The infinite wisdom of the US legacy automakers never ceases to astound.
By Wolf Richter for WOLF STREET.
Ford today gave another signal in a series of signals – it’s planning to cut production of its F-150 Lightning by half in 2024 to just 1,600 trucks a week – that proves the point: Two years ago, Ford, GM, and FCA (owned by Stellantis) were 10 years behind Tesla. Today, they’re 14 years behind, and they’re in the process of throwing in the towel. Every executive from the CEO on down three levels should be fired on the spot. I’m furious. I have been waiting for years for the legacy automakers to put the heat on Tesla to knock it off its high horse.
But no. Instead of focusing on designing competitive EVs – cost-competitive EVs – and to build the supply chains needed to produce them, GM announced $10 billion in share buybacks two weeks ago, and Ford $5 billion in share buybacks, to kowtow to Wall Street and keep their shares from plunging further. The CEOs should be fired on the spot, or did I already say that?
Meanwhile, Tesla’s Model Y has become the #2 bestselling model in the US in 2023 through Q3, with a market share of 2.5% of all new light vehicles sold, according to registration data provided by Experian, only half a percentage point behind the #1 bestseller, the Ford F-150 internal-combustion-engine (ICE) version, with a share of 3.0%. With this growth rate, the Model Y is threatening to take the #1 spot from Ford’s ICE F-150 in a year or two, which would be a catastrophe for Ford.
In California, Tesla was the #2 automaker by registrations in Q3, behind Toyota, and far ahead of the other Japanese brands. The US legacy automakers are even further behind. The Model Y is the #1 bestseller by a wide margin in the state, and the Model 3 is the #2 bestsellers. And Rivian is surging up from nowhere.
Tesla’s deliveries jumped by 26% year-over-year globally in Q3, Rivian’s deliveries by 136%; and Polestar’s by 50%. The latter two are startups struggling to ramp up production. Rivian confirmed in its Q3 earnings call that it will likely hit its production guidance of 52,000 vehicles in 2023. There is no slowdown of demand in sight.
Rivian is threatening to outsell Ford’s combined EVs in 2024. Ford sold 20,365 F-150 Lightning this year through November, and 35,908 Mustang Mach-E, which are piling up on dealer lots. Including the retrofit E-Transit, Ford sold 62,460 EVs over the past 11 months. Ford is cutting production plans for 2024, while Rivian is furiously ramping up production.
In terms of their stocks: Rivian has long been seated in my pantheon of Imploded Stocks, and Tesla made it into my pantheon of Imploded Stocks a year ago – meaning shares plunged by 70% or more from their highs – but it has gotten back out of it this year. Rivian’s shares today are down 89% from their highs. Tesla’s shares are down only 43% and are still ridiculously overvalued. So the shares are not for me. Nor are the US legacy automakers; I have no idea why anyone buys their shares – maybe people chasing after the dividend yield that is now nearly as high as the yield of Treasury bills.
Tesla is highly profitable even after the price cuts – the old business axiom applies: the low-cost producer wins. And the startups Rivian, Polestar, et al. are supposed to lose a ton of money until production reaches certain levels, just like Tesla did.
Tesla’s price cuts x’ed out Ford’s strategy of selling overpriced so-so EVs. Now it needs to go back to the drawing board, designing more competitive EVs that can be produced at a lower cost so that they can be sold profitably at volume at a lower price. With its current models, it cannot cut the price enough because it’s already losing a ton of money on each EV it sells.
But instead, it decided to blow $5 billion on share buybacks to keep its shares from tanking further. Fire the whole executive team, or did I already mention that?
The average transaction price of all new vehicles is about $47,000 now. It’s outrageously expensive. And the price cuts that Tesla implemented are a breath of fresh air in this environment of constant price increases. Americans have gotten ripped off by the automakers for years.
FCA doesn’t have any EVs on the US market, just announcements.
GM has the old Bolt and Bolt EUV which sold well this year after the price cuts – a base Bolt goes for less than $27,000 before tax credits, or for about $20,000 after federal tax credits – turning 2023 into a record year for the models, with 50,000 deliveries through Q3.
But earlier this year, GM announced that it would kill the Bolt and Bolt EUV by the end of 2023, and that it would be the end of the Bolt. GM has no other EV in mass-production. It just has announcements in mass-production – and share buybacks. Then in July, it flipflopped; it wouldn’t be the end of the Bolt after all, there would be a new Bolt in the future, based on its Ultium platform, but until its whenever-arrival day, there would be no Bolt at all, and GM will just abandon this lower-priced EV segment to whoever wants it.
Tesla wants it, and now it’s working on a sub-$30,000 EV.
Tesla has another huge strategic advantage: It doesn’t spend money on advertising in the US, while the legacy automakers have to spend billions of dollars every year to push their ICE models and EVs, in addition to the billions they blow on share buybacks. The first Cybertrucks were just delivered, and the pictures and videos and articles were everywhere; and even the Wall Street Journal, which years ago has turned into a prime anti-EV rag, wrote about the Cybertruck, though its reporters weren’t even invited to the Cybertruck Delivery Event.
It doesn’t matter what you or I think about the Cybertruck; the crucial thing is that everyone has known about it for years, and people have been talking about it for years, and it has been all over the internet and the media, and Tesla never paid a dime to get this publicity – that’s a huge strategic advantage.
And Tesla doesn’t waste money buying back its own shares either.
And Tesla has another huge strategic advantage: it doesn’t have franchised dealers staffed by salespeople that don’t feel like selling EVs and actively torpedo EV sales in favor of ICE vehicle sales. And Tesla doesn’t have all the costs associated with running this network of potentially unwilling middlemen that all want to make their own profits and mess with the pricing.
Franchised dealers are protected by state franchise laws from automakers trying to sell directly to consumers. But Tesla was able to get exemptions in many states back when it was still a no-nothing, and when franchised dealers, who are a powerful lobby at the state level, still knew that EVs would never work and would never amount to anything, and that Tesla would never be a threat.
Ford blew a huge amount of money on promoting its Lightning before the first one rolled off the assembly line in April 2022, and then it continued to blow money promoting it, and there have been anecdotal stories of customers at dealerships being steered from EVs to ICE vehicles, and now it has to cut production plans in half, while Rivian is ramping up production in leaps and bounds, and while Tesla…. well, the Cybertruck will be a spectacle we’re going to watch, that’s for sure.
Ford is uniquely dependent on its F-series ICE trucks. It makes obscene profit margins on them, and anything that eats into sales of these trucks is going to be a big problem for Ford. There are four legacy automakers in the US that make full-sized pickup trucks, and their outrageous pricing is marked by oligopolistic behavior. So they set themselves up for disruption.
Tesla has another huge strategic advantage: It designed, built, and owns its own charging network, payment method, and app to work with its own vehicles, and the system is widespread and works.
So Ford and GM had to make deals with Tesla so that their customers will be able to use Tesla’s well-functioning network of Superchargers, because they didn’t build out their own networks, and because the third-party infrastructure they’re using is terrible and unreliable and deters buyers of their product. With EV charging, America is divided into two parts: Tesla’s network and everything else.
Maybe the US legacy automakers should just stick to making and selling overpriced ICE trucks and SUVs; maybe they should just abandon the EV market like they abandoned the sedan market, and instead keep borrowing billions to buy back their own shares, and watch their sales and market share go to heck, that’s something they’ve already gotten good at over the years.
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Just gonna admit here that I bought 10 shares of Ford awhile ago. Just for the laughs. I get $1.50 every three months or so. (If I remember right.)
So now you know at least one person that has bought Ford stock in the last year. :)
Yes – I share your frustration at the stupidity of American business leaders.
Ford, GM and Stellantis are Profit Maximizers. Tesla is an Empire Builder. When an Empire Builder goes up against a Profit Maximizer, the Empire Builder *always* wins. (Read that in a Lester Thurow book years ago.)
Good thing Tesla hasn’t benefitted from huge subsidies and other gov’t inspired financial benes along the way!
It’s all about “purist” market competition!
Did they completely collapse and require government ownership, then go right back to poor business practices that left them vulnerable to collapse in the first place?
Don’t get me wrong Musk is an egotistical @sshat, and you have to try very hard to like him. But at least the company is thriving and showing that free-market competition in America is not healthy and that consumers are getting screwed.
A lot more going on behind the scenes. Aside from massive gov’t (and corporate) manipulation of markets there are ramifications elsewhere: such as with SpaceX.
We do live in interesting times. Goldman Sachs (and JPM), for example, can manipulate the **** out of everything for decades on end – and we get to foot the bill! The pricing mechanism has been co-opted….and everything else that goes along with that.
Ok…enough spitballing from me. Point being I don’t place much credence in any data ( apologies in advance Wolf) as a purveyor of ground truth. There’s just too much economic white noise!
Free market competition in America and China*
Also, Ford did not take the bailout.
Didn’t Tesla sell a boat load of “carbon offset credits”?
Ford did receive $5.9 billion in low cost Federal loans + if their suppliers had shutdown they’d been out of business as well.
Every US automaker has access to the same incentives and subsidies. And they’re getting them too. There is nothing about them that is Tesla specific.
That said, EV incentives are bad policy. EVs can and should stand on their own 4 wheels.
BTW, Teslas are the vehicles with the most US-content sold in the US.
General comment on the article. I think you are over reacting Wolf due to your location in CA. Overall, for the 3rd quarter, less than 8% of US vehicle sales were EVs. Lower than that outside of CA where the climate is less favorable, i.e. too cold or too hot for good battery life. I look at Toyota with their hybrid lineup as the model for the transition, not EVs. There are such huge issues for EVs with the grid, charging stations, and folks that have to park in the street or lot, that they are simply not practical. The Domestic makers need to be ready to ramp up when the time comes sometime in the future that these other issues are cleared out of the way and mass adoption can occur. They can afford to ramp slower since they make IC cars. Until then they are a money pit for auto makers, except Tesla.
Jim,
…you are over reacting Wolf due to your location in CA. Overall, for the 3rd quarter, less than 8% of US vehicle sales were EVs..”
You’re underreacting.
In 2023, 1.1 million EVs will be sold, and 14.4 million ICE vehicles.
ICE vehicle sales plunged from 17 million in 2019 to 14.4 million in 2023.
EV sales soared by nearly 400% from around 220,000 in 2019 to 1.1 million in 2023.
This is HUGE. If the legacy automakers cannot figure this out pronto, they’re in deep trouble.
The rest of your comment is standard-issue anti-EV-troll BS that I would normally just trash because you’re abusing my site to spread it. But I needed to make the point of volume sales.
“what that asteroid over there in the sky? Sure it’s now brighter than the stars, but it’s still so far away, no need for alarm. Carry on as usual folks.”
–T Rex before getting wiped out by the asteroid
How to say “I know nothing about the history and present of Tesla, and their relationship with the US and Chinese governments”
The playing field isn’t level, but it’s not tilted the way you think it is. Remember that the US government spent $757bn in fossil fuel subsidies on 2022 alone.
Good point
Now let’s correct some false numbers in this report
For the first three quarters if 2023, Toyota sold 303,000 RAV4’s and Tesla sold 285,000 Model Y’s. The RAV 4 was # 2 and the Model Y was #3, NOT #2.
The claim that US sales of electric vehicles soared m+56.7% in 2023 is misleading.
Total US plug in vehicle sales, which include some hybrids, are expected to exceed 9.0% of US sales in 2023 versus 7.2% in 2022, up +25% to 30%
Plug in hybrids (PHEVs) typically have a battery range from 20 to 40 miles. That covers most drives for most people. So PHEVS should be counted as electric vehicles.
About 1.0 million BEVs + PHEVs sold in 2022 versus an expected 1.3 million in 2023
I give them free money, and they use it to buyback shares to benefit the investors. You only lose if you are consumer who is not a shareholder.
If you are a shareholder, you benefit from higher share prices that you can use to buy overpriced ICE vehicles.
And the Krugmanites loudly applaud. The economic statistics do not lie: printing money makes the pig very pretty.
For once, I couldnt agree with Wolf more. First the domestic automakers conceded the passenger car market in order to maximize profits on big trucks. Now they are conceding the future of transport – EVs.
Toyota has said it has battery tech that will enable a 700 mile range, 10 minute charge to 80% and will lower vehicle weight and reduce prices… by 2027. Toyota rarely oversells their tech.
Toyota wont be alone, the Chinese battery makers will have similar solid state battery tech this decade. Once those specs are attainable at prices equal or less than ICE cars, it will be very difficult to sell large quantities of ICE cars. They will be a small niche.
So GM and Ford are putting themselves out of business. Just crazy. The future automotive industry in the US will be dominated by foreign cars and Tesla only.
Brilliant, just brilliant!
They should go out of business but what would you like to bet that they all go crying for bailouts after they go bankrupt? Screw them! US airlines are another cabal that should go bankrupt! I always fly on foreign carriers when I can. To hell with US mediocrity!
Toyota’s solid state battery always seems to be about 4 years away. They haven’t even built a single car yet.
They will use a solid state battery for a Bluetooth speaker they are installing on tacomas next year 🤷♂️
This has got to be your angriest writing ever!
Maybe. The legacy automakers — esp. Ford since I had to deal with it — have aroused my anger decades. But this is now getting pretty serious.
I predict Ford will be filing for bankruptcy and require a taxpayer bailout.
Duratec engines with internal water pumps hooked up to the timing chain – brilliant!
Solyndra 2.0
Kinda like a child who just won’t listen to the experience wisened parent? Weird kinda role reversal – but I get it.
