer.

      I never give Microsoft even one thin dime. They stole all of my memory on numerous small computers due to mandatory Windows updates.

  15. The Big Guy says:

    I once heard that Tesla made a lot of money selling emissions credits to companies that didn’t meet standards. I don’t follow that stuff well enough to know how true that is, but if it is/was true, is it going to continue to be true as other manufacturers get on the EV bandwagon? If so, do their profit margins equalize over time?

    • Wolf Richter says:

      Tesla’s emission credits have fallen 20% yoy. Other EV makers also get to sell those credits if they want to, and if they have any. Even if it stopped selling emission credits altogether in 2022, it would still have made more net income (GAAP) than GM and Ford combined. I posted those figures here somewhere.

  16. SoCalBeachDude says:

    Tesla’s California market share tumbles despite aggressive price cuts

    • Wolf Richter says:

      Markets share of what market?

      Tesla’s sales in California soared because of price cuts, LOL. California Model Y sales jumped 44% and Model 3 sales by 47% year-over-year in 2022. But sales of the Camry dropped by 9%.

      Tesla’s market share among all new vehicles in California soars due to price cuts. Tesla’s Model Y was the #1 bestselling model in California in 2022 (with 87,257 registrations) and the Model 3 was the #2 bestselling model (with 78,934 registrations), both beating by a wide margin the Toyota RAV4 (59,794 registrations) and the Toyota Camry (55,967 registrations).

      But Tesla is no longer the only EV seller in California. So now there is EV competition, which is good. But no other EV maker comes even close in CA, and Tesla’s beat the top two ICE vehicles.


      • Varughese says:

        Unrelated question. What will happen to US dollar once the transition from oil happens, if it’s possible. Oil is the largest traded item in market and is priced in usd. Will USD is needed that much then?

        • Wolf Richter says:

          Crude oil and petroleum products are also used in the petrochemical industry, including plastics. That demand is rising.

          Gasoline consumption has been declining in developed nations for years. That’s not new. And it will continue. But it’s a slow process and will take a long time.

          If you have a 10-year horizon, there are other things to worry about.

        • SoCalBeachDude says:

          Oil amounts o LESS THAN 5% of all global trade and has never amounted to anything more than 5% which means 95% of the goods and services for which US dollars are used to purchase has nothing to do with petroleum.

      • Dave Kunkel says:

        I live in a middle class neighborhood here in Santa Clara, Ca that is made up of 70 year old tract houses. I walk this area every morning for exercise and recently counted the electric cars in my area.

        There’s one Nissan Leaf, one VW ID4, and one Huydai Iconic 5. There are 15 Teslas – one model S and the rest are model 3’s and Y’s. One of my neighbors has 2 model 3’s – one for him and one for his wife.

        One of our daughters has a Tesla model 3 that she is very happy with.

        • Wolf Richter says:

          I live in San Francisco, and I’m surrounded by Teslas. They’re everywhere. People used to look at them. Now they’re such a common sight that no one is even looking at them anymore. Just some normal cars among a bunch of normal cars.

  17. gametv says:

    Tesla has pulled sales from many segments into one blockbuster product because they had a unique product that offered a combination of environmental benefits and features (acceleration, comfort, quiet, etc) that no other vehicle could match. And they were one of the few automakers to manage the chip shortages well. It was the perfect storm.

    Competition exists in markets like China and Europe. It is coming to North America.

    • 91B20 1stCav (AUS) says:

      Em – the question is what type of necessary highway maintenance funding will be found as gasoline sales continue to decline- EV-specific DMV fees? Utility electricity-usage surcharges/taxes? Both?

      may we all find a better day.

  18. Island Teal says:

    Toyota will buy the market when they need too. It will depend on the numbers and who is available at what price. I’m from the school that thinks any and all parts of the Musk Empire are available for the right price. Including Space X and Tesla.

    • Wolf Richter says:

      Toyota is getting its clock cleaned by Tesla in California. Toyota’s Camry has for decades been the #1 model in California. That changed in 2022:

      Tesla’s Model Y was the #1 bestselling model in California in 2022 (with 87,257 registrations) and the Model 3 was the #2 bestselling model (with 78,934 registrations), both beating by a wide margin the Toyota RAV4 (59,794 registrations) and the Toyota Camry (55,967 registrations).

      Toyota better get busy pronto coming up with a few decent EV models.

      • Stegelberg says:

        More fore the planet Ed C?
        I don’t see how destroying more nature to build close to a million new Tesla’s a year is saving the planet.

        Neither does Musk it would appear, after all he thinks we need to leave for a cold dead rock.

      • Harry Houndstooth says:

        Toyota’s new president, Koji Sato, has acknowledged that the company has fallen behind on electric vehicles and promises to catch up.

        Lower industry margins dead ahead.

  19. john stanley says:

    Problem for me is that they are all really UGLY. I can’t get past that.

    • Wolf Richter says:

      For me, they’re among the best-looking vehicles out there. Toyotas are hideous.

      • SnotFroth says:

        Yes, that Toyota/Lexus front end is why I’m not ever going to buy a Sienna van. For anyone familiar with Warhammer 40k, that lower grille makes it look like a scowling Astartes helmet.

        • Feeblemind says:

          What are the odds of a Warhammer 40k comment on wolfstreet? I guess that in the grimdarkness of the far future there is only war. And on the front end of your Toyota.

        • El Katz says:

          We nicknamed it (the Lexus grille) “Cthulhu”

  20. john stanley says:

    As Warren Buffet pointed out, the legacy car companies are burdened with enormous pension and health care expenses to the point of being noncompetitive. And when they fail the costs of these plans will fall on US Gov and ultimately taxpayers. So all of this “competition” will be at great expense to someone somewhere.

    • Wolf Richter says:

      “So all of this “competition” will be at great expense to someone somewhere.”

      Yes, stockholders.

      • john stanley says:

        And ultimately taxpayers who will be obligated for those pensions. No free lunches.

        In my humble opinion the only real solution to our problem is a reduction in population and or energy consumption.

        • El Katz says:

          “In my humble opinion the only real solution to our problem is a reduction in population”

          OK… You first! /s

        • Duke says:

          You suffer from a lack of imagination. Musi does not.

  21. gerald says:

    Tesla is killing their competition. This is only the beginning. Wait until Robo Taxi is a reality. Tesla is really a software company that also builds cars and the competition hasn’t figured that out yet.

    • El Katz says:

      Tesla only did to the auto industry what the transplants did in the 1980’s. Same song book. Different technology.

      As far as Musk goes, there’s a lot of luck in his timing. Reminds me of the old saying: “It’s better to be lucky than good”.

  22. old school says:

    It was 85 degrees here yesterday. My lady friend and I took the small 200 lb scooter out to run our errands. With 2.4 HP it carries 360 lb of people and 25 lbs of stuff at governed speed of 30 mph even up slight inclines. We had a lot fun making three stops around town. A lot of the world lives that way, but in US we a have lot of people can who drop $65K on depreciating luxury goods any sleep good at night because they are saving the planet.

    Tomorrow is to visit my parents and I will hop on the 15 HP Honda for a 35 mile trip through the country. Its really a refined machine to be so inexpensive. I like it very much. I believe I get about 120 mpg at my normal cruising speed. The EV scooters are coming, but I probably will hang up my 2 wheel lifestyle in five years or so, so no EV for me. I love the quiet sound of a single cylinder Honda putting down a country road.

    • Stegelberg says:

      Yes, effiency is not about just the output, as we all seem to believe, its the output/divided by the input, and thats the behaviour we need to reward.

      An overweight primate driving a 2.5 ton vehicle over 10km asphalt to get an icecream isnt freedom, its idiocy, no matter what energy mix it uses.

    • Gomp says:

      I love the sound of my HD Ultra. Loud pipes saves lives.

      • old school says:

        yeap I get passed by a lot of these, but I learned to ride too late anyway to feel comfortable on anything bigger than what I have. Most real bikers are very courteous when they pass. I don’t really like riding fast anyway, too much happening too fast.

      • Prairie Rider says:

        One of the things my Euro 4 Compliant motorbike does is open or close a bypass valve to the muffler. Redline is 12,500 rpm, and the torque band starts just above 3,000.

        When the rpm hits 5,000, the exhaust valve opens, and this does create more noise, and more power. But for driving around town, I’m usually well under 4,000, and fairly quiet. I do my best to limit the noise when riding in residential or urban areas. Everything is stock, and I do not want an after-market exhaust.

        A six-speed that’s geared long, at 70 mph in fifth on the freeway, the bike is just at the upper limit of being damped. But a twist of the throttle, and she opens up so fast and with such pull, it’s addictive. And the V4 sings beautifully. Tuono translated from Italian is thunder.

        The best of both worlds IMO.

  23. drifterprof says:

    I’m noticing a surge of EVs in Thailand this year. Not so many Teslas though. A lot of them I notice are manufactured in China or by Chinese companies (“Thailand Becomes Changan Auto’s First EV Production Base Outside of China”). There are some cutesy-dorky ones like the “Wuling Hong Guang Mini EV Macaron” (manufactured by SAIC-GM-Wuling since 2020). But also high end models that look slickly luxurious.

    I like the little golf cart size EVs that old people drive around in their local areas. No reason to get one now, but might be useful to have when the aging process deteriorates driving ability to the extent that I’m in a situation like “The Prisoner” (Patrick McGoohan).

    Would autonomous driving systems in electric vehicles be accepted by old people (almost always males) who refuse to stop driving (give up independence and control)? My own aging father and grandfather were obviously incompetent drivers, and scared the crap out of their passengers. But the geriatric donkeys refuse to give up the keys until pried from their rigor-mortis grasping hands.

    • medial axis says:

      The irony is if they’d have given up driving and done more walking, plus a bit of running, they’ve likely staved off the rigor mortis many years.

      As an aside, but sort of related. I sometimes wonder how many people die while driving to the gym!

    • Prairie Rider says:

      KAR 120C was a Lotus (and Caterham) Seven. It was a kit car.

      Lotus Cars is still in Norfolk, England, but they’re 51% owned by Geely in China & 49% by Etika Automotive in Malaysia.

      Lotus has the “Eletre, an All-Electric Hyper-SUV,” and the thing is fast. They also have a mid-engined supercharged Toyota V6 or an AMG turbocharged inline 4 (on the way Q1 2024) powered “Emira.” The Emira is $106k in base, and an old-school super car that would be a fun car to drive.

      The symbolism of Patrick McGoohan in his Lotus Seven was that it connotated freedom and control as he drove it alone.

      • El Katz says:

        The Lotus 7 was (and is) nothing more than a large go-kart. While fun on a track, I wouldn’t dare drive one on today’s roads unless so far out in the country that the only traffic encountered were the bugs hitting the windshield. They’re invisible to even people driving a passenger car due to their low profile… and they have exactly zero safety equipment beyond a safety harness and roll cage. Too many lunatics on the road who are self-absorbed and unaware of their surroundings because they feel compelled to read the latest tweet.

    • 91B20 1stCav (AUS) says:

      …being a geezer, meself, i still get rueful smile from this old one:

      ‘…I want to go peacefully in my sleep like my grandfather (not yelling and screaming like the people riding with him…)’.

      may we all find a better day.

  24. SWE Josh says:

    “The vehicle also qualifies for the new $3,750 federal tax credit and for some state incentives, such as the $2,000 in California.” The one thing to keep in mind with the tax credits is that there are income limits. In CA it is $200k and $300k for the federal tax credit for joint filers. Many people buying the more expensive cars (e.g. the Model X) may be over those limits. However, given that the Model 3 is 13% below the average transaction price before tax credits, hopefully many of the buyers are eligible for the tax breaks.

  25. Yancey Ward says:

    Now a base Model 3 in the US – classified as near-luxury – lists for $39,990 on Tesla’s website

    Yikes. Even with rebates and subsidies bringing that down to $34K, that is hardly a good deal for a car of that size. Indeed, comparing the options available on equivalently priced sedans all-in, it is an extremely poor deal, especially if you compare it to similarly sized hybrids.

    • Wolf Richter says:

      Hybrids are dogs when it comes to performance (we have one). Compare the 0-60 times of a Tesla to any of the cars you have in mind — base model to base model.

      • Jpjpjp says:

        Because nothing screams saving the planet like a good 0-60 time. While some people do place importance on that, it can’t/shouldn’t be the main factor. The main case for BEV is/has been it’s “environmentally friendly” nature.

        Toyota did make a case for PHEV that was very interesting. Being that lithium is a rather unpleasant commodity to mine, would producing 5-6 PHEVs that get 30-40 miles of all electric range not be better than the 1 250-400 mile BEV? Sure, some folks might take longer road trips often, but most Americans only drive 30-40 miles a day. With that in mind, battery packs in BEVs just seem like wanton consumerism disguised as environmentalism.

        • Duke says:

          Ok let me break this down. PHEV may be ideal for a brief moment in time if you do 90+% driving on EV side. There are studies showing people don’t plug it in enough actually. But you are building 2 power plants into a car that only needs one. The cost to build BEV power plant only is falling drastically every year. So who will be in a position to build the most EVs when new battery tech makes them best value proposition. iCE is dead for most applications. And if battery resources were scarce your P h e v theory of building more cars that can use electricity would be correct. But the battery shortage appears to be over. At least for Tesla and Chinese car makers.