I wonder what the cost and profit margins are on EVs. Seems like they would be tremendously cheaper to produce yet they’re not significantly cheaper at the low end market than ICE. I’ve been told by a few Tesla owners the tech and all is fantastic but the fit and finish of Tesla’s leave a lot to ve desired. Never been in one personally.
An electric motor or two and a big battery to replace all the hundreds of parts required in an ICE has got to be a good cost savings. Especially if batteries and motors can be cross platform compatible.
Maybe the legacy auto makers are lagging behind because they think they can squeeze out as much money on the EVs and they can their legacy products at the end sales price. Or they might just be stuck in the past thinking EVs are still some 100 year old kooky idea.
…why seriously consider and/or invest in constant R&D and SWOT-analyses of your core product when lovely profits are extracted (at least for awhile) simply by giving your existing products a minimum of global attention and a lick of new paint and styling, favoring the entitled mindset of financial ‘engineering’, instead?
an even-more excellent article than your excellent norm, Wolf. Thank you!
may we all find a better day.
It’s all just so screwed up for almost every reason. The whole industry has been thwarting EV’s for decades as part of being in bed with fossil fuels destroying the world. We should have and could have had something like a Tesla 20 or more years ago with the exception of the self driving which can be debated is a good idea or not but not strictly necessary.
We should have had something like a Tesla that can last a million miles without much issue other than the electronics for about $15K by now. If we were serious about being responsible the avg fuel economy should be 100mpg by now … or 10-20 years ago.
Instead the industry has been keeping oil alive to the destruction of us all and at the same time building cars that are absurdly heavy, overpowered and complicated instead of smart and reliable transportation at a reasonable cost.
I wish a company had come along and started making the equivalent of a 1990’s-2000’s Honda Accord with no electronics that gets 100 mpg or an electric one for $15K that lasts forever with little maintenance….that’s what people need and would have been responsible resource wise. Of course our system is just totally corrupt and almost all decisions come down to bought off corporate interests and big oil and it’s literally killing us. We need to end our government being for corporations instead of reflecting what the people want and is in their best interests.
“ …why seriously consider and/or invest in constant R&D and SWOT-analyses of your core product when lovely profits are extracted (at least for awhile) simply by giving your existing products a minimum of global attention and a lick of new paint and styling, favoring the entitled mindset of financial ‘engineering’, instead?”
…aka, private equity…
Wolf,
I don’t think the so called big three have any idea who they are up against with Tesla. Ford vs. Ferrari is a good example of corporate culture in the U.S. Most executives are looking to move up the ladder at all costs. In the film Ford succeeds, but one of the men that brought them there is stabbed in the back.
The big three are assemblers from their suppliers such as Magna. This is known as outsourcing risk. None of the executives want to put their neck on the line for a revolutionary product that might fail. They are not rewarded for independent thinking, but for covering their buts while outside consultants take the risk.
Tesla is much more of a vertically integrated company with many talented engineers willing to take those risks.
Like I said, they have no idea what they are up against.
I do agree with you on this one. Hopefully not too much word salad.
I think you nailed it. Another factor that seems to me to be broadly true for most companies… size and innovation are enemies. Big companies don’t innovate well. The incentives are wrong. The managers are too comfy. The bean counters run the show. And the engineers are told to shut up and go hang out in their nerdery to peck away at the next small product tweak. Innovation is for hungry companies who have a taste of a market and want a whole lot more. For profitable incumbents and their overpaid managers, innovation mostly just feels like a good way to get fired.
Tesla was a startup and had that mentality. Also no historical luggage. The vertical integration matters less compared to that.
Further there is the risk vs reward problem. Switching from ICE to EV means cannibalizing an existing, profitable, product to sell a new unproven product. Steve Jobs was seen as a genius since he dared to take that risk when he stuffed the iPod in a coffin to integrate the music player functionality into a phone.
Correct, cannibalization is a huge problem for legacy automakers. Pure EV players like Tesla or Rivian, when they build another EV factory, invest in growth. The legacy automakers, when they build an EV factory, invest in trying to prevent the their sales from dropping as their customers switch from ICE to EVs. For them, investing in EVs won’t mean growth, but just staying alive.
The US market is a zero-sum game. The total number of vehicles sold peaked in 2000 and then again in 2016, and has dropped since then. Every EV sold = 1 ICE not sold. There is no growth in the overall market.
Wolf,
This is a visceral love/hate letter to Ford, GM, and whatever is left of Chryco that I fully sympathize with.
I am as close as you can get to a Ford Family guy, while also rooting for GM and sometimes Mopar, but it has been SOOO frustrating trying to root for the legacy domestic manufacturers lately (and by that, I mean the last 50 years).
5 second max power time limiters because your electric power conditioning components are under-designed despite being 2-3 years late to the party (looking at you Mach-E)!?!?
Making a Fugly electric version of an economy sub compact (Bolt) that does not play to EV strengths and is basically just a worse version of a gas car…that famously has recall after recall…and don’t get me started on the EUV version. This is obviously self-sabatoge or they really are that bad…I can’t figure it out.
As for what is now known as Stellantis, they gave up on their popular Hemi line a decade and a half ago (last mass market update was the ‘eagle’ version with VCT, etc. in 2009), and now supposedly everything is going to be EV. LOL, yeah right.
These companies deserve to be eaten alive by Tesla, Toyota, et al.
The capitulation on the development/investment front and the share buy backs are the ultimate nail in the coffin.
These companies don’t hire/promote/respect enthusiasts or engineers…MBAs only….and for that, I am rooting for their demise!
Indeed they don’t hire enthusiasts or engineers.
And this isn’t a new problem. Back in the 1970s, when I was a young pup studying economics at the University of Michigan, I noticed that my engineering classmates were steering very clear of the auto industry.
Enthusiasts? Well, let’s say that the enthusiasts I knew were tinkering with Volvos, Datsuns, and VWs. American cars? Nope. Uh-uh. No way.
Jeff, your last sentence caught my eye and reminded me of the demise of Rocketdyne (division of Rockwell at the time) beginning in the late 1980’s. As a significant machined-components supplier, we watched as the engineering team that built the company – and designed the storied F-1 and RS-25 engines among others – were systematically replaced by what we referred to as “bean counters” and the whole organization slowly imploded. It’s sad to see that these lessons remain unlearned to this day.
Growing up, I lived about 15 miles from the Rocketdyne facility in the Simi Hills. I could frequently hear them testing out rocket engines. That was in the late 60s to early 70s. I’m guessing your company was in Canoga Park?
It was in Chatsworth.
I have a 2023 Bolt EUV, like 50,000+ other people will by the end of the year. Nice machine and suits my retired needs. It’s been dead on reliable and is fun to drive. If GM was to build 200,000 of these at the price point of ~$30 K, they would sell every one. Mine even came with its own battery charger, something Tesla makes you buy separately.
And GM put the 240 volt power line into my garage for me saving me at least $1,500.
GM is really two companies, the greedy exec’s and the design/production/assembly people who are there to make a living.
Wolf, this is not all about EV vs. ICE.
I would pay $50,000 for a Toyota-made new 2011 Mercury Grand Marquis. No video game i-phone dashboards, please.
@Shiloh1,
“I would pay $50,000 for a Toyota-made new 2011 Mercury Grand Marquis. No video game i-phone dashboards, please.”
You and me both. This is a car that Ford did a good job on. If taken care of they can go 300,000 miles. (Grand Marquis, Town Car, Crown Vic).
300,000 mi is really xclnt. Those really were the epitome of a fine traditional sedan.
I had a cybertruck on order, but I wont pay the current announced price. Instead, I am spending my $ on full rebuilds of both my older diesel pickups. I should get a total of 350,000 mi, maybe more, for my money.
At my age, 72, 350,000 miles should last me a lifetime. And I can haul my vacation trailer with either one.
I like the idea of electric autos, but lots of stuff can be rebuilt cheaper. No one seems to have alot of spare $ lately and I have to conserve cash for my eventual long decline.
I suspect there are alot of aging boomers in the economy just like me.
Ccat
In Europe they are changing the model so dealers only take part in after sales services or used car sales.
They want to get rid of them , there is no use for them in sales meaning car sales has changed a lot.
And there is tons of agreements and technology and many many useless software just to deal with dealers.
They have created an enormous net of dealers and now they want to get rid of them.
If the numbers keep going this way they will probably replace them by an automated process.
Dealers are focusing in after sales more than ever. Also in renting and used sales car.
Funny thing to work in the techie side of both sides and see how they hate each other 😂
From the U.S. perspective, the factory vs. dealer relationship is stressed because factory / dealer interfacing individuals are jealous of the success of the dealers from an income perspective. They see the “greedy” dealers (who have coincidentally invested a chunk of money in their operations at the behest of the factory) making bank and they’re earning $29.9 and a company car.
The dealers hate the factory for multiple reasons: One is the onerous requirements placed on them (do you think it’s the dealer’s idea to build those mausoleums with the marble floors and the faux stucco exteriors in the manufacturer’s “image”?), sales programs designed to pit dealer against dealer (known in the industry as “stair-step” programs) that erode profits and create the carnival environment that customers hate? Then there’s the required programs (buying garbage showroom displays – think interior selectors, touch screens point of sale materials, etc., – that are so absurdly overpriced it would make your head spin). In addition, the dealers view the factory as a pseudo government….. we used to joke with dealers we knew by saying “I’m from the factory and I’m here to help you” when we would visit their stores – which was the equivalent of the Ronald Reagan quote re: the U.S. Feral Government.
The factories see the profitability of Tesla achieved without dealers and want to emulate the business model. The main problem with that is that companies like GM and Ford have zero entrepreneurial skills… they’re corporate zombies and behave as such. If you knew the layers upon layers of approvals required for common sense changes in a vehicle at the factory level it would make you cringe. The non-productive PowerPoint presentations created that are nothing more than a time-suck and the legions of people who believe having meetings is “work”…. and they schedule them out the wazoo so there’s little time left to produce anything of value. Watching the bobble heads sitting in there agreeing with any blather that fell out of the big cheese’s mouth was amusing. Made “Office Space” appear like a melodrama.
I lived it. I finally had enough when the “leadership” came up with a presentation style (developed by the ass kissing execs at the behest of the CEO who was a tool – that clown carried multiple Montblanc pens with different colored inks that he’d lay out on the table like a surgeon arranges scalpels) that took more time to prepare than it was worth. Meaningless charts, graphs, pages of useless data that was once discussed off a single 8×10 piece of paper and easily comprehended from a 10 line / two column spreadsheet. I can honestly say I haven’t viewed a PowerPoint since I walked out of that building in October 2017…. and tune out any videos that include such drivel because I seriously think that viewing those presentations cause severe brain damage.
If you want to understand how ham handed the factory people are, see if you can find any articles on the “success” (not) of the “Luxury Collection” or some such pithy moniker located in Salt Lake City, UT. This was a misadventure of FoMoCo into the retail arena during the 1990’s where they bought a multi franchise dealer group and were going to run it themselves. They lost their a$$es and ended up selling it back to the original owner for pennies on the dollar.
Tesla is successful with this model because of Musk’s eff U attitude…. Boneheads like Barra / Farley couldn’t be trusted to carry his briefcase without the risk of losing it.
Correct 100% Been there done that. Corporate bloated overpaid useless management. Talking about former Chrysler name. Now Stelantis. What a joke of a company. Eh well… hope next time they will disappear in the dust. 3rd time is the charm. Dealers are just like the IRS, charge you to death and beyond. What wonderful world we are in.😈☠
And all that despite the many problems Tesla faces, with so many stories of people waiting months for parts, a lot of unnessesary quality problems right out of the gate…. 70% of new Teslas have at least one service center visit in the first month.
And the cybertruck… that monstrocity is neither cheap nor easy to manufacture. They’ve manged to get 10 to insiders. I think the production ramp up will go quite slowly. Maybe not as slow as the Tesla semi which, despite an “delivery event”, hasn’t been delivered once. Basically still prototype testing.
Tesla is paying for advertising just not a lot. And the same is true for their RnD department. With miniscule inverstments to prop up their financial data, Tesla has no product in the pipeline. The sub 30k car is at least 4 years away. Any advantage Tesla had with batteries due to their close cooperation with Panasonic is basically gone. Teslas own battery , the 4680 is a dud, and the leaders right now are CATL, BYD and after that LG. For their top models as well as their cheaper models Tesla buys batteries. Their own is a hughe investment that didn’t pay off. Just like Dojo or the solar shingles. Or FSD. Well that payied off alright. even though it doesn’t work.
I’m sure you’re saying something, I just can’t figure out what.
56% of US adults cannot read above a 6th grade level(12years old)
Lol!!!
I take offense, I would say I read at the 10th grade level.
I wonder, how much those legacy automakers are spending on anti-EV lobbying. And how they measure the effectiveness of that.
There have been several articles this past week (in Canada) on consumers cooling towards EV purchases and ownership. Plus, articles on increasing maintenance costs of EV and Hybrids as compared to ICE. Especially scathing re Hybrids EXCEPT for Toyota Prius. Especially singled out was Hyundai. One Toronto customer had a battery calve about 5K Km past warranty expiration and was quoted above $50,000.00 for battery replacement. Another Hyundai owner in Vancouver went to Consumer Matters on local Global TV stations and pressured Hyundai Canada to back down on a $29,000 dollar maintenance charge.
If you don’t believe this do a search. I am not making this up.
A national maintenance survey was also done that stated maintenance costs, overall, were higher for EV and especially higher for hybrids (except for Prius) as opposed to ICE. Insiders argue it is just a case of growing pains and new tech to explain why fewer moving parts costs more to run and service. The lack of adequate charging stations has been a nightmare for travelers. Commuters can set up a home charging stations for overnight plug ins, but unless you are an electrician and have adequate line in service, plus room on your panel, upgrading service can be very very expensive. I have yet to see charging options at new apartment buids. In fact, in Victoria the latest trends are new apartment and condo complexes with no parking, whatsoever.
Here, where our distances are great and winter weather cold, EVs will most likely fill a niche urban commuter or seldom drive market. Me? I bought a brand spanking new Nissan Frontier PU last year as I needed 4X4 for work and utility. I love the truck and the efficiency, but hate the electronics even though I stipulated base bling options. When I want to use a trailer I have to cycle through menus to disable the automatic braking feature to keep from getting whiplash….every time I start up as it defaults at shut off. Had to get the dealership to nix the stick shaker feature for for road center lines. Here’s hoping manufacturers will simply make a newer version of simple and efficient transportation. This would require light weight materials, non rusting aluminum panels and structure, maybe carbon fibre, all powered by lower hp ICE. 100 mpg is the dream, but 75 mpg (Imperial) certainly possible.
EVs sales are NOT cooling. That assertion is BS. I gave you the sales numbers of the EV makers for Q3, so look at them. Those sales numbers shoot down your BS assertion. The US legacy automakers are failing with EVs, though, and that’s what this article is about. So read the article, would be helpful.
@Wolf, Paul didn’t say “EV sales are cooling”, he said “consumers cooling towards EV purchases and ownership’
I drove my daughter to a tennis tournament in Portola Valley this weekend and I parked in a small lot (with about a dozen Teslas). I was wearing a Porsche baseball hat and sitting at a table alone trying to catch up on emails and had a few people ask me if I owned he 997 in the parking lot with the top down.
I responded each time with “is that your Tesla in the parking lot” with a laugh since close to half the cars were Teslas and had some brief conversations with a few people I had never met before.
As a lifelong car guy who rarely goes a day without talking cars with people (when I drive the D90 with the top off in Tahoe someone askes about it almost every time I stop) I can tell you consumers are “cooling” to electric vehicles as more people have close friends that own them and they realize that an EV may be the ideal “commuter” car, but may not be the best vehicle to replace their family minivan or SUV.
Cute story but the cooling part is just total BS. You have no idea. You cannot get “consumers are cooling” from a few cherry-picked personal misconstrued observations. It’s anti-EV-BS, is all this is.
@ApartmentInvestor, @Paul S
Perspectives! I have owned a Tesla Model 3 LR since Dec. 2019. I live in what you both likely believe to be a flyover frosty place known as Northern Illinois. I have replaced the tires twice. Thats it. We travel regionally often, in all seasons, and have traveled as far as Denver round trip in this car. I have never encountered a non-working Tesla supercharger. I have never found myself to be too far from one. I charge more than 90% of the time at home. I know several other owners in this area with similar experiences.
These reports rarely refer to Tesla or Tesla owner’s real-life experiences. Do yourself a favor, rent a Tesla, or test drive one.
@Wolf & @TooktheBait: I’m a big fan of EVs and if I had a regular “commute” like most people I would own a dual motor Model 3 (that would outrun BMW M3s and M4s for half the cost). Living in the Bay Area I know a LOT of people with EVs that love them and all I am saying is for me I am feeling that demand is “cooling” (going from “most” people saying they will get an EV next to “less than most” people saying they will get an EV next (along with quite a few that have said they won’t replace a current EV with another EV). It is not just me Google “consumers cooling on evs” and you will get a bunch of articles on the topic (and some articles on AC in EVs). Just last week I listened to a podcast where Matt Farah (a huge EV fan that just LOVES the Porsche Taycan) said his next car for his wife won’t be an EV since she forgets to charge it and calls telling him the battery is low and she is worried she won’t get home…
Posted without comment:
From 12/13/23 Automotive News Daily Updates:
“As U.S. EV market flattens, some brands perk up and gain on Tesla
New EV registrations grew at a healthy pace, led by old-guard luxury brands, in the January-to-October period but are no longer taking share from gasoline and hybrid vehicles, according to Experian data.”
The problem is the general public is extremely gullible as noted by many of the comments here on this forum. There is tremendous anti-EV sentiment on social media, far more anti than pro. But this has always been the case. SM amplifies the idiotic minority making it seem to gullible people that this is the norm. The best part is that there are still geniuses out there that think EVs are for EVERYONE. Clearly if you’re doing 500 mile a day road trips 60 days in every year an EV isn’t a good option. Also if you’re towing things constantly, not a good option for your either. For 97% of the rest of the population, an EV works just fine. This whole notion the grid can’t support EVs is idiotic beyond comprehension. There’s a tremendous amount of surplus electricity generation at night (you know, when most people charge their cars) that if they just used that base production you could electrify 60% of all ICE vehicles on the road today. Beyond that they will have to increase capacity but to get 60% of all cars to be electric on our roads is going to take many years. Utilities have more than enough time to catch up.
I love my little homesteading Frontier, too. I think the problem for Nissan is that they are too focused on tech in the cabin. Getting my oil change at the dealer, I noticed a lot of their brochures brag about the onboard infotainment. Personally, I just want a point a to be truck, and soon a commuter without all the nonsense (I will even go back to manual windows for that).
Can’t really attest to customers cooling to the EV market- usually see Teslas as the hospital where it might be the fad, but in conversation with a swath of people, interest in hybrids seem to be increasing- heck I am even thinking about going that route. One issue, though, I read somewhere that the lithium batteries only last ten years, I am intend to keep my vehicles for much longer- also why I have sworn off GM and Ford (too many bad experiences with GM not being able to cross 100k miles).
Battery tech innovations have observed by heating up batteries 60oc over 10mins using nickel blanket around the core, lithium ions don’t lose efficiency and fully charge in the 10 mins. So what’s coming are fast charging batteries which last forever!
Wolf,
Don’t dealerships make all their money on servicing, financing, extended warranties, etc.? Aren’t car manufacturers other than Tesla dependent on their dealers, more than the dealers are dependent on their manufacturers? If so, it seems the only way big automakers are going to be able to sell EVs is by launchng subsidiaries, completely independent from the current manufacturers, right? EVs will soon become so reliable, they will need almost no service except once every 50,000 miles, and the occasional battery and tire change, over their 500,000 mile lifespan. Furthermore, won’t unions effectively castrate the automaker if they try to launch subsidiaries? And don’t the costs and simplicity of building EVs (football sized engine + battery) make them vulnerable to low profits and lots of competition? It seems the automakers are stuck, more than being at fault, with no way out.
Legacy automakers have tried to get around their franchised dealers many times to sell direct to consumers, and failed each time. Setting up a subsidiary to sell directly to consumers would not change anything. These are state laws, and the dealers are a powerful lobbying group that protect their turf. And automakers continue trying.
Polestar got around it by only leasing its vehicles (not actually “selling” them), including in sale-like leases, such as a single-payment lease. But it doesn’t have an established dealer network that is fighting it.
For the legacy automakers, online sales — completing the entire deal online but with pickup at the dealer — might eventually pass but hasn’t yet. Legacy automakers have to fight this state by state, in all states.
Even Tesla cannot sell in all states from within those states. There are about a dozen states where Tesla cannot sell direct to consumers. And in those states, Tesla has to sell vehicles from outside the state (such as completing the deal and picking up the vehicle outside the state). I think it has gotten around this in a few cases by opening stores on tribal land inside the state, etc.
Although Tesla builds the Cyber Truck in Texas, it is illegal for them to sell directly to a citizen of Texas.
’cause of freedom and all that.
Sad how little has changed with GM. Anyone remember Ross Perot’s clash with the GM board after the purchase of Perot’s company Electronic Data Systems in the early 1980’s? After GM’s $2.5 billion EDS acquisition (which would be roughly $7.4 billion in today’s dollars), Perot quickly became frustrated with the GM board’s refusal to listen to their customers or employees.
Perot strongly felt that GM’s problem was in the company management and their tendency to “band-aid” issues by throwing money at them. He also observed that the GM employees perceived the management as uncaring and aloof toward their people.
Perot finally sold his shares back to GM and walked away in disgust. So damned ironic that GM appears to have the same problem almost 40 years later. They are busily placating the shareholders with buybacks (read: throwing money at the problem) while Musk is actively building his EV empire.
And these are the “leaders” of American auto manufacturing? This is not just bad. It is sickening.
Perhaps the GM board could partner with the Disney board to produce a new ride for the Disney amusement parks. The ride would be titled “La-La Land.” The ride would open to great fanfare with millions spent by both companies on publicity. It would close six months later due to ongoing operational issues.
I worked for EDS prior to Perot leaving. When I first started, I didn’t even know EDS was owned by GM. We wrote accounting software in the Oil and Gas Division. One of our sales guys was an ex auto marketing guy for GM. He told me that the joke at GM was “we don’t build cars, we build careers!”.
I got an employee discount if I bought a GM car. So young, foolish me went out and bought a Pontiac. Worst piece of garbage I ever bought. I pulled into the driveway on the trip home from the dealership and the right headlight cover fell off!
I was a shiny young Reagan libertarian out of college in the early ’80’s. GM proved to me that all the supposed great things about free market capitalism doesn’t actually work in the real world. And no, this doesn’t mean I’m therefore pro-socialist. It just means that I recognize bad producers can stay in business for much, much longer than the ideology can account for, and regulatory capture is a real thing.
Kent – outstanding post, kudos!
may we all find a better day.
> And no, this doesn’t mean I’m therefore pro-socialist.
Socialism wouldn’t solve this anyway, at least not inherently. A worker-owned GM would still fight EVs tooth and nail without good, forward thinking leadership. That’s the real problem with these companies is that they’re dinosaurs with leadership that’s deeply out of sync with reality.
It’s not just capitalism. It’s that our financial system is extremely poorly designed to deal with even medium term problems that require some short term pain. Being obsessed with your next quarterly earnings call and only your next earnings call means getting surprised when things change. The people on this site can see that EVs are the future of cars, and maybe even the C-suite at Ford/GM/etc can see that, but so long as they are allowed to fail upward whenever they do something stupid they are going to do everything in their power to keep the party going.
@Kent Did you buy a Pontiac Fiero with the 90hp “Iron Duke” 4cyl? I had a friend buy a new Camaro in 1983 with a $10K graduation gift from his parents and to keep the price under $10K he could only afford the base 4cyl. The early 80’s were the darkest of dark times for GM (the current base Camaro engine has over 300hp and will probably go at least a year before parts start falling off). The little 4cyl in my friend’s ’83 Camaro died just before the warranty expired (his Dad had to hire an attorney since GM did not want to replace it).
Back then you got a 12 months warranty with a new Chevy.
I have a friend from India, who explained it this way: in India, if there is a production or manufacturing problem, they would hire 10 engineers. In the US if there is a production or manufacturing problem, US executives would hire 10 lawyers .
seems about right.
They are stuck in the same way Kodak was.
Agreed. I was in the automotive business in the 1980s and the domestic manufacturers have always been slow to respond to the market. Honda and Toyota were very nimble back then, but maybe having North American assembly plants changed their focus?
I’m surprised that Wolf even wastes his time blasting them, as if they’re going to change…
The annual car buying guide from Consumer Reports was something I read when buying a car. I used to be infuriated seeing that after 10+ years of poor performance of American made cars, the executives and their board could not or did not make changes.
I gave up even reading the reports. I figured that I was virtually forced to buy a Japanese car since the “big three” completely disregarded those poor ratings.
How – …Deming’s ghost will ever walk, as long our inner lower primate usually opts for the low-hanging fruit…
may we all find a better day.
Ugh. Yes. Forgot… It’s all about the low-hanging-fruit. I may have to abandon my diatribe against invisible hands.
Wolf,
You said, “Maybe the US legacy automakers should just stick to making and selling overpriced ICE trucks and SUVs;” —- perhaps they will or are.
The time to begin transition to EV was decades ago. It would have been difficult. Perhaps it is impossible now. Maybe that was the real decision.
BYD?
Read “The Innovator’s Dilemma” by Clayton Christensen. There is no way GM/Ford/Chevrolet could have pivoted to making EV 10 years ago, 5 years ago or even today.
Imagine if the CEO of Ford announced to his board 10 years ago that they were canceling production of the F-150 and going to build EVs. He would be instantly fired.
Instead, imagine instead if he announced to the board that they were canceling production of all cars and only building trucks and SUVs. Then it would be bonus time baby!
I think they (Ford) already did that!
If you read your own article. How can you say Tesla’s stock is overpriced? They are strategically destroying the legacy domestic automakers. Isn’t a stock supposed to be forward looking? If they have their own charging stations, don’t spend money on advertising, now have a 14 year advantage, etc… why the prejudice against Tesla? I’ve never owned an EV, but maybe my next new car in 5 years or so might be a Tesla. Here in LA, at the Westfield Century City mall there’s like 15 Tesla charging stations now. There were two 4-5 years ago. Looks like the company is the wave of the future.
All of this can be true, and the stock can still be overpriced. Vehicle sale numbers in the US have been pretty stable for a decade, as reported here. Tesla is grabbing market share from the Big 3 in a zero sum game.
1. Had the pleasure of looking at a cybertruck. The real cyber beast starts at $100 K, mid 80K the lowest one is 60K. The cabin has 4 comfortable seats. Inside (from what I can see) the dashboard looks sleek like Tesla model cars and a central computer monitor.