      • dougzero says:

        You may want to check out hybrid corvette? Not a dog. Which upsets greenies. GM has shown how to use hybrid for performance, rather than conservation.
        Also F1’s are hybrid. Not dogs. Hot dogs perhaps.

        • Wolf Richter says:

          I knew someone would come up with a BS comparison: small volume Corvette hybrid and F1 hybrid against mass-produced base Tesla Model 3.

          Compare the Corvette hybrid to the Tesla S Plaid (0-60 in 2 seconds).

          Your Corvette comparison was totally out of place because we’re talking about mass-produced vehicles here that regular people buy and drive.

      • Yancey Ward says:

        A smart consumer won’t give a f*** about the 0-60 of a Model 3 vs a Camry hybrid. Now, a dumb consumer will consider it the overwhelming factor.

        You made a big deal about the average price of a new vehicle purchase in the US, but those vehicles are the big SUVs, not sedans that the Model 3 are actually competing with. The average American is priced out of the big SUVS, but they aren’t priced out Corollas, and Civics etc. For whatever reasons people are buying Teslas, it has nothing to do with the “average cost” of a new vehicle transaction. Tesla is filling a specific niche with high income car buyers- people who want to overpay for a small sedan. Let’s see Tesla compete with the Toyota Tundra or Sequoia.

        • Wolf Richter says:

          Yancey Ward,

          Model 3 competes with BMW 3 series head-on, not with the Camry. Model Y competes with SUVs.

          When the prices of the Model 3 and Model Y drop, models below them will have to drop the price, or else those buyers switch to the same-price Tesla. And so it goes down the line. You can see that because GM cut the price of its Bolt, which is below the Model 3. Other EV makers are cutting their prices. That’s how pricing dynamics work. And automakers are losing sales on their ICE vehicles because they don’t want to cut prices.

          That said… let me just repeat it here:

          In California. Toyota’s Camry has for decades been the #1 model. That changed in 2022:

          Model Y was the #1 bestselling model (with 87,257 registrations).
          Model 3 was the #2 bestselling model (with 78,934 registrations)

          Both beating by a wide margin the Toyota RAV4 (59,794 registrations) and the Toyota Camry (55,967 registrations).

    • Florian says:

      Yancey Ward,
      The deal is bad only at the first glance. Teslas have indeed somewhat of an acquisition hurdle, but once past that they are practically zero maintenance. The TCO is not bad, and the longer one keeps the car the better it gets. I’m truly relieved from not having to dole out money on oil changes and engine inspections.

  26. Yancey Ward says:

    And, let’s imagine a world, 10 years from now, when half the cars on the road are EVs. What do you suppose the price of gasoline is going to do in comparison to the price of electricity. You have to think ahead more than just a few years when trying to compare utilization costs.

      • Yancey Ward says:

        Bulls***, Wolf. If the demand for gasoline for transport fall 50%, gas won’t cost $10/gal in today’s dollars- it will be much lower, and the comparison to electrical energy will increasing favor gasoline.

        This, of course, assumes that EVS begin to take over the market. Something I don’t really concede, but I taking as a given for purposes of debate. Now, if EVs don’t take over the market then, yes, gasoline will rise in price over the next decade in today’s dollars. The success of EVs will cause their use costs to rise versus ICE engines.

        • Flea says:

          Most of rises in gasoline will be because of devalued dollars

        • Wolf Richter says:

          Bulls***, Yancey Ward 😎❤ The oil industry pays big salaries to hire the brightest brains, and so the oil companies and refiners have KNOWN about the decline of demand for gasoline for years – even I’ve been writing about it for years – and they have cut back on gas stations, and stopped building new refineries years ago. And lots of US refineries switched long ago to exporting a portion of their products, including right here in the Bay Area, because there hasn’t been enough demand in the US, and they always try to keep prices high. The industry has been preparing for lower gasoline consumption for many years. This wasn’t driven by EVs, but by the greater fuel economy of ICE vehicles. EVs are now adding momentum to the decline in gasoline consumption. The oil industry has seen that threat for many years, has fought that threat, is trying to slow down its arrival — including with all kinds of anti-EV BS that they have been spreading. They will make sure that there won’t be a gasoline glut, and so they’ll cut production, LOL. They’re working very hard to keep prices high.

  27. Yancey Ward says:

    I will be 57 in July. I probably got one more car to purchase before I die. It won’t be an EV unless their prices falls a lot, and unless we figure out how to generate all the newly needed electrical power without doubling, tripling, or quadrupling the real cost of electrical power to the consumer.

    I will want to see how the relative costs of gasoline vs kWh settles out as EVs pass the 30% of the cars on the road level. I will want to see how battery life spans turn out in real world use over the next decade. And I will want to see what state and federal governments do tax EVs for road building and maintenance.

    • Mark James says:

      There is a lot more to it than costs. If you can charge at home while you sleep, the world changes in ways you can’t imagine. It’s a lifestyle change and at least with a Tesla, a very positive one. I don’t know anyone that has owned a Tesla ever going back to ice for their daily driving.

      There are only 2 things holding back the functionality of EV’s. Charging infrastructure for multi family units, so they can charge while sleeping and towing/range for trucks and SUV’s.

      In the last year we have done 95% of our charging at home. The towing thing is a different animal, but I assume they will come up with ideas to address this. Maybe trailers that have their own batteries for seriously long hauls.

      Besides product availability, these 2 things, I believe need to be addressed to complete the transition.

    • Toby says:

      The electrical grid and power generation grew by many 100% between 1950 and 1990… The needs for 100% EVs are peanuts in comparison. Maybe a 10% expansion.

    • TheAltonRoute says:

      How well does this stuff work at low temperatures? A salesman for electric subcompact tractors was out here the other day. He said there are issues operating at temperatures at or below 15 degrees F. 10-15 degrees isn’t very cold for here in Illinois.

      • Wolf Richter says:

        We went skiing in January in the Lake Tahoe region. Parking lots of ski areas are at above 7,000 feet. It gets freaking cold up there in the winter, with snow out the wazoo this year. The parking lots were full of EVs, and lots of EVs were driving around (saw quite a few Rivian trucks too), and everyone was having a blast and no one was having the problems you imagine in your wild fantasies. Get used to it.

        • Prairie Rider says:

          How did you and the Mrs. like the new skis & gear? Inquiring minds want to know.

        • Wolf Richter says:

          Awesome. Our other stuff was worn out. So the difference was very noticeable. We meant to buy new equipment a year earlier but that was during Covid when everything was sold out.

  28. medial axis says:

    I’ve been fortunate in not having the need to own a car for the past 30 years or more, so I haven’t.

  29. Beardawg says:

    How long before Tesla builds PFVs (Passenger flying vehicles)? And….would Tesla get to lease the airspace?