2. The tires are from good year and bigger. No information about the maximum load or range or how it stands up to a F150 classic. Who I am kidding? The car is for adventures across the downtown or a weekend in the offroad areas (post it in ticktoc or shorts)
3. The truck bed is a glorified trunk, smaller not for a farmer or electrician. The guys near the display truck cannot answer many questions. Lot of people came and looked at the car and truck display. Tesla cyber truck will run with the cool factor but how it will compare to F150 or Chevy pickup?
4. Man is not complete til he’s married. After that he is finished.
You can look up the CT specs. It is comparable to better than the other trucks in its class. If you don’t need towing or live in a cold climate, it will likely be cheaper cost of ownership and do everything any other truck does, but slightly better. More payload, 11000lb towing, and fucking fast!
CT on dirt road beat f-150 raptor on pavement. Youtube carwow dragrace. Ouch!
I HATE the state franchise laws, and think they’re unconstitutional (I’m one of the few that believes in economic liberty, from the Lochner v. NY era).
I wonder whether they would have survived had the legacy automakers lobbied against them.
Did they not want to deal with selling directly, and thus supported these laws to keep their dealers happy? I don’t know.
I do know though that a lot of my peers hate the car buying game, and find the Tesla model (the price is the price) refreshing. However, as I said in another thread, I wonder what will happen when the $7,500 credit goes away.
I think that will kill the last of the legacy mfrs. They cannot make an inexpensive product any more, and the Union didn’t help them. So they, and all those jobs, will go away.
I’d love to see Chinese EVs on the streets in USA. They compare favorably (IMHO) with Tesla’s and are even less expensive (in Europe). It won’t happen, but if someone could figure out how to use the Green mandate and funds to cover the tariffs it would be interesting. Hey, EV’s will save the world. We shouldn’t penalize people from trying to do that just because of where the car is made.
“I’d love to see Chinese EVs on the streets in USA.”
China-made Polestars are already here. But they’re also going after the luxo-crowd.
Wolf,
GM could just try importing the
Buick Velite 6 EV from China to
the US. It’s a four door hatchback
a little bigger than the Ford Focus
hatchback, with a range of maybe
250 miles. And it sells for under
$16,000. That is dangerously close
to “Shut up and take my money!”
as far as I am concerned. And as
a bonus, it actually looks OK to my
eyes.
J.
We will eventually get lower-end China-made EVs. Europe already has a bunch of them. But they would have to compete without incentives and tax credits, and that’s hard.
Wolf,
I am looking at it this way:
After they sell the last of the Chevy
Bolts in a couple of months, the
cheapest EV that GM will have on
the market is what, the $49,000
version of the Equinox/Blazer EV?
Imagine GM minimally homologated
the Buick Velite 6 for the US market,
added $1200 for NRE (and for any
additional hardware, if even required),
$2000 for shipping, $1000 for the
dealers, and $2000 for more margin
than they sell the things for in China;
The new MSRP would be $22,100
for the top trim level.
So next summer, a person walking
into a GM dealership looking for a EV
has the options of a $49k subcompact
SUV eligible for government subsidy,
or a $22k compact hatchback not
eligible for subsidies.
If they only sold in numbers that
caused the slightly smaller Ford Focus
to get canceled, that’s $3.3 Billion in
revenue annually, at ten percent gross
margin. Shrugs, … it is not nothing. I
suppose it might make the UAW a
touch cranky, though.
J.
————————————————–
Of course, I also thought Nissan should
have made a plug-in version of the
Versa eNote to import to the US,
specifically to take advantage of the
“all you can eat” for ~9 month $7500
tax credits, another 6 months of
$3750, and six months of $1875 after
they hit their 250,000 car limit. (I
think I got the times and values for
those right, it’s from memory, so
could be wrong.) They could have
gotten the price after tax credit down
to maybe $13000 for the first ~9
months of unlimited sales, by my
reckoning.
I would like that, too, but I cannot see the UAW agreeing with it, and they still have some clout. I think the labor/management and political dynamics will make this space interesting. EVs are being promoted for climate goals, but these same EVs, will need less labor- less jobs, and I doubt blue collar types will trust any notion about getting retraining for new jobs.
What is disconcerting is that all three automakers are taking the same decision. I cannot speak for Ford or GM. But as for Chrysler (Stellantis), Carlos Tavares is no idiot and he knows what he is doing.
To be clear, It has been 20 years (if you take Tesla’s founding year) since we have been told that the electric vehicle is the only way to go. And what’s the market share of fully electric vehicles 8% in the US ! In Europe, it has reached a mere 14% (with all sorts of incentives and regulations…) People just do not want to buy them…
“People just do not want to buy them…”
LOL. They weren’t mass-produced until a few years ago because, outside of Tesla, every automaker pooh-poohed them and no one wanted to mass-produce them because automakers thought like you, that “People just do not want to buy them…” and now they’re being left in the dust.
Auto sales as a whole are down from their peak (dual peak in 2000 and 2016), and every EV sold is an ICE vehicle that is not sold, and ICE sales are slowing further, while EV sales are booming. This is a terrible situation for an ICE maker to be in. They’re stuck in a rapidly declining market.
Here are total vehicle sales in the US, annual. 2023 is going to come in at about 15.5 million, of which 1.1 million will be EVs, and 14.4 million will be ICE vehicles.
Wolf, what is behind this EV misinformation people keep spouting off? I’ve encountered more of it this past 12 months:
“Nobody wants EVs”
“No one is buying them”
“They have ZERO range you can’t even drive 50 miles a day!”
It seems like a large swath of the general public is enthusiastically rooting against EVs, and these are the same folks that supposedly like a fast car, high-performance, high-HP vehicles. Is it possible there is a shadow campaign to misinform the public on EVs?
The person you are replying to believes no one is buying them. Are these dealership bots, or just people who prefer their own imagined realities vs. the truth?
A large percentage of Americans live in their own imagined realities with “facts” of their own creation. And yes, a large swath of the population is rooting against EVs along with renewable energy. These are people for whom the future has ceased to exist.
I think it can be multiple factors, from not wanting to change, to the feeling that they are being pushed into them through legislation, to anecdotal reports about problems. Factor in also we live in a nation (the US at least) that has no trust of legacy media or public authorities, and so people search info all over the place. Personally, while I see Teslas at the hospital in my area, I do not not anyone with one, leading to a lack of first hand knowledge giving me a baseline for BS. That being said, the needle for hybrids seems to be moving towards more acceptance, so maybe Toyota did call it right a couple of years ago with the idea of having hybrids as being a bridge to electric vehicles.
PS, range anxiety is a very real thing, too. No one wants to get stranded on a road trip traveling a couple of hundred miles a day. Without direct experience or info from a trusted person, that will continue to be another issue and clickbait for some doom reading.
While I am admittedly a first adopter, I have a 2019 Kia Niro EV and a 2022 Kia EV6 because I couldn’t buy a Tesla in Austin, TX. The Niro EV (with 75,000 miles). I have an OBD battery monitor that claims the Niro battery health is still at 100%. It is is by far the best car I have owned in my 60 yrs. of car ownership experience. My wife drives the EV6 so I can only say it has been virtually problem free. My biggest complaint is the cars come with no spare tire (only a “tire mobility kit” which i an inflator with leak sealant). So far that has cost me a $500 tow for the EV6 due to a blown tire late at night 50 miles form home. IMO tires are the largest maintenance expense for EVs. One can probably plan on average tire life of 30,000 miles. Have made several 200 mi. one way trips to north Houston and was able to fast charge with minor problems. Although I have a 66mi. round trip daily commute I made do with the 120 v 12 amp charger that came with the care no problem. Installed my home 240 volt 40 amp garage charger for less than $500. Although it could be done, would not buy an EV unless I had good home charging available. In other words at the present time I would not want to rely on 3rd party charging. Oh yeah, energy cost per mile electric 3 cents vs 15 cents per mile gas.
Geo – the conversion from draft animals was far from instantaneous (…even WWII’s vaunted mechanized Wehrmacht was using animal-drawn logistics).
may we all find a better day.
I get the sense that even the insane price hikes on popular ICE vehicles may be coming to an end as supply chains seem to finally be working out their issues with respect to some of the very supply-chain challenged import brands. That will put even more competitive pressure on the domestic automakers in their bread and butter offerings.
Case in point – Honda, which was one of the most inventory-challenged car makers out there seems to have actual vehicles for sale now! Went by my local dealer and they had more than a dozen of the popular CR-V examples on the lot. While still a lot less that what they stocked pre-COVID, this is waay more than what they consistently had up through 3-4 months ago when the lot was simply barren for years. And it looks like the dealer has a ton of additional inventory in transit as well. Yeah, they still have a $5K “market adjustment” sticker on the CR-Vs. However, with even more inventory on the way the sense I get is that by late January Honda will finally be well-stocked for the first time in years.
As far as EVs are concerned, the domestic automakers have dropped the ball on them. And gawd help them if the import brands catch up to Tesla while the big 3 have given up and turned to stock buybacks in lieu of investment and innovation. And if the Chinese EV makers ever penetrate the US market they will be completely toast.
I bought a Hyundai Santa Fe hybrid a few months ago for $2k under sticker. The days of the “market adjustments” are definitely over, at least in my area.
What made that Korean vehicle attractive enough to buy?
100,000 mile warranty?
Probably the $28k price.
Watch Motor Feed Youtube channel:
The Truck Market Just COLLAPSED! Buyers WON’T PAY For OVERPRICED Trucks.
He drives around to major metro dealerships and videos overflowing dealer lots. Supply shortage is over, just when high interest rates and perceived slowing economy has buyers on the sidelines.
I predice massive sales in January after the holiday selling is over.
But my FB feed was already showing me $12-15k ‘discounts’ on new RAM trucks last week. I see 10-15% below msrp deals on the website.
How come Japanese car makers are also lagging behind? Is it because the market is not big enough for an already big guy?
I don’t know that they are. There is still an enormous segment of America that doesn’t want electric vehicles. Toyota announced recently that they are getting rid of their non-hybrid models for nearly all of their cars.
Moving to a full electric is the next step in that progression, but maybe they don’t want to alienate the people who don’t want a full electric, for whatever reason.
If a person has a garage/driveway with electrical capacity for a charger and a managable daily commute with minimal need for regular long-range driving, then an EV is absolutely excellent, possibly even the best possible purchase. There are lots of these folks and they’re driving growth in EV sales, especially up in the luxury segments. Driveways with an EV and an ICE vehicle parked together are increasingly common in suburbia.
But lots if people live in apartments. In my experience, in the greater L.A. area and even out here in NM now, multi-unit construction has dominated recent housing growth. And none of these complexes, old or new, have been built with meaningful EV charging infrastructure in mind. No surprise, you don’t see lots of EVs parked around apartment complexes. Apartment dwellers don’t mix with EVs as well, and not enough is being done to change that. As the suburban market becomes more saturated with EVs, adequate charging infrastructure could be a limiting factor for EV sales. It’s not so much a matter of who doesn’t want EVs. Lots of people want EVs, but not everbody can accomodate or afford EV ownership.
Books will be written about how Toyota — formerly an early shareholder of Tesla and possibly the best automaker in the world — dropped the ball on EVs so badly.
Kodak moments, all of them. Just watch what happens from here on.
I think we need to wait and see on that. Hybrids are the right vehicle for most people right now as infrastructure transitions to support mass adoption of EVs. IF Toyota actually delivers on their solid state battery promises, it’s going to be a game changer. Toyota might have positioned themselves perfectly to offer the better solution for most people right now in hybrids, and by waiting to go all in on EVs until the technology makes ICE engines obsolete.
Living in the midwest, a Hybrid is for me because of long distance travel. I like the idea that is gaining traction where the EV also has a small gas power plant to charge the battery. That way you can use the electric plug in which get you around town on a single charge but it has a gas engine to charge the battery for long trips and you do not have to stop and charge the car.
I notice RAM Ramcharger is going to build such a truck. It is a plug in that will have a range over 690 miles with the combined battery and gas engine. It still will have great towing capability and is a speed demon like most EV vehicles.
Since the Ramcharger runs on dual electric motors, a 250kW in the front and 238kW one in the rear, it’s effectively an EV. But operationally, it’s like dealing with a plug-in hybrid.
You get EV benefits, including speedy acceleration from 0 to 60 mph in 4.4 seconds, and you can drive lengthy distances on the 92kWh battery without burning any gas. According to Car & Driver, the Ramcharger has a usable battery capacity of 70.8kWh and can drive up to 145 miles purely on electricity. A gas engine then kicks in to continue powering the EV system once the battery is depleted. Just because the Ramcharger has a gas engine doesn’t mean you want to burn fuel. As long as the truck is kept charged, preferably at home, you could use it on short trips and never need to stop at gas stations.
You still get great towing capability as the it will have 663 HP and can tow 14,000 lbs.
EVs are improving by like 10% a year and cost of ownership already makes ICE obsolete. But where is my toyota EV? The Toyota BZ4yx name didn’t really catch on for some reason? hmmm
EV’s are damaging to the environment. Hybrids are the way to go for now. In the future hydrogen vehicles will be game charger. EV’s are temporary and will go away.
“ I like the idea that is gaining traction where the EV also has a small gas power plant to charge the battery.”
This is the solution I want today. I don’t want the maintenance hassles of ICE components inherent in a hybrid. Having just a small engine to charge the battery eliminates range anxiety.
I’d never buy a RAM because I don’t buy American vehicles, but the Ramcharger makes sense. It seems like a good near term solution until EV gets to versions 3 or 4.
I believe Toyota is actually the smartest, with the hybrid-centric strategies.
When EVs achieve a certain penetration, we will start to see problems everywhere with electric grids being able to support them.
Toyota (and Honda) are the only automakers well positioned for the next (and real) revolution, which is fuel-cell vehicles. Yes, I know there’s no hydrogen infrastructure. But fuel-cell vehicles make sense in a way EVs never can and never will
Toyota’s sales are getting crushed in California by Tesla. It’s still #1 overall because it has trucks and lower-end cars, but all its car and SUV models are way behind Tesla’s, it’s almost painful to watch. Honda used to be #2 and occasionally #1 in California. Now it’s #3 way behind Tesla. Hybrids are great, and we have one, but they’re not competitive with EVs in many aspects, including performance. In CA, Tesla has been gaining on Toyota so fast it’s scary. All ICE vehicles should be hybrids, I agree with that. But it’s an expensive complex technology, and the models that are fuel efficient don’t have a lot of power.
They hitched their wagon to fuel cells, which was an epic blunder.
I have first hand experience with fuel cell vehicles, and the problem is the level of complexity and cost of producing fuel cell engines is at least an order of magnitude greater than an ICE equivalent. Also, hydrogen is a miserable thing to work with.
EVs are dead simple in comparison, plus there’s a ‘refueling’ infrastructure mostly in place – the grid.
I wonder if Toyota can be agile enough to course-correct. The TNGA platform was a silly idea. Trying to build EV’s on the same assembly lines as ICE and hybrid vehicles didn’t allow them to scale up production to meet the demand they never saw coming. Very un-Toyota like, IMO.
Lots of Rivian trucks around my town. They are beasts in the snow.
“Books will be written about how Toyota… dropped the ball on EVs so badly.”
I don’t know, I think they’re handling EVs the same way they handled hybrids, not rushing anything to market until the tech is pretty well-baked.
By tech, I mean everything that would lead to actually taking sales away from ICE vehicles. like solid state batteries for as-good or increased mileage compared to ICEs, etc.
I like the performance aspect of EVs, but I think the ~300 mile range (far less in cold weather) is a turn off for most people, especially when considering the purchase costs and difficulty in driving longer distances in a timely manner.
I say that having owned 4 Ford hybrids over the last 10 years, with their much better range. The “Eco” mode on the AWD Escape nets over 50mpgs locally, and I have no range anxiety knowing I can “recharge” it anywhere there’s a gas station on longer trips.
I can respect what TSLA has done, but their prices for what it received, build quality, and customer service still seem well short of the mark for me.
“…they’re handling EVs the same way they handled hybrids, not rushing anything to market until the tech is pretty well-baked.”
Toyota was not only on the forefront of hybrids, it was THE forefront. Their Prius was the first mass-produced hybrid ever, and went on sale in Japan in 1997 and globally in 2000. They showed off their concept hybrid in 1995 at the Tokyo Motor Show, and everyone thought they were nuts.
It’s the opposite with EVs. Toyota totally dropped the ball.
Which battery technology will win in your opinion – 4680 or solid state?
Why would I care? Maybe there will be something else? It’s exciting to watch all these outfits trying to come up with new stuff, and they’re doing it.
Total bs.
Toyota has not dropped the ball on EV’s.
They will transition from ICE to hybrid over a period of time allowing them to capture those that don’t want an EV.
The hybrid share of auto sales will increase as ICE sales decrease and will allow them to maintain sales volume for their legacy products and factories while slowly transitioning to EV’s that have superior batter technology than currently available in the market.
Toyota cars of any type will maintain the level of quality that Toyota is known for and cement their leadership in the market.
A Toyota made EV will be miles ahead of any other mass produced EV in terms of quality.
For a person that supposedly lived in Japan you know jack shit.
Will be will be will be.
Meanwhile, now, in reality, EVs are eating Toyota’s lunch.
Toyota has had hybrids for over 20 years. It has been offering hybrid powertrains in nearly every model. Nothing new. They’re more efficient but more expensive than an ICE. And EVs run circles around them. We have a hybrid. I know whereof I speak.
What do you think about Toyota’s EV strategy? They’ve made big announcements. Are they all hot air or do you think they have EV technology that will be successful?
Yes, while some EV makers are actually mass-producing cars, Toyota is mass-producing announcements. The announcements are not hot air – Toyota is now really trying to put EVs together. But it’s so far behind
I have for years considered Toyota to be one of the best automakers in the world. They developed and produced the first hybrid, a hard and complex technology to master and produce at a reasonable cost, and everyone thought they were nuts, and now most ICE vehicle models by most legacy automakers are offered with a hybrid powertrain option. It remains incompressible to me why Toyota dropped the ball so badly on EVs.
Wolf-
You make a strong case that the legacy auto behemoths are blundering toward the grave and need radical surgery — perhaps brain surgery or a head transplant — while Tesla ascends.
You also describe Tesla stock as “ridiculously overvalued.” Could you elaborate on the “overvalued” notion, or perhaps on you opinion of what price level would be a more attractive valuation for TSLA shares?
Thanks.
(Your anger at incompetent managements is appreciated!)
I won’t speak for Wolf, but their PE ratio is 78.
That means the “markets” are expecting absurd growth basically in perpetuity. Same with Apple and the other magnificent 7.
At some point, you hit a wall. It’s a lot easier to double your revenues from $100 million to $200 million than from $50 billion to $100 billion.
For Tesla, that’s even more true, given that they actually have to produce cars, and are not just selling software or advertising.
Yes, that’s a good and tough question. I used to be very harsh on Tesla’s stock, but Tesla did accomplish stuff I never thought possible, and it crushed its competition (the legacy automakers), which I never thought possible either. But I still think that at the current price level, it’s more likely to head down than up. So it’s not a buy for me. I would probably get interested with a trailing P/E ratio of 20 if it continues to grow and fire on all cylinders, so to not speak. It currently has a P/E ratio of 77. So long way to go, as far as I’m concerned. But that’s just me and not financial advice.
Tesla is not just an auto company! It is a technology company, with bots, drones, phones etc., coming! Is it overvalued? Yes, but in ten years it wont be and its market cap will be higher.
A prudent investment involves (1) a great business and (2) a fair price. It’s really as simple as that.
Also, all that data they can scoop up with vehicle data and apps (although I think all the car companies are gathering that).
A lot can happen in ten years. I’m just seeing if we will all survive the next one.
Tesla is a microscopic drop in the bucket in terms of vehicle sales and wouldn’t even be in business without huge government subsidies which will be completely going away.
It WAS microscopic. Now its Model Y is #2 in the US, closing in on #1.
Went from microscopic to macroscopic?
Musk is a South African who excels in crushing, a trait exampled by their World Cup rugby team. The Cyber T is going to do similar, as nothing like it exists and there will be many receivers waiting to catch it. Anyone who experiences the dense petrol fumes in all big cities should agree that full electric is a necessary solution.
In a free economic system, the big 3 would have failed in 2008 and been replaced by nimble non unionized start ups. For ICE vehicles and hybrids, Toyota is vastly superior.
As are Hyundai and Kia. They’ve gone from small players to major ones in a very short period of time.
You must be wrong! Biden told us that Mary Barra was our saviour and will lead us to the promised land. We’ve only just begun. Legacy is merely retrenching for the big push. Roll on Biden!
In 2020 Ford produced hundreds of ventilators. In the next few years Ford might produce thousands of F-550 8 wheels APC, bc we are naked in main street.
A few thoughts.
1. The # of Teslas/EV is proportional to gas prices – $5/G west coast US $8/G Europe = lots of Teslas.
Gas is <$3/G east coast. Less Teslas.
2. Maybe the Big 3’s foray into EV is just for show – “hey, we tried, but no-one really wanted an EV”.
3. Ford has its Lightning F150, but it’s simply not a viable half-ton pickup in the traditional sense, I.e hauling/towing. ICE gas/diesel is currently the only viable option for half/three-quarter/one-ton pickups – the physics just don’t work for EV in this segment.
Your #3: very few pickups are sold to people who use them the way you describe. Most of them are used to commute to work, go out in, etc. Pickups are expensive, increasingly luxurious personal transportation. That’s why they’re bestsellers. Work trucks, including for actual hauling, are only a minuscule portion of them.
“work trucks are a miniscule portion…..”
Try finding a standard cab blue collar pickup with its 8′ bed meant for hauling plywood /sheetrock / 93″ studs….and low bed to ground clearance saving your back.
I spend way to much time searching for these work trucks.
We all have our favorites. Mine is the 7.3
Yes, exactly. Just look around when driving to see how few people are actually hauling stuff in their truck bed (that couldn’t otherwise be easily carried in a trunk or hatchback)… much less pulling a trailer.
Which is pathetic, in my opinion. A pickup truck is a tool. You don’t buy tools for fashion statements.
@Einhal 99% of the “tool watch” guys wearing Rolex Submariners and Omega Seamasters that can go 100 “meters” deep have never been deeper than 15 “feet” deep and just wear them to make a “fashion statement”…
Exactly. Trying to find a long bed, single cab pickup with manual trans, no luxury crap to break and the actual running gear upgrades is nearly impossible.
But it sure is easy to find a mint condition brodozer with full leather interior, a 4wd switch with the plastic cover still on it, and chrome rims for 10% new MSRP with 100k miles on it. Don’t forget the cantaloupe sized muffler tip.
What’s funny is that it took months for me to sell a very clean 86 Chevy with 8 ft bed and standard cab this year. Very basic truck with nothing more complicated than the radio. Guys didn’t want the V6, or manual windows, etc.
“Guys didn’t want the V6, or manual windows, etc.”
Correct. There are always these claims in the comments about how everyone wants basic vehicles, and they lament all the fancy stuff being sold today, but reality is, Americans who are actually buying vehicles don’t like basic vehicles, and they don’t buy them, and automakers have figured it out too.
The auto industry refuses to learn from their past. When Toyota first launched Lexus, the cars were priced to deliver a really good value. Not to be confused with cheap, but Toyota still sold a LOT of the Lexus cars.
Now with the reputation solidly established, Toyota has jacked the prices on Lexus up to the point where they are no longer a good value. And Lexus sales have tanked.
Honda also did this with Acura, with pretty much the same results.
Even when they offer a lower price on a vehicle, the manufacturers have started de-contenting the “cheap” models to the point where they’re no longer a good value. A little over a year ago, I bought a new Toyota 4Runner SR5 Premium. I wanted a body-on-frame SUV with a real towing capacity and there wasn’t many choices.
For $45k, I got a truck with a spectacularly BAD audio system. There were no tweeters at all….the closest were the 4-inch speakers on the dash. ALL of the door speakers were woofer-only, even in the rear. And the woofers were paper cone with lightweight plastic baskets and the smallest driver magnets I have ever seen. It sounded like shit.
And it had old-school manual air conditioning controls. If you wanted automatic climate control (standard on my 2017 Honda Accord LX!), that was the “Limited” model for an extra $5k. But the Limited has a full-time AWD system and a reduced towing capacity. The only way to get the more-durable traditional 4WD system and the automatic climate control was the TRD Off-Road package for $55k. Sorry Toyota, but I’m not spending an extra $10k to get automatic climate control.
This is my third Toyota, but unless they get their heads out of their asses, it’ll likely be my last.
I won’t even look at Stellantis….driven too many terrible cars they made. And Ford/GM have jacked their prices up to eye-watering levels. $60k to $100k for a pickup truck? One that’s going to rust out and fall apart in five to eight years? Not a chance. (I had a Chevy pickup….I had to replace every single brake line on an eight-year-old truck because they were dangerously rusted. $1,500 later it was safe to drive again.)
That’s why I’m still driving my 2007 4 Runner.
I live in snow country….there are very few non-rusted examples of the 3rd or 4th generation 4Runners left. I really liked my 1998 4Runner….it got better gas mileage, had a much better transmission and had more usable interior space in a smaller and lighter truck.
Toyota didn’t start paying attention to rust-proofing until they had spend several $billion buying back (or replacing the frame on) all the Tacomas with rotted frames in the early 2000’s.
Everyone complains about the prices of pickup trucks as if GM and Ford set the prices. These companies are corporations. They charge what consumers are willing to pay. Once the demand drops off, incentives come out of the woodwork. Thats how it works. I don’t think we can shake our finger at Ford and GM for charging outrageous prices…they are beneficiaries of the cheap money era, covid stimulus, low interest rates, etc. etc. This is a free market. Its actually us, as a collective country of consumers, that we should be mad at for establishing these crazy prices. If you don’t like what the quarterback is paid, quit going to the game and buying the tickets. Same with pickups, the demand is there, hence the pricing and high margins. This will change with time and consumer shifts. Americans love their trucks and SUV’s, and its one thing the legacy automakers are really good at building and selling.
Thanks Blake – with a few minor edits your note could apply to several other “asset” classes that have been priced out of easy reach.
If you don’t like the price don’t buy – if your car was manufactured since 2010 and sold new in the US it’s good for 20 years and/or 200k+ miles with routine maintenance. Of course there will be exceptions, but if you’re buying more frequently than that it ain’t for transportation.
I have a similar screed re: housing. Will roll it out some time when the “I can’t buy a house but I’ve got time to whine about it here” chorus gets too loud. Short version – buy a dump, grab a hammer, start swinging, now you’re part of the gentry.
Here is some free advice for Ford and GM:
Go to the University of Michigan’s Formula SAE Team, and have the students design and build an economical 4-door, mid-sized EV. In one semester, they will have a great machine for mass production at an affordable cost.