    • SnotFroth says:

      Not going to happen until full autopilot is perfected and proven. People can barely be trusted with ground vehicles. Imagine 3 grand lbs of metal flying over your head at twice the speed, piloted by a drunk flyer. No thanks.

  30. RichardB says:

    Some thoughts.

    My last car was a Disco nice cars to drive but horrid running costs, the auto industry is just a huge cash drain so I don’t even have a car anymore I just use my wife’s Mini Cooper…had to change the battery on that the other week. Not only did I have to take out half the engine but due to start/stop tech the battery cost £160, I think I just got bent over and raped.

    Looked into replacing our commercial vehicles with EV models what a joke EV models are twice the cost and only do 150 miles per charge (our average journey is 400, EV’s are an utter joke)…just had the engines remapped to get rid of some of the green tech…so come on, zero incentive to buy vehicles unless you have to.

    Worked with Great Wall 3 years ago, their copy cars are a third of the price of the original, the quality was Chinese, would not have one if it was free. The industry is a utter disaster zone.

  31. cresus says:

    I’m glad to hear that maybe prices will come down for cars. Those prices are ridiculous and extremely detrimental to the average workers (who make America run).

  32. Michael Engel says:

    Forget about TSLA and the regional banks. If AAPL close Aug 15/22 2022 gap it might make a rd trip to $3T.

  33. Michael Engel says:

    In 2022 the annual vehicle production was about 80 millions. EV production is about 10 millions, about 12%.
    China 3.2 millions out of 25 millions, US 2.4 millions, Germany 1.3 millions, Korea 500K, Europe ex Germany 600K and the rest of the world about 2 millions.
    China drive on ICE.

    • Wolf Richter says:

      ICE vehicle production has plunged. EV production has soared. All automakers know that they have to develop and sell competitive EVs or else they will be obviated by them.

  34. Xaver says:

    Regarding Tesla I am curious how much demand will be there going forward. Will a low price be sufficient to compete? I have doubts but we will see it during this year.

    • Wolf Richter says:

      Second paragraph helps answer your question:

      “Tesla’s deliveries continue to surge. In Q1, global deliveries jumped by 36% year-over-year, which is a huge increase.”

      Tesla sales growth has enormous momentum.

      • Xaver says:

        This year there will be more competitors with newer models, more available chips for them and more Tesla customers disappointed with the servive. It’s possible that sellers of used Teslas influence sales of new cars. Maybe. The future is hard to tell.

    • Mark James says:

      Tesla’s are quickly becoming the value proposition for the segment they’re in. Next year the new inexpensive model will change the game again.

      They have told the industry what they are going to do, and I don’t think they believe it.

  35. Tony says:

    Physician here. I’ve driven some fancy cars over the years, including German sedans. And I also had a GMC Yukon 12 years ago. But I refuse to pay today’s premium prices. My most recent car purchase was a 2021 Camry Hybrid SE for $28K. Best value for the money I have ever spent. Excellent car. And if/when the legacy automakers lose more customers like me, they are really sunk.

  36. Flea says:

    Why aren’t railroad locomotives going electric ,because there diesel engines run generators to power them

  37. Lauren says:

    It’ll depend on the road and location. Interstates will probably be fine, especially if they’re reinforced concrete. Lots of secondary roads already can’t handle every other vehicle being a huge ICE truck so those will be toast if they have to handle a lot of EV’s on top of that.

  38. Ryan L says:

    I look forward to Aluminum/Graphene batteries being commercialized. A few companies are working on it and have promising results. One in particular is Australian company Graphene Manufacturing Group. If they can do it the entire Lithium batteries industry will be obsolete. Imho.

    • Z33 says:

      Wow, didn’t think there would be someone else here also looking forward to the Al/Graphene batteries. I would love for that to succeed and replace Li ion. Also hoping for the EV push to make the electric motors more efficient and powerful. My hopes is it allows recreational vehicles to benefit from EV tech. There is an electric wakeboat already, but 45 min runtime is abysmal. Having an ICE boat is a pain as they have to be pulled out of the water to service every 50 hours or so…no thanks to that (plus horrible fuel economy). An electric RV with full autopilot would be amazing too…

      • Ryan L says:

        If the Al+g batteries come to fruition in theory they should be able to run transport trucks, RV, boats and even propeller aircraft due to the weight savings vs other battery tech.

        I have long position on one of these companies so I guess I’m biased but it would be a game changer environmentally.

  39. Earl says:

    Well Wolf, it’s refreshing to see your opinion of Tesla has come full circle. Not long ago you thought he was a fool but you’re experience in the auto industry allows you to see the handwriting on the wall. As far as Twitter is concerned, Musk is using it to revolutionize the payment system (as well as marketing) of the world. It’s not about determining what is free speech. With the world financial system teetering on collapse, it couldn’t come at a better time.

    • Wolf Richter says:

      For years, I have been fascinated by what EVs might eventually be doing to the auto industry — and I’ve written about it occasionally. And now they’re doing it. I have given Musk credit for that for many years.

      I have pooh-poohed Tesla’s stock for years, and I still do. It’s vastly overvalued.

      But true, until maybe three or four years ago, I didn’t think that Tesla could raise as much money as it did, and scale production as much as it did, and become this big and profitable and gain this much momentum. I admire that.

      Until then, I expected Tesla to run out of money as it attempts to scale production; and that it would file for bankruptcy. And as Musk admitted, it came very close. But then Tesla raised another huge pile of money, and all problems were solved.

      You will probably have to go back to the beginnings of this site, somewhere in the 2011 and 2012 era to find an article or two that were critical of EVs’ commercial viability. I vaguely remember that I wrote one or two when Tesla was still doing the Roadster.

      • RichardB says:

        Wow 10 years and we still don’t know… Great to see people with so much knowledge of a sector following it for so long.

  40. El Katz says:

    The laments about how expensive cars have become has two sides. Back in the last decade (shortly after/during the GFC) the company I worked for built a decontented car (which means they left some features out and made the interiors less fancy, eliminating brightwork, etc.). This was NOT a low volume car, but a very mainstream vehicle with respectable volume. It was a dismal failure. The decontented concept was focus-grouped to death, with the participants agreeing that they would sacrifice amenities for low price. Product planning moved ahead.

    Customer feedback after launch was that customers and potential customers felt like they were “stepping down” (although the price increase for the new generation vehicle was zero). The end result was that the car had to be redesigned (industry parlance “refreshed”) in order to make it attractive to customers. The less expensive version (prior to refresh) had significant incentives to make them go away. The “refreshed” vehicle – at a higher price – sold well. Go figger. The cost to the auto manufacturer was tremendous ($100M+) for the refresh retooling, not counting the incentives to unload the “stripper”. What most people don’t understand is that a manufacturer doesn’t make a dime on a new vehicle until @ the third year of production. Why? R&D, tooling, government certification, blah blah blah, all have to be recouped before dollar one of profit is booked.