From an engineering perspective, it is not that complicated. Mr. Musk did an interview a while back which covered a lot of topics, but which focussed on the Cybertruck. His take was that the design part was easy, but building a factory, and getting to mass-production was a thousand times more difficult.
The legacy auto makers know how to mass produce — one would think. But they sure don’t seem capable of designing and building an economical EV. Go to Ann Arbor, and seek help. It’s right there.
The real free advice is to skip to the next form of transportation. But this requires vision which the big three top brass don’t have!
“…….design and build an economical 4-door, mid-sized EV.” Not speaking for Ford, but GM already has one (The Bolt EV and EUV).
Lower cost means lower profit for both manufacturers and dealers. Interest on a $100K vehicle is a lot more than interest on a $17K vehicle. The financialization of everything is what has destroyed the auto industry. Alos, the urrent design goal is driven by the dealer driven question, “what will maximize servicing and financing profits over the life of the vehicle?” That’s why you can’t buy a vehicle without a gross excess of unwanted “features”.
When has the financialization not been the basis of our system? Admittedly if they want to make money they should combine it with donating organs as what’s an extra kidney if you are healthy and could be a solid down payment of a vehicle. Families struggle with things like diapers as there are really only two companies and they cost little to make but cost a significant amount to purchase. More than once I have seen somebody running out of Target at high speed filled with diapers. Although perhaps Disney pays money to put Mickey and Spider-Man on diapers perhaps as kids don’t care.
I’ve driven both the Bolt EV and EUV, and I’d describe them both as “meh” cars with a really problematic battery pack. GM had to recall everything built before 2021 because the battery packs had the uncomfortable habit of catching fire without obvious provocation. Even after the battery pack swap, the new pack features MUCH longer recharge times.
To this day, many parking garages will not allow Bolt’s.
It’s one of the cheapest EV’s….pre-2022, it had a low-rent interior that was an embarrassment on a $45k car. Power was adequate (barely), but felt slooow compared to the other available EV’s. By 2023 when GM upgraded the interior and seriously cut the price it was a much better value.
And 2023 will be the last year for the current Bolt. GM is now promising an Ultium-based Bolt EUV….”soon” (but not before MY 2025)
um. no.
but they can tweak a handed down (not from scratch) car.
it takes a team of engineers and machinists to design and prototype 1 part on a car.
grimp,
Check out what these students can do.
https://www.mracing.engin.umich.edu
You are right though. Ford & GM have teams of engineers working on one part. I like the KISS philosophy. But, it is nice to have things well-engineered and reliable. For an economical EV, KISS is probably what is required.
Anthony A.,
I’m glad that you have and enjoy your Bolt. It was a surprise to me when GM announced that it would discontinue production on these back in the springtime. I know that you are an engineer & a car guy, so that is high praise on the Bolt. Cheers . . .
So you don’t think the Bolt is an affordable EV that was designed and built by GM? or you want something different?
Blake,
Anthony A. reminded me that the Bolt is an affordable EV from GM. I should have only mentioned Ford in my first comment.
Something different? Yeah, the Tesla Model S Plaid with a Track Package.
Fair enough. You don’t have to love the bolt (I don’t, i find it ugly as sin), but at least we can agree its an affordable domestic EV
Wolf, great article. More articles like this please. The regurgitated “AI” articles can’t come close to the emotion. You got me all fired up!
“Common sense is not so common” is what comes to mind with the legacy automakers. I worked at a Ford dealer in high school (2002) and saw the obscene amount the salesmen made. They would trade Rolex watches in the lunch room every quarter on a Friday night after their bonus checks came in. The profits must have been extraordinary back then.
Hard to innovate when you’re a company as old as Ford, but they need to figure it out.
People who do spring for an EV often buy a gas car as their next purchase. This was established by a recent study by S&P Global Mobility.
Finally, the Detroit automakers are waking up the fact that most people do not want electric cars. They need to cut their losses and get back to business.
.
really? I know dozens of people including yours truly that have two or more Teslas. The only people who say they do not want one have either read something negative wrtitten by a guy who doesn’t own one or simply are not in the market for any car at the moment.
Here in my middle class neighborhood in Santa Clara, Ca there are 2 families that have both a Tesla model S and a model X. There’s another family that has 3 Tesla model 3’s and one that has a model Y and 2 model 3’s. One family recently replaced their old model S with a new model S.
EV Pickup Trucks were/are a fools errrand. Nobody that needs a truck is going to buy such a dog (can’t tow for long, no range, etc.).
US automakers have huge legacy employee costs (unions) that won’t allow them to sell low margin vehicles for long.
EVs will only be feasible in very small size, local driving only AND with some type of incentive to recharge off of a small solar array in the backyard. The grand vision (remember Uncle Joe flooring an EV Hummer?) of everyone driving EVs the same amount or more as ICEs and saving the planet is total nonsense. The grid will never be able to support it, let alone the special materials needed for batteries, etc. And they will never have the convenient range of ICE.
So get over it. Tesla is in a sweet spot right now, but wait until their growth also slows. And it will.
🤣🤣🤣
You’re still posting this EVs-will-never-work-because-of-yada-yada-yada-and-the-grid stuff? It’s just funny by now. Was OK 10 years ago though.
Agreed, it reminds me of the disinformation campaigns against seat belts when they were mandated. The campaigns were so good school busses didn’t have to have them “based on falsified studies”…
My favorite is the everpresent, “the grid will never support it.” Houses come with batteries now that charge from mere sunshine and these same houses come with outlets in the garage for the cars to plug into. Really.
The need to update the grid is a feature, not a bug, of the government involvement in the transition to EV. Utilities and the adjacent will be lining their pockets every step of the way. Powerful people with friends in high places.
The grid is perfectly fine. New studies show that with solar and dispersed battery storage and Tesla VPP, which Tesla basically created by putting batteries in garages and then using software to let people sell power to the grid at peak hours, means the current grid can handle all our needs.
You’re talking about the power supply with solar and battery storage, both areas that are benefitting from huge tax credits through the Inflation Reduction Act.
There is also an aging transmission and distribution infrastructure that needs a complete overhaul to accommodate the clean energy transformation, or so say those in high places requesting the funds to do so from the taxpayer.
The big 3 are brain dead pickup manufacturers protected by oligopoly tariffs and EPA mileage rules that exempt trucks and coddled by pro union policies that have left them flabby and noncompetitive with the EV makers and Toyota, the best ICE manufacturer. If Chinese EVs were given a level playing field, and the stupid chicken tariff of 1964 repealed, they would all be bankrupt promptly.
If not bankrupt, improved with a swift slap of the invisible hand. Mr Buffet has a play unmentioned in this chat. BYD just launched in North America. Mexico, true, but at the border. 😮
BYD is already assembling and selling battery-electric buses in the US.
BYD is doing the same in Canada.
MW: Rental housing and used cars are key contributors to November retail inflation
And I know Wolf doesn’t agree, but there is a clear ceiling developing in the US with regard to EV market penetration. The early adapters have mostly adapted. EASY are still 10K more expensive than similar ICE vehicles. They less useful in cold climates and cor apartment dwellers and charging on the go for road trips is still not optimal. EVs are starting to pile up at dealers. They probably aren’t going to be 80%of vehicle stock in the US in 10 years unless government subsidies are even more ridiculous.
I get so tired of this stuff over and over again.
1. EV’s are not more expensive than equivalent ICE vehicles. That is just dumb BS. The Tesla Model 3 competes directly with other real-wheel drive sports sedans in the “near-luxury” segment, such as the BMW 3-series. Compare a Model 3 base version with a BMW 3 series with a similar 0-60 performance as the base Model 3, and you will see.
2. The only EVs that are “piling up at dealers” are the EVs from the legacy automakers. Tesla and other EV makers don’t even have dealers, and no one can track their inventories if any. The reports of EV’s piling up is strictly for legacy automakers, but they have less than 30% of the EV market. Cox Automotive came up with that inventory BS, and I blasted them publicly and privately for not disclosing that they’re just talking about the legacy automakers, that 30% of the market. And to use that as a lack of demand in the EV market is ignorant BS. But if you want to lambaste Ford whose EVs are piling up, go right ahead, and I will cheer you on. But don’t confuse Ford with Tesla, and don’t confuse demand for Ford’s EVs with demand for Teslas and Rivians.
3. This “saturation” and “end of growth” whereof you speak have been predicted ever since they stopped predicting that EVs would never-ever work because of yada-yada-yada; they stopped predicting that EVs would never-ever work because now EVs are everywhere and they’re clearly working just fine, and many commenters here have EVs (well, some people still predict that they will never ever work).
I’ve just been letting the numbers speak for themselves as they come in quarter by quarter, so I can watch with amusement how EV makers are eating the lunch of the ICE vehicle makers, and so I can read in the comments with a mixture of amusement and exasperation how EVs will never work, and how sales have stalled, or whatever.
A record of 1.1 million EVs will be sold in 2023, and ICE vehicle sales will be down to about 14.4 million, from 17 million in 2019. That’s the problem for the legacy automakers. Their market share is shrinking within an overall shrinking market. And some morons in the press are spreading BS about declining EV sales, my ass.
I’m not picking an argument here, and agree that legacy manufacturers have a problem with excess EV inventory. But I will share a few facts.
Tesla’s share of the US EV market Q3 2023 is 50%. All the other start ups without dealer networks are about 8% combined. So more than 60% of the US EV market is now a dealership market. Cars piling up at dealerships is not a small problem for the US EV market.
Tesla, with 50% of the US EV market, sales are off Q3 vs Q2 2023 by 7%.
They are up 27% year over year, and they suggest that the quarterly decline has to do with factory retooling, but they are probably through the backlog of the last several years, and the price cuts of the last year are an obvious means to increase sales, as are all such price cuts for traditional car manufacturers. If demand was still high, they would not be cutting prices. Sure, price cuts put financial pressure on the legacy car makers, but their EVs are not in the same entry-level luxury category as Tesla model 3 (except maybe the Mustang).
The growth of Rivian and the other niche brands is still very high, but they are very early in the curve.
So if Tesla sales are off, and dealership based EVs are piling up, you can probably say that EV sales are slowing.
Oops, bad math, 40% of US EVs are sold through dealership networks, my bad…
The market clearing price for Teslas has definitely fallen. But Tesla’s high margins allow them to drop the price and sell all Teslas produced at a profit. Go to Tesla website and you can lease a model Y for $399/mo and a model 3 for $329/mo. Not bad!
And use a Tesla referral link from a friend to get 6 months of free supercharging and 3 months of Full Self Driving.
use my code: james64823
:)
When gas spikes to $10-15/gal you’ll see a lot more EV penetration as the economics make more sense but I think a better forward thinking bet is actually everything other than cars. I don’t even just mean public transit like buses and trains but small personal vehicles like mopeds, scooters, ebikes, and traditional motorbikes.
The amount of degrowth that will be required by a future with significant resource restriction will force it through just simple economics. Remember, bike mileage is almost an order of magnitude better than cars. High end Honda sport bikes like the CBR1000RR get over 40 mpg, the Metropolitan is nearly 120.
Monolithic is what I call these so called auto industry giants.
They all seem to have star chamber boards who just can’t seem to get out of their own way. Maybe this is unfair but it seems like they are directed in so many directions, each competing for resources, and none of them particularly focused on anything profitable.
Barely pay any attention to the auto maker clown show, and share your obvious frustrations.
It’s because all the boards in America are Ivy League silver spoon fed . They never lived in a real world environment.Much less went grocery shopping or washed there own clothes ,much less cooked food .Then they all appoint each other to each others boards .PONZI country club b** shit .
All the fine carriage builders of the 1800’s supported their legacy sales network and customers right until the end. Same with all the oil lamp manufactures.
There’s different people running things now, so this time it will be different. Just like it’s always been.
Side question: Does your message feature keep track of things typed but not sent? I know the sent messages can get you riled up, so the ones people thought about and decided not to would be even more interesting
“Does your message feature keep track of things typed but not sent?”
LOL, Google has that tech with its Gmail, which constantly saves “drafts” to its cloud while you’re working on the email. My system is just WordPress which saves no drafts of anything, and it’s very easy to lose comments forever before they’re posted. Once they’re posted though, they usually stick, but not always either. I lost plenty of my own stuff and had to start all over again. That never happens with Gmail, there’s always a saved draft in the Google cloud if your computer crashes in the middle of writing an email. But I don’t know if Google uses the old drafts in some way.
…AI learning-input, mebbe?
may we all find a better day.
I’m going to mess up AI’s learning by saving a bunch of really stupid drafts?
…gotta be ready for those inevitable stupid ones they’ll be required to handle in the future!
may we all find a better day.
Just hope they don’t get bailed out or saved because of national interests or some other reason. Politics will of course be at play because of the important swing state of Michigan but no meltdown that is imminent, just written in the stars. I can’t think of a single American car I have owned(Ford Explorer, Chevy Cruze, Saturn, Geo Prism) where the foreign owned ones(Subaru Outback Express ,Toyota Rav4) weren’t significantly better products at similar price points. Perhaps my Grandma’s 1972 Puke green Dodge Dart has fond memories but more for the cutting school and going to Santa Cruz memories, plus pre 80s where cars like Ford Granada and other masterpieces were created.
If there is a better foreign equivalent to my 2011 Chrysler 300C, I have never seen it, and the notion that it would be cheaper into the bargain is high comedy.
Bull’s eye, Wolf. To benefit from the buybacks, shareholders would have to sell. The next best thing to an engraved invitation.