    This phenomena also played out in the smaller subcompact vehicles – Scion, Echo, Fit, Fiesta. Look at an original Fit and then look at the latest versions and you’ll see they went from a basic econobox to a small car with alloy wheels, satellite radio, 3 stage paint, moonroofs, and leather seats.

    Despite what people say, you have to watch what they do…. and very few people buy low priced vehicles because they’re low priced for a reason. Apparently, even frugal people have egos.

    • Prairie Rider says:

      Good points El Katz,

      I always though the Scion tC was a good car, although I’d never driven one. Toyota only sold 15 thousand of them in 2010.

      A practical little car with good mileage, decent performance and available with a 5-speed manual transmission. There were a few back in the day that I saw frequently, and one was set up to autocross and had Blizzaks for winter. Nice looking ride — to me, anyway.

      When Toyota pulled the plug on the brand seven years ago, I felt sort of bummed out in a way. Your last paragraph rings quite true.

  41. Depth Charge says:

    “And because sales stalled and then plunged, they’ve gone even more upscale to make up with dollars what they were losing with unit sales. That’s a huge problem for the industry”

    In unison, all of the big 3 CEOs have come out and boldly proclaimed – publicly celebrated – that they will happily sell fewer cars to protect their margins and continue jacking prices on their customers. It’s pure greed. I hope they all go bankrupt and disappear. It would be hilarious if they were replaced by cheaper, better companies.

  42. Bobber says:

    The city councils that expand commuter bike trails deserve the praise in my book. With E-Bikes, you can get from A to B quickly, without breaking a sweat. It’s wasteful to move a 3,000 lb vehicle down the road to buy a shirt, gallon of milk, or visit a friend.

    If trails connected everything, bicycle usage would increase 10x to 50x. We’d be chatting about the latest $3,000 E-Bike, not $50,000 vehicles.

    • Seen it all before, Bob says:

      I ride my bike to run short errands. It is not an E-Bike (yet) since it is part of my daily exercise. We don’t have enough trails so I take the side roads to avoid being run down by an EV speeding at 60MPH down the main roads. I agree with you.

      I found that you can’t efficiently shop for a weeks worth of groceries or car pool my kids and friends to their activities with an E-Bike, Call me a wimp, but I don’t bike in the rain or after dark either. I used to bike to work before WFH but had to take a shower at work so I had to leave earlier. Often in the dark during winter.

      I still use my 12 year old ICE car for most large errands. My next car will be a 50K EV since my errands are typically shorter which is the worst use for an ICE. An ICE is very useful for longer trips (For now).

      • Bobber says:

        You can haul a heck of a lot with a tricycle that has a rear basket, especially if you pull a two-wheeled baby cart for extra cargo space. That kind of rig requires some E-assist for hills.

      • Duke says:

        I bought a model Y with 279mi battery in Sunnyvale March 31st. Made in Texas! (I love the irony of buying an EV made in Texas truck country). You typically only charge to 80 or 90% of battery capacity. So that gives me a real range of low 200s. I drove at the next day 450 mi home to Southern California in the middle of nowhere. I had no range anxiety as there were 364 Tesla supercharger plugs along my route. Using a supercharger for the first time is a joy. You back up to the supercharger and plug it in. That is it! all payments happen behind the scenes through the phone app. Everything was set up for charging payments when I put a $250 deposit to buy the car on a credit card. Average time to charge on the road to gain 150 to 200 mi range was about 25 minutes. Food, bathroom, checking messages on phone meant that I never felt I was waiting around doing nothing.

  43. Seen it all before, Bob says:

    I have relatives who worked their entire lives at GM and either are collecting pensions or will be collecting pensions in the next few years.
    GM stopped offering pensions in the 1990’s (other than matching 401K contributions).

    The UAW also negotiates generous layoff benefits for downsized employees.

    These must be huge costs for the legacy automakers. Does Tesla also have these expenses?

  44. Maximus Minimus says:

    The good thing is, Tesla doesn’t do share buybacks to prop up the share price.
    The puzzling thing is, why Musk doesn’t tweet against tax credits, at least as virtue signaling. They helped him when Tesla stood alone, but eliminating them would crush competition. Not too many remember the past.

  45. Michael Engel says:

    1) The innovative EV co sales are rising exponentially from a very low level. They appeal to a different type of customers, the upscale customers, the elite and their group think imitators. TSLA the leader of the pack is selling without dealers.
    2) They are gaining market share at the expense of ICE, reaching about 12% global units.
    3) The innovative co will cannibalize each other, few will survive.
    4) The winners will have a diversified portfolio of EV, hybrid and ICE.
    5) The gov is prepare us for a world without oil. The gov is willing to spent trillion of dollars before we collapse and the winners are W. VA, W. PA and the south. Not a dime for CA.
    6) Instead of preparing us for a world without oil they should prepare us
    for a world without China. That’s how thing were for thousands of years, before Marco Polo. Arab traders connected the two worlds, silk and spices for European slaves.

  46. Jose says:

    “Now a base Model 3 in the US – classified as near-luxury – lists for $39,990 on Tesla’s website, not including rebates. That’s about 13% below the average transaction price of all new vehicles.” – Wolf

    That still not very far from the average transaction price. Tesla is still doing what other legacy automakers have done for years. Selling cars for the upscale profit margin. The majority of Teslas’ cars are above the average transaction price. I think thats enough evidence to show that Tesla does exactly what the legacy automakers have been doing for years.

    “Tesla still has the fattest profit margins among major automakers, and it can afford to cut prices to get volume.”- Wolf

    Do you have any data on this ? Don’t the legacy automakers have a much larger productive capability than Tesla ? Having much more production and therefore labor in theory would eat into your profits margin compared to smaller companies ? Doesn’t Tesla also provide other products and services that could subsidized its car price cuts ?

    • Wolf Richter says:

      To your point #1, I’ll just repeat this:

      When the prices of the Model 3 and Model Y drop, models below them will have to drop the price, or else those buyers switch to the same-price Tesla. And so it goes down the line. You can see that because GM cut the price of its Bolt, which is below the Model 3. Other EV makers are cutting their prices. That’s how pricing dynamics work. And automakers are losing sales on their ICE vehicles because they don’t want to cut prices.

      In California, Toyota’s Camry has for decades been the #1 bestselling vehicle. That changed in 2022:

      Model Y was the #1 bestselling model (with 87,257 registrations).
      Model 3 was the #2 bestselling model (with 78,934 registrations)

      Both beating by a wide margin the Toyota RAV4 (59,794 registrations) and the Toyota Camry (55,967 registrations).

      To your question #2, is there data on profit margins?

      Yes, you can just go to any financial site (such as MarketWatch) and look at the detailed annual income statements of GM, Ford, Stellantis, Toyota, etc. to get a pretty good feel for gross profits and gross margin. There are different measures, and they report some of it differently so you may have to do some math.

      For example, Tesla reports “Total GAAP gross profit margin” = 19.3% and “Operating margin” (gross margin minus operating expenses) = 11.4%. But this is across all product lines, not just automotive. However, it reports automotive revenues and automotive cost of revenues, and so you can figure automotive gross margin = 21.1%, according to my calculations. This is huge for mass-market automaker.

      So you need to make sure you compare the right one.

      With some foreign automakers, you may need to go to their websites and look at the annual reports. I’ve given some examples here in the comments.

  47. Greg P says:

    I know it is looking back a few years, but under the theme of “what might have happened if”…. it is interesting to recall that Toyota used to be strategic partners with Tesla, starting in 2010. They were working together to develop an EV version of the Rav4, and Toyota had an equity stake in Tesla prior to Tesla’s IPO. Tesla’s first production plant was a Toyota plant. Then the relationship went sour, and Toyota decided to go their own way with EV’s. In 2016 Toyota sold off its remaining stake in Tesla. As well all know, the rest is history. Toyota has bobbled its EV development, and last year they fired their CEO and announced they would be restarting EV development “from scratch”.

    • El Katz says:

      Toyota didn’t “fire” their CEO. He stepped down and is now chairman as of April 1. Don’t forget, Akio Toyoda is the grandson of the founder.

      As far as BEV’s go: “How rapidly Toyota will execute this new EV-oriented approach is unclear. Sato stressed it will “continue with an omnidirectional approach without wavering.” – which means they aren’t abandoning their hybrids, fuel cell products.

  48. Roger Davis says:

    Wolf Richter


    I’ve been a long time, almost never miss a post fan. You are (in your field of expertise) a super star. You are also, and much rarer, for an American, a Human. I say this because you are fact driven. I say this because you abhor lies and you easily and comfortable change your opinions when the facts point to truth.

    I am a Canadian, to me you are like most of my neighbours (Canadian English spelling). A Human trying to find, using their mind, morals, ethics and integrity your way in world.

    What is so striking about you is that – as one of millions of examples – you live in a country where one political party exists only to lie, only to listen to liers and those who purposefully work constantly to see that as few Humans as possible vote.

    A recent poll by Harvard CAPS/Harris says “Half of GOP voters support Trump in 2024…” Insanity, willfully ignorant and pathetic.

    America needs more of you. Keep up the good fight. Should you wish to move to Canada – I’d be delighted to welcome you!

    • Kevin says:

      In Canada we have a much, much worse leader than Trump. The guy is not even qualified to run a lemonade stand. A part-time drama teacher before he became the PM. An embarrassment and a tragedy for Canadians.

      • Bobber says:

        What are you talking about? He seems like a smooth talker, with nice hair to boot.

        He had the courage to put the shackles on younger generations, so others could thrive. Who else could have dropped huge investment opportunities and home price gains in the lap of speculators and recent immigrants?

      • The Real Tony says:

        Justin tries to please everyone at the same time. It’s almost like he’s never heard the saying “for every winner there’s a loser”. He tries to make everyone win which never works in the real world.

    • Venkarel says:

      Stop and go read the sites posting guidelines. Keep the red team/blue team out of the discussion please.

  49. Eric says:

    As someone who worked on hydrogen vehicles 22 years ago, i.e. before there was a Tesla, I am certain the economics will never make sense. Consider the Civic GXs that were on the market years ago but never really got momentum…there’s a huge infrastructure in place for natural gas, it’s generally cheaper than gasoline on a energy basis, and we have a bunch of experience handling it. Now image all of the added hurdles for hydrogen, even if all of the engineering problems of making practical hydrogen engines were solved.

    Hybrids have never been the ideal solution as one has to design two powertrains for a single vehicle. The buyer pays for a weight penalty that buys nothing cruising down the highway.

    EV’s can be astonishingly efficient compared to ICE’s. Heating the interior of an EV is a problem and impacts range because it’s extremely efficient… any gas or diesel vehicle has so much waste heat that it seems free, but it isn’t!

    It is difficult to emphasize how far ahead of the legacy manufacturers Tesla is for anyone that doesn’t understand the engineering. When Tesla started gaining traction, one of the many things that shocked me was how good the battery management system is. I had never seen anything like it.

    BTW, I’ve had many neat cars like a few Pontiac Firebirds, a Vanishing Point era Challenger RT/SE, and bunch of GMC trucks. I loved them all, but EVs make all of them pure nostalgia. To me, the fact that we actually have an option to buy functional electric cars is amazing.

    I love reading the comments when Tesla comes up for discussion, and thanks Wolf for not shutting it down before I could say something!

    • El Katz says:

      The Civic GX’s main problem was a lack of retail infrastructure to feed them. You needed to go to a commercial LNG station to fill it. Think more “truck stop” without creature comforts (toilet facilities), no attendants, no alternative forms of payment (took commercial account cards only), and no ability to buy your 32 ounce big gulp and cheezy poofs. Plus they were located more in industrial areas.

  50. Stephen says:

    Thank you fir your cogent analysis. Well said, One minor exception for me was Tesla shareholders hate this strategy. As a very minor shareholder I don’t hate it. I recall Jeff Bezos repeatedly telling shareholders he was not going to pay a dividend because at that juncture market share was more important. If your looking for dividends this is not the place to be.
    Thanks for your insight Wolf.

  51. Carlos Leiro says:

    Chinese BYD is a cat who trap the mouse.

  52. Nissanfan says:

    That’s what manufacturers should be doing from day one of this inflation cycle – cut cost. Instead, they decided to limit the inventory (Ford) and let dealers add huge markups (Ford again), while claiming that they don’t condone that practice. Glad Tesla is lowering price and hopefully forcing other automakers to work for their money finally.

    • El Katz says:

      Speaking from first-hand experience, manufacturers have no sway in dealers putting on ADM stickers. It’s illegal (nasty thing called restraint of trade). If you’ll note the acronym “MSRP”. Those letters mean “Manufacturers SUGGESTED Retail Price”. IIRC, the mouse print below, something to the effect of “dealer is free to sell at whatever price they choose”.

      If you look at the dealer offers (lease offers in particular). The mouse print discloses that “dealer participation required” – which means that not all dealers will choose to participate and, at those dealerships, the offer is null and void.