Picking a nit here, but not an insignificant nit:
“…even the Wall Street Journal, which years ago has turned into a prime anti-EV rag…”
Dan Neil, the WSJ auto reviewer, has built a reputation for basically ONLY reviewing EV’s, and praising them over comparably capable ICE’s which invariably cost way less. If you read the comments on his articles, he’s frequently mocked for his EV-angelism.
I wasn’t talking about the reviewers — I don’t actually read them — but about the reporters that write the news articles and come up with BS such as:
“Biden’s Electric-Vehicle Push Hits a Speed Bump” — which was hilarious because it discussed how the crash of the lithium prices will kill EVs because lithium is now too cheap and there won’t be enough production, therefore not enough EVs can be built, after saying a year ago that the huge price spike of lithium is killing EVs because it makes them too expensive. These moron reporters at the WSJ never cease to amuse.
“Are Americans Falling Out of Love With EVs?” was another piece of utter BS.
“EV Makers Turn to Discounts to Combat Waning Demand” – was another piece of braindead reporter BS: Tesla cut its prices (it’s still hugely profitable after the cuts) because it wants to kill Ford and GM, and they cannot cut their prices and remain profitable on their EVs because they’re already losing money on them, LOL
WSJ tried to pitch a full labor recession as a thing earlier this year. They’ve become more and more clownish over time.
There is only one thing you need to know about the WSJ and that’s who owns it. Once you know that, you never have to read another word they publish ever again.
According to some counts, Hyundai is now the number 2 EV seller in the US. Without subsidies. Their EV sales grew 50% yoy and they are expanding further. Also price cuts for the new year.
Toyota has at least a philosophical grounding. American legacy automakers are just incompetent.
Every Hyudai EV was eligible for the $7500 tax credit this year if it was built into the lease. It was a loophole for the tax credit. I tried to buy an Ioniq 5 on Feb 27th when Hyundai has JUST figured out how to work it into the lease. But the dealership games made me walk out after 4 hours or back and forth since they didn’t offer me what they said they would on email/phone after I drove over an hour to make a deal. I ordered a model Y online in 5 minutes with a credit card deposit and it was a great experience.
“I ordered a model Y online in 5 minutes with a credit card deposit and it was a great experience.”
This is part of what’s killing the legacy automakers. The state franchise laws need to be abolished, but they cannot be abolished.
Yes, Hyundai is coming on strong. According to registrations, it was #4 year-to-date through Q3, with a share of 4.8%, behind GM and Ford. But in Q3 itself, it might have surpassed GM and Ford. And it will certainly surpass GM and Ford next year, because GM will lose the Bolt, and Ford is cutting back.
Nice commentary. I think this is a socio-economical phenomena. When corporations become massive in size, they operate in a bureaucratic structure like (or even more than) governments. The semi-independent entities inside them resist to change, even though the board tries to push towards the change (like the former Ford CEO was fired by the board because he didn’t invest enough in EVs and autonomous driving). This is a general global phenomena, but quite strong in the American culture, I think.
Hence, it seems unlikely that the legacy automakers can survive the EV transition. Just remember how Motorola, Nokia, Sony, Ericsson, once giants of electronics, became niche retail sellers after Apple, Samsung, LG made the transition to smart devices. I think similarly, most American, Japanese and European legacy automakers will slowly fade in parallel to ICEs, while they are waiting and hoping that EVs will fade.
Most likely, Tesla (may be also Rivian) and small number Chinese manufacturers will thrive through the EV transition. Hyundai group may seem to have a chance, as they are close to Tesla in terms of range/price, if they can scale-up their production.
GM share buyback LoL. Last I checked they had ~$80 debt / share and would require 16 years of free cash flow to extinguish their debt.
Sales of traditional hybrid electric vehicles, or HEVs, such as the Toyota Prius, are outpacing those of all-electric vehicles in 2023, according to Edmunds.
Because of this, many automakers are cutting back on EVs and ramping up hybrids.
Wow, hilarity abounds…
Only Ford is cutting back on EVs, and it already killed some of its hybrids, including the Fusion.
Toyota isn’t cutting back on EVs because there is nothing to cut back on; it tries to use hybrids to compete with EVs. But drive a hybrid compared to an EV, and you’ll see the difference (I give you a clue: performance).
GM killed its old Bolt and will have nothing to replace it for a long while.
Stellantis doesn’t have any EVs and there isn’t anything to cut back on.
The Koreans are expanding EV sales in leaps and bounds, and they’re far from cutting back.
The German brands are all over EVs, and they’re not cutting back.
You see why this ignorant BS in the media that the anti-EV trolls cherry-pick and spread around manure-like gets so old?
It’s rather apparent that the American auto industry’s entrepreneurial business spirit to survive and thrive no longer exists.
Yeah so Toyota’s first EV was a dud, the bz4x. However it’s selling HEV’s and PHEV’s like hotcakes which will enable it to regroup and offer more compelling EV options in the future. The domestics are cooked basically due to their reliance on high profit vehicles – Stellantis looks like it’s in real trouble with inventory levels skyrocketing.
Good post Wolf. I too have been amazed by the inability of the big 3 and the Japanese automakers to rouse themselves to compete. They’ve had so many years to see where things were headed and to get it together, but they haven’t been able to really commit themselves.
Louie said it well above, “Kodak moments, all of them”
I wonder how it will work with BYD and other Chinese automakers – the BYD Seagull would be a huge seller in my neck of the woods if it was offerred for sale. But with geopolitical tensions the way they are, and the auto industry being so important, I expect some sort of official or unofficial trade barrier to be erected blocking more than a handful (eg Polestar) of sales of Chinese vehicles here in North America.
Wolf, I love your posts about EVs – you really cut through the BS and anti EV rhetoric, which, as you point out, is ridiculous. I own a Lightning and it’s the best car I’ve ever owned by a wide margin. It has a few drawbacks (towing a 10,000 trailer across country is a problem due to lack of charging infrastructure). Biggest downside is the dealer system. Infuriating middle men that take money and don’t add any value. I’m not sure the legacy makers can overcome this.
I love watching all the anti-free speech Musk haters hold their noses and buy Teslas!
It’s “selective” free speech.
Iran’s political candidates are “selectively screened”; after such time the public can vote.
Yeah, but that’s not what is bothering the pearl clutching righteous. It’s less “selective” now. What’s bothering them is that it is not “selective” in the way they want it.
Regardless, my point wasn’t to debate the value of a social media platform I don’t use or care that much about, it’s to point out the absurdly political component to people’s view on EV’s and ICE vehicles. On one side, you have a group that can’t acknowledge the obvious benefits to EV’s and want to deride them any chance they can. The other side can only see EV’s as the future and that driving one is a moral imperative, even if you have to purchase one from the devil.
I believe many people’s politics have an oversized influence on their vehicle purchasing decisions, which influences the numbers above, and which I find kind of funny.
3rd string management vs the Henry Ford of his time…..who would you bet on.
Sam Walton vs Sears….who would you bet on
Bill Gates vs IBM….who would you bet on
Ted Turner vs CBS….who would you bet on
Musk vs Ford….who would you bet on
There is nothing like having the owner running the company.
A long time ago my employer, a bank, was owned by Warren Buffett who had purchased it and retained the owner to run it. The old man (80 years of age) required us to justify long distance calls and asked why we had more than one pencil on our desks. He also brought in the first computers in town to automate his back room operations. He ran a 4.4 percent return on assets……the folks that bought it from Buffett (Buffett moved on to Wells Fargo) were the new breed of management….attended a lot of conferences in places like San Diego etc and they ran a .8 return on assets and gave themselves bonuses….until it went bankrupt 20 years later.
What are you buying when you invest…..management. The best management is almost always the person who started the place.
The “big 3” should maybe focus their efforts on launching fun to drive hybrid equivalents of their ICE… I think the willingness to adopt by customers would be much higher, and it takes the whole charging network out of things (as well as anti EV sentiment). If Chevy thinks it makes sense for the corvette, surely they could work it out for other models. If they can figure out something appealing and fun to drive it would work! The appeal for big 3 EVs has always just been terrible. IMHO.
WV is making a bit of a splash with the ID.4 totaling 11% of their US sales in Q3’23.
Call me when one can charge an EV in apartment building parking spaces. Also when EVs are no longer massively subsidized by the government. And when someone talks about EV car insurance.
I notice Wolf gives EV sales data for California, the land of fruits and nuts. I wonder about Texas, Indiana, Ohio, and flyover states in general.
As for the Big Three, I gave up on them on the 1970s and 1980s. I buy Honda now.
“Call me when one can charge an EV in apartment building parking spaces.”
There are already lots of apartment buildings and condo buildings with EV charging being offered as one of the amenities.
“I wonder about Texas, Indiana, Ohio, and flyover states in general.”
Here is the US registration data for Q3, some of which I also quoted in the article above:
https://wolfstreet.com/2023/12/07/tesla-model-y-is-2-us-bestseller-in-2023-through-q3-behind-perennial-1-ford-f-150-and-ahead-of-toyota-rav4/
My ex-wife had a charger installed for her Tesla in her condo parking place. It was not a problem. I live in San Antonio and I see Teslas everywhere.
Legacy producers find product transitions very difficult because they are at a severe disadvantage relative to new market entrants. Not only do legacy producers have to invest billions in new product types, they have to do so knowing it will cannibalize sales of existing products. Who wants to invest billions in Product B knowing it will cause you to lose billions in Product A in the short-term and medium-term? That’s a huge risk from a financial perspective, particularly when your shareholder group demands a consistent growing dividend.
The big risks are more palatable for visionaries who have nothing to lose and growth-oriented investors who aren’t afraid to lose money.
That is one way to look at it. I see it different. Xerox thinking they were only a document company or Intel missing the mobile chip market or auto makers not responding to the changing market. All just really bad decisions in so many cases when the writing was on the wall and bad management can’t read.
Bill Gates initially thought the internet was a passing fad. Eventually Microsoft went all in on the internet. EVs are different. They need supporting infrastructure, which is lacking in important areas, like apartment buildings. Many charging stations that exist are broken. EVs also need to quit being subsidized by the government (my tax-dollars) so we can see how they stand on their own two feet. Adopting the internet was easier.
True but he went from novelty to a wave in two years. Given it was a government military and educational project nobody really knew what it would become but demonstrated the capabilities of developing something in government. It did require massive investment across the board as part of that was.com boom but I remember implementing web applications in the early years and we had 60% packet loss in some cases. Everything needed massive investment to get the speeds we take for granted today that are mostly worldwide. Wasn’t a leap to see a rechargeable battery on a small scale and not make the connection. Lobbyists and big money had the power to ride the cash cow until it collapses and then play dumb and get bailed out over and over.
Glen – this.
may we all find a better day.
You sort of make my point. There are “so many cases” of large successful companies failing in the face of transformational product innovation. Did they all have bad management, or did structural considerations ensure failure?
Note how many of today’s successful businesses were startups, as opposed to legacy companies that cannibalized existing product lines. The big tech companies all started from scratch not too long ago or they grew by expanding into complimentary product areas that did not cannibalize. For example, note how Microsoft passed on developing a mobile operating system because it competed with desktop OS, but yet they eagerly invested big money into cloud, which represented a more profitable delivery stream for existing product lines. I think that’s what investors expect. They want innovation that compliments, not cannibalizes.
I thought about investing in GM, Ford, etc. based on the thought they could invest in EV production and get some leverage from existing production and distribution streams, but I decided the production and distribution streams were just too different to synergize. Any new EV businesses would be competing for revenue (from customers) as well as resources within the company. I decided to pass, luckily.
I know Intel as I was there two major things occurred and I knew one of the VPs. They didn’t see the sub 1000 coming so when Compaq released an 800 version they weren’t ready. The other was the recognition that the next technical innovation would drive the next major sales wave. However, they didn’t look into RISC or similar products and the iPhone caught them missing that boat. Unfortunate as few companies can spin up chip engineers, and especially fabs as those are billion dollar investments. I think they were mentally locked into Moores law versus the practicality of usage. Guess what, most of us have far faster computers than we will ever need.
Imagine how much worse it would be if things were run by a politburo. Long term profitable companies generally make better decisions.
Not clear why organizational planning structures of 100+ years ago are compared to today, especially in countries that were transitioning from wooden plows to industrialization. Modern computing and analytics have changed the ability to collect and analyze data. What people do with that data is another matter and generally has more to do with the institutions than the data. Wolf’s articles are a great example. We have all the data at our fingertips but who knows whether people will follow it to logical conclusions.
For those spouting off nonsense about EVs not working, a failed effort, impossible, the grid can’t handle, etc.:
First off, I’m sorry your sales are down at the car lot this month.
Secondly, keep it up! The more online BS is shared about EVs, the more they sell!
EVs are piling up unsold in dealer lots all over the United States.
The only EVs that are “piling up at dealers” are the EVs from the legacy automakers. Tesla and other EV makers don’t even have dealers, and no one can track their inventories if any. The reports of EV’s piling up is strictly for legacy automakers, but they have less than 30% of the EV market. Cox Automotive came up with that inventory BS, and I blasted them publicly and privately for not disclosing that they’re just talking about the legacy automakers, that 30% of the market. And to use that as a lack of demand in the EV market is ignorant BS. But if you want to lambaste Ford whose EVs are piling up, go right ahead, and I will cheer you on. But don’t confuse Ford with Tesla, and don’t confuse demand for Ford’s EVs with demand for Teslas and Rivians.