      Tesla can do what they want because they control the entire distribution network. If GM chose to drop the MSRP of a vehicle, they’d have a whole lot of stuff to work out – like re-invoicing the standing inventory to the lower dealer net. That’s usually handled by “cash back to dealer” so they don’t have to go through the whole donkey dance of pulling/replacing Monroney’s, etc., as they did in the dark ages.

  53. Wolf Richter says:

    You’re citing a tidbit that is, the way your presented it, essentially manipulative nonsense that Reuters put out there, designed apparently for the braindead.

    In CA, EV sales exploded to a share of 20% of total new vehicle sales.

    Tesla’s sales also SURGED in CA in Q1.

    But there were 40 other models now on the market, and total EV sales exploded. EVs are taking over in CA, and Tesla sales surged, but the 40 other models piled into the market and surged too from near nothing, and each one of the 40 got a little slice of the pie, but being 40, it ads up. So Tesla got a huge slice, its biggest slice ever, but the pie too got a whole lot bigger, and so Tesla’s bigger slice represented a smaller percentage of the much larger pie.

    ICE vehicle sales plunged.

    I will get the by-brand registration figures for Q1 in about a month, and it will blow your door handles off.

  54. ViewfromZug says:

    Was intrigued by the recent $2500 price increase in S and X. Included was 3 years of free charging. My take is that due to new income limits on the $7500 tax credit for high income people Tesla is hoping people will lease the S and X for 3 years (and the Tesla Leasing Trust can take the credit). The $2500 price increase covers the average charging cost over the 3 years. A back door way to encourage sales of S and X so buyers do not look at the expensive European models.

  55. Venkarel says:

    Wolf I would normally include a link to the source, in this case Rueters and the California Energy Commission (if I could find one, like you I do not trust any reporting without sources which is one thing I like about your site, sources), but I am following your own guidelines in not adding one so unless you want the entire article in quotes please do not bring up deceptive writing as that is a result of your own policy ( and I quoted enough to find the article).
    Next I have no skin in the game and my personal opinion on what we are seeing does differ from yours, but Rueter and the California Energy Commission are legitimate sources, not always accurate and politically motivated, but legitimate. How you choose to respond to their information is on you but please try not to guess how I think (you put it as deceptive and brain dead) as I provided no insite nor opinion, just a new, and relevant article.

    • Wolf Richter says:

      The complaint is that you posted an isolated context-less percentage that by itself is misleading and pushes readers to the wrong conclusion (therefore “manipulative”), and Reuters tried to make clickbait hay with it, and you fell for it.

      When you talk percentages, you need to talk context: In unit sales, how many more EVs were sold in Q1 than before, and how many Teslas were sold, compared to before. Then you can apply the percentages.

      I always say: “You can kill someone with the reckless application of percentages.” I use the example of the guy who has $1 billion and the homeless guy who has $5. If the wealth of each one rises by 100%, what happens to wealth disparity between them? Did it stay the same? Nope, it doubled. It went from $1 billion to $2 billion. Saying that “both their wealth rose by 100%, so there’s no problem,” is highly misleading and manipulative.

      • Venkarel says:

        Wolf I “did not fall for it” as you put it, nor was I responsible for the percentage as you put it, Reuters was the news service that published it, again please separate that from myself. I trusted your opinion as a response to the article and now I know I will not be joining in this conversation again as you obviously can not separate good faith from bad faith actors in this regard.

      • Venkarel says:

        I would recommend you take your own advice. Tesla articles are obviously stressful for you and you often are over the top in response, .maybe justified I do not know. For the future again I will not respond the Tesla articles as these replies just reenforces my view.

  56. Neel Kash&Kari says:

    GM won’t disclose it readily, but they are losing money on each Bolt they produce. Meanwhile in China BYD just introduced their $11500 Seagull with a range similar to the Bolt. This is going to be epic in the coming years for sure as big player have the potential to get wiped out.

    • El Katz says:

      Assuming the BYD vehicle can pass U.S. safety standards and become certified for sale in the U.S. of A.

      Keep in mind that protectionism will, again, likely rear it’s ugly head. TPTB could decide to put a 200% tariff on the BYD vehicle and it would be pretty much DOA.

    • SoCalBeachDude says:

      The ShoveRollLay Bolt is being discontinued at the end of 2023.

  57. Mojer says:

    Germany is closing its last three nuclear power plants and is now producing electricity with coal-fired power plants to make up for this lack of electricity.
    Solar panels and fields of wind turbines cannot produce constant electricity so must be coupled with gas or coal-fired power plants, the green dream is colliding with the harsh reality.

    The electric car is the scam of the century,

    • Duke says:

      “Solar and wind with battery storage are set to produce cheaper electricity than natural gas in Alberta and Ontario” – GlobeNewswire

      And while it’s not as big as the electric vehicle business, it’s growing quickly. Today, Tesla released its Q1 2023 financial results, confirming a massive 360% year-over-year growth in energy storage deployment. – Electrek

      EV’s are more efficient and more fun to drive!
      Solar and wind + battery storage is at or near parity with fossil fuels for generation.

      Bring on the clean air!!!

      • The Real Tony says:

        I short all those stocks to zero because all of them go to zero. Anything solar or wind powered I sell short.

        • Wolf Richter says:

          You’re gonna have to short most of the big power generators and electric utilities. Good luck. They’re loving it. They’re getting free fuel for the life of the plant — no matter what the price of natural gas does.

    • Expat says:

      Coal increased as a result of closing nuclear plants as per your graph. It is not clear to me what this graph shows, though. Is this nominal capacity or actual power generation. Wind and solar are wonderful when the sun is shining and the wind is blowing. Dark, calm nights mean ramping up coal and gas powered plants. And this ignores carbon inputs into solar and wind.

      I used to be anti-nuke, but now I accept that renewables are presently unable to meet demand and will not be able to in the future. Nukes are required but risky.

      • Wolf Richter says:


        Sheesh. I’ll just address a couple of items:

        Compared to 2019 (before the pandemic drop-off in power production), power generation in 2022 from coal DROPPED. And Renewables surged. Look at the chart. Don’t be side-tracked by the sharp drop in power production during the lockdown, and then the bounce afterwards. Compare 2022 to 2019!

        “It is not clear to me what this graph shows, though. Is this nominal capacity or actual power generation.”

        Read the text on the chart. What does it say???? “Production” and “power generation” and “in terawatt hours” – that’s actual amount of electricity produced and sold.

      • Expat says:

        It was not entirely clear if it was real production or production capacity. You knew it but I need clarification. Thank you for clearing it up that out so elegantly.
        Obviously Covid screws up all the numbers. Let’s see what happens going forward. Renewables are lovely, but watch coal consumption in Germany now that the last nukes are down.
        As for global coal, that is at record highs. Additionally,

  58. ru82 says:

    Luckily….energy is pretty cheap in the US when adjusted for inflation.

    -Oil is cheap. 1 gallon cost less than a starbucks cup of coffee.
    -Nat gas is at prices from 1999. No inflation in over 20 years
    -Electricity is cheap. Because nat gas is cheap and the Gov is subsidizing solar and wind.

    Food and shelter prices over the past 30 years have risen much faster than energy I would believe. I don’t have any data but just an observation.

  59. andy says:

    Tesla proved you can sell cars that don’t need maintenance, on the internet.

    Next shoe to drop will be car dealer networks.

    • El Katz says:

      Except for…. those nasty state dealer franchise laws that prohibit manufacturers from selling direct to consumer. Not all states (I think there’s 7) allow Tesla to sell DTC. The other states provided “waivers” for Tesla because no one ever thought they’d amount to anything.

      Manufacturers are attempting to set up new brands for their EV’s in an attempt to work around the laws. The think the manufacturers forget is that many auto dealers are in state politics or are friends with the people that are. Dealers generate tax revenue – lots of it. Manufacturers not so much.

  60. Nunya says:


    I’m just shocked that you left the comments section open on an EV related article. Shocked I tell you!!!

    • Wolf Richter says:

      I think I managed pretty well. But some people griped. I deleted a slew of comments to the effect that EVs will never work because yada-yada-yada, that they’re so heavy that they tear up roads and fall through bridges, that they’re not ready for prime time, that their range shrinks to 50 miles when you drive them at 160 mph, that they don’t start in the snow, that they will blow up the grid, or whatever. I mean, some of this stuff is actually funny.

      But because “EV” wasn’t in the title, it didn’t attract the horde of trolls that descend upon an article when “EV” is in the title.

  61. The Falcon says:

    My Lexus just hit 242K and going strong, thought i would take it to 300K, but even I, the King of Delayed Gratification, am seriously considering a pre-owned Tesla Model 3, which on the low end are trading below $30K in my neck of the nape, nape of the woods.

    • Duke says:

      It’s a great time to buy used Teslas. I regret buying new last month. Supply and demand flipped overnight due to tax credit remaining $7500 federal and $2009 California. Many current owners want to sell and buy new models with tax credits. So you can find people willing to sell 2018 to 2022 low mile vehicles. Make a low offer on a few and someone will bite. Facebook marketplace and craigslist.

  62. The Real Tony says:

    Where I live in Markham if one Chinese buys a Tesla they all buy a Tesla. Still not a lot of Tesla’s being sold to the Chinese they still all drive white Mercedes cars. When Tesla dropped their prices less Tesla cars sold in Markham instead of more. Canada has a luxury tax above $100,000 and most of the Chinese are “cheap” and don’t spend more than that for a new car.

  63. SpencerG says:

    It is interesting reading through the article and the comments. To a large extent I think the EV phenomena is a California solution to a California problem. For one thing, in most of the country there is not as much pressure on refineries as there is in California. The Rocky Mountains remain a large impediment to pipelines bringing in excess gasoline from elsewhere. It is not an accident that gasoline prices at Wolf’s tourist trap gas station are twice what I pay living ten miles from a refinery.

    For another thing Wolf says that in San Francisco that Teslas are so common he sees them everywhere. I live in the deepest part of the Deep South and I am not sure that I have ever laid eyes on one. Nor is there much infrastructure to support them here… the casino I work at has a few EV charging stations… but I don’t ever remember seeing anyone parked there “filling up.” I will pay specific attention the next time I pass by them.

    Perhaps the drop in Tesla prices is due to too much capacity chasing too few sales. I suppose that will be revealed in pretty short order.

    For me the EV part of the market that makes the most sense is the delivery van segment… and that is having a hard time achieving liftoff due to the same maniacs who are running the legacy car companies who would rather euthanize their existing ICE segments in favor of an EV segment that they don’t have up and running yet… the consumer be damned.

    Last but not least… it is amazing to me how much government interaction there is with the auto industry in a supposedly “free market economy.” I use my refrigerator and oven every single day without a care in the world as to what the government thinks is appropriate “best practices.” Aside from a few tweaks along the way I am not sure those companies have much interaction with the government regulators. Yet from my time in High School until now it seems like the auto industry and the government are constantly in a complicated dance… Chrysler bailout, Japanese car tariffs, Fuel Economy standards, “crunch zone” regulations, emissions standards (California and then the rest of the country) Bush/Obama bailout, Obama “Cash for Clunkers”, Biden EV subsidies. I am pretty sure that I am forgetting a few interactions along the way.

    • Wolf Richter says:

      “For one thing, in most of the country there is not as much pressure on refineries as there is in California.”

      This line is nonsense, and so your whole premise about California that builds on this is nonsense. California refineries are huge EXPORTERS of gasoline, diesel, and jet fuel mostly by tanker to Latin America, including Mexico. I’ve covered this hear many times. If California refineries didn’t export, they’d drown in gasoline, diesel, and jet fuel, and the price would collapse, which is why they export. They import crude oil and export value added products. It’s a huge business.

      Tesla started out as a California homegrown company, and so the enthusiasm was huge here for Teslas. It’s the only automaker that manufactures cars in California.

      “Perhaps the drop in Tesla prices is due to too much capacity chasing too few sales.”

      Nonsense. Tesla’s sales are up 36% year-over-year. It’s going all-out to take on the big automakers and their ICE vehicles. Tesla made more net profit in Q1 than GM did!!! It can afford to cut prices. It’s going totally mass-market. It’s eating everyone’s lunch.

      • SpencerG says:

        You don’t have to believe me Wolf… the EIA publishes a chart showing Refinery Utilization and Capacity by region. PADD 5 (West Coast) is down by 9% since 2017. The only other region that is worse is PADD1 (East Coast) which is down 31%… and which does NOT have California’s foreign gasoline sales… sales that only became LEGAL starting in late 2015.

        PADDs 2-4 barely budged in those five years.

        Once you get outside of the high density coastal communities that have political pressure on their refinery operations, I don’t know that EVs hold as much interest to the average consumer in the rest of the country. I suspect those people see Teslas the way that they did the Segway… something that they wouldn’t mind taking for the occasional spin… but hardly the “transportation revolution” that its advocates proclaimed it to be.

  64. Duke says:

    Even if one were to make a detailed argument that Teslas are not “green” production wise(which I don’t see), they do clean up metropolitan air quality. And the batteries since 2022 are 100% recycled by Tesla and Redwood Materials. Plenty of ICE trucks are driving around not hauling shit either. Teslas next vehicle will be a smaller or cheaper model 3 type car for the masses. Tesla semi is already on the road replacing short haul distribution trucks for Pepsi. The drivers LOVE them! And we all love the cleaner air. Bad air quality in city skills people know?

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