You don’t believe that part of the reason TESLA has been dropping their prices is to induce demand? I feel like now the things are getting more competitive, TESLA has no choice but to drop their prices in order to sell what they’ve been producing in higher numbers, and their margins are going to slowly fall into a similar range to what the legacy automakers run at. I could be wrong, maybe they have a secret sauce, but i feel their high margins were a product of being the only game in town. I also believe the legacy automakers have a distinct advantage of being able to sell ICE products alongside EV’s, which i feel demand for ICE products will still be there for many many years yet.
Wolf,
Ouch!
Thank you for the excellent rant.
TSLA bulls have been screaming for years that legacy auto is so far behind that they will go bankrupt by 2030.
Cybertruck has 2 million pre orders. Even if half of us back out. That is still 1 million pre orders and at least 3 years of CT production with profitable sales. And as early adopters are satisfied and production ramps up, Tesla can adjust CT price to whatever the market clearing price is and still make money, or at least not lose money. What if the cost to produce a CT ends up being around $35-40k? Can’t wait to find out.
The tech in the cybertruck will trickle down quickly to Tesla’s next gen vehicles. (Sub $30k sedan? Delivery van?). The new ethernet bus loop and redundant drive by wire 48v architecture and 800v fast charging HV battery.
Legacy auto CEOs were just mailed a textbook on how to implement 48v into the supply chain. Maybe they could have used some billions on that!
The fact that GM and Ford can’t think of anything to do with billions is crazy.
Build a charging network FFS! Tesla is going to be selling electricity to every customer of other EV makers for the next decade at least. In Barstow, CA at a major outlet store pit stop on the way from LA to Vegas, Tesla just installed a solar canopy over superchargers with Tesla batteries to store the solar power to charge EVs. Tesla is basically turning sunlight into $$. Every other EV maker that adopts NACS will have its customers stopping at Tesla chargers in the next few years. These are Giant FREE Tesla billboards next to highways all over the world!
Maybe people buy Tesla shares because they realize most other automakers are toast.
I’m pretty sure news of Tesla slowing down factory production is a fake out. Tesla is currently working on the sub $30k production line in Austin and will shock the industry when it comes out in the next 2 years sometime. Once the factory line is perfected, they will replicate it in China, Mexico, and Germany fairly quickly. The model 2 (or whatever they call it) will become the best selling car of all time. If subsidies persist. We could be looking at a sub $25k sticker price in California for a new Tesla with 300mi range in the next 2 years.
Remember people, battery cost and energy density is still dropping every year. Watch some Tony Seba videos. ICE is doomed. Even if you can’t tow a big load in cold weather now, with half priced batteries that are the same size and store twice as much power coming in 5-10 years, it WILL be possible soon.
Duke – “cost for INCREASED energy density”, perhaps?
may we all find a better day.
I own non tesla two EVs and this is all because of Tesla.
I used to own tesla but moved on as better EVs came to market.
But I agree, EVs are made possible because of Tesla and I like Tesla cars in general.
At the same time, EV market is going to be extremely crowded in next few years and Tesla would be one of the EV manufacturers.
OTOH: tesla share prices are extremely rich. This has nothing to do with their cars though.
Did you see the Teslabot v2 video?
Tesla thinks they could reach 1 bot per human on earth. How do you price that into the stock price today?
$10-20k per robot x 10 billion. The valuations get to be laughable. But that is why crazy share price is possible today. You are buying Tesla’s future success in their 20 different business divisions.
If the legacy automakers could make a profitable EV, surely they would. Them buying back shares suggests they don’t believe reinvesting their cash flow would net them any ROI. That’s probably true given the higher rate environment.
The legacy autos have completely different business models compared to Tesla and it has nothing to do with EV vs ICE. Legacy autos rely on suppliers like Magna for ICE powertrains and LG for EV powertrains. They hardly do any of their own engineering. Tesla has been designing and manufacturing their own powertrains since the beginning. Ford didn’t start until 2022; just in time for higher interest rates to put a damper on vehicle sales and a tight labor market to make engineers scarce.
As a GM powertrain engineer, i am not so sure about that. It depends on the area but we still do quite a bit in house actually. I am not sure what you define as an ICE powertrain, but Magna primarily sells transfer cases to the OEMs and they have done that forever (new venture gear, new process gear, etc).
Powertrain as in everything from the engine/motor to the axles. Legacies have leaned heavily on LG and others for their EV powertrains (motor, battery, etc.). It’s made them all have similarly mediocre EVs. LG doesn’t have nearly as much an incentive to develop innovative EV tech as Tesla themselves do. The powertrain Tesla developed is the secret sauce that makes their price/performance so good in comparison.
I make kitting carts for legacies, Tesla, and their suppliers. I don’t get into the weeds of it, but have general idea on who is supply which components.
I would agree that on the EV side, things are way further behind Tesla. Good info
The Legacy car makers where never going to be able to compete with Tesla for the simple reason that there are not likely to be any revolutionary breakthroughs in battery tech. A new battery chemistry takes 10 years to go from development to large scale production.
Battery investments demand both MONEY and TIME. Ford and GM perhaps had MONEY to throw at it, but not TIME.
The only real threat to Tesla will come from China where some obscure darwinian fueled enterprise might crack the solid state battery problem and rollout some solid state battery with higher energy density that can be mass produced.
Absent that, Tesla will be persistently 5 years ahead along the curve of 3-5% battery improvements every year enjoying the tech equivalent of compound interest.
It was clear to me that the legacy crew would fail when it became clear that they would neither invest in their own charging network nor in their own battery development efforts. Then we learned from folks like Sandy Monroe that neither did they invest much engineering effort in temperature management around their battery packs….
At bottom: an enterprise controlled by “professional management” cannot compete against an enterprise that is “owned” by a human owner.
I believe Tesla got an early start and their strong bet on all electric has paid off. To think they own some breakthrough technology regarding batteries or automotive tech in general….I am not so sure. In time i think we will find they stumble across worthy competition with similar range and possibly even price points. That is hard to predict but i do not see Tesla as having that big of an advantage long term. Why do you? They have been able to build and sell lots of EVs with huge margins, because the demand was there and the supply wasn’t. Thats changing now, I will be very impressed if something doesn’t give. Elon Musk is not a superhuman nor is he the founder of Tesla. Tesla has been highly prized by wall street for a long time, and that has enabled a lot of their business methods / funding. Time will tell if that will continue as it has. I am doubtful they can withhold such a high PE.
a couple of factoids today:
The charger is in the car. What is commonly referred to as a charger in fact is its just an electrical source. A Tesla, and perhaps others can plug in to an ordinary 110 volt outlet; and some folks regularly do. The charge rate is about 4 miles per hour so about 50 miles overnight. A bit slow but I know of one person that commutes 20 miles per day and that works for them. And home electricity is the cheapest there is. He can still utilize a supercharger should he ever take to the road.
Louie,
You are correct. Teslas have an in-car converter to take your home AC and switch it to DC for the battery. That can be 110 as you mentioned or 220 on a 50 AMP circuit which allows for about 30 miles per hour of charge. That’s how I’m set up. Tesla also sells a home charger (as do several others) that does the AC to DC conversion and offers a slightly faster charge.
Tesla is falling for some of the engineering short sightedness suffered by the legacy auto makers. The best feature of the new model 3 (not out in the US) is a 300 mile battery on the standard model up from 260. There are minor headlight and taillight changes. The biggest news is inside the cabin where turn signals and shifting will both be done by push buttons. Remember push button shifting in the old 1950s Chryslers? History repeating itself.
Wolf: I appreciate your “loyalty to facts” approach in the way you write your articles and also the commentary on comments. Here is my 2 cents on EV/ICE and let me know your thoughts.
1. Every ICE Vehicle sold is an EV Vehicle not sold.
2. Every legacy ICE maker either reducing EV production or abandoning EV production is inturn, capacity maintained and/or gained by ICE vehicles.
3. Every legacy dealer pushing customers away from EV vehicle is another ICE vehicle sold, and another EV customer lost for 3-7 years.
Given the above 3 variables, no matter how much TSLA increases its sales numbers or other cheaper Chinese EV makers enter (depending on geo-political scenario) and try to increase EV sales here in US, mathematically, EV vehicle surpassing ICE Vehicle sales volumes is not feasible/probable in the next 25-30 years in my opinion. I would appreciate your commentary.
You do the math in terms of your forecast of parity of EV-ICE in “25-30 years”:
In 2023, 1.1 million EVs will be sold, and 14.4 million ICE vehicles.
ICE vehicle sales plunged from 17 million in 2019 to 14.4 million in 2023.
EV sales soared by nearly 400% from around 220,000 in 2019 to 1.1 million in 2023.
2019 = 17 million ice
2023 = 15.5 million ice & EV
ice…ev..moonshine…numbers look good for the no car for you group.
You are looking at it backwards.
More cities (Ann Arbor) and even states (New Jersey) are requiring new multiunit housing to provide a percentage of parking spaces to be EV equipped with additional percentages of spaces to be EV ready and equipped for later complete EV installation. Some towns are requiring EV charging master plans in anticipation of future increased EV adoption.
A problem is that builders like to over build and skimp on parking, and equipping spaces for EVs means a reduction in the number of spaces.
One should not regard new multiunit EV charging as an amenity, but rather as a requirement that planning commissions and zoning boards should require.
Yes, it makes total sense. Back in the mid 1990s, my uncle who worked for the FBI, built a “smart home” and had it all wired up with Cat5 cabling in every room. Nobody understood anything he was explaining regarding connections and LAN. This was also the guy in the family with 2 beepers, a car phone and an early suitcase cellphone years before. You have to PLAN for the future because retrofitting is VERY expensive. My career consisted of retrofitting bridges and roadways built 100+ years ago. Today, we design bridges and roadways anticipating future needs.
These apartment buildings and new developments are ANTICIPATING the EV growth.
Nunya – the eternal struggle of ‘anticipation’ vs. a countervailing belief that this (or the recent past) is the best of all possible worlds (and will never change…).
may we all find a better day.
When looking at the Cybertruck, I see a silver Pontiac Aztec. Just me?
Back in the days, Aztec was considered the most ugly car.
Just you. There are 2 million people on the waiting list to buy one. There is huge demand for this thing.
Looks like Wolf may have forgotten about turning off comments on EV articles for this one. Counting down in 3, 2, 1…………comments off!!!
Hopefully not, the back and forth is fun, and the comments are very insightful.
Too late, I already spent five hours moderating the comments and weighing in. Not gonna stop it now, LOL. This is the concept of “sunk cost” that’s so hard to grasp and deal with.
Disparaging comments are not helpful. But maybe, this is the new way of debating; I am going to have to get use to it.
I have worked in the automotive industry and have kept many acquaintances in the field. There is a huge debate as how to improve the range, charging time, electrical grid limitation and lastly production of electricity. Even the “very pro EV” European Union is ringing the alarm bell and is demanding more investment in infrastructure from the countries (which have difficulties closing their budget!) to accommodate the development of EVs. For auto manufacturers, I can assure that these problems are not your BS anti-EVs.
These companies are asked to make enormous investments without a clear view of the future.
San Francisco, which probably has the largest % penetration of EVs of any city in the US — EVs are absolutely everywhere — also has a famously old power grid, eternalized right here on Wolf Street by the periodic updates on the 100-plus year-old utility pole a few feet from our balcony. The power infrastructure in SF is ancient.
And EVs have caused zero issues on the SF grid because most people charge EVs at night when there is a very low load on the grid, and lots of idle capacity; and electricity is cheaper too (time of use pricing).
In addition, utilities love EVs because they’re able to sell more electricity, increase their revenues and profits, and the price of their shares. And due to the higher revenues, they can invest — that’s the utility model: borrow $1 billion cheaply via 10-year or 30-year bonds at the low rates utilities have to pay, then invest that $1 billion in power infrastructure to make a nice return for the next 30 years that exceeds by a wide margin the bonds’ interest cost. That’s how utilities make money.
People need stop spreading dumb BS about EVs and the grid.
Here is the utility pole off our balcony:
The electrical equipment looks fine…..it’s the pole that needs replacing!
…demonstrating the practical superiority of relying on ‘old growth’ timber (no doubt a recurrent explanation from PG&E management) …
may we all find a better day.
Wow, does the Smithsonian know about this?
“Tesla’s shares are still ridiculously overvalued”
That may be, but maybe consider that you are buying not just a car company, but a general engineering company that could sell products outside of automotive.
They have that new ‘Optimus’ humanoid robot that looks pretty good. Musk is saying that the market for his autonomous ai based robots will eventually be bigger than the market for his electric cars (he expects to make more selling robots than cars down the road).
Maybe that is what makes the share value what it is. All the other projects and products down the road besides cars maybe will add a lot more value. Like Amazon when they first started selling just books. But then they moved into AWS cloud, other products. Prime..etc..etc down the road.
Curious what you think about hydrogen powered cars that Toyota is still hankering for and there is Biden’s investment $$ to create hydrogen hubs?
Another point that provides an unfair advantage to Tesla is it has no union workers unlike legacy auto that has to deal with union contracts that add on to labor costs?
A common refrain I hear is range anxiety that makes a certain ev buyer wait for battery range to improve.
GM stopped selling the Bolt in the US in part because insurance companies stopped giving coverage. Fender benders resulted in slight battery damage, which cost more to repair than the car was worth. It’s just a poor design.
What a pile of anti-EV BS. It never stops, does it?
MoneyGeek, Nov 2023: “A Chevy Bolt costs $1,584 a year on average to insure. If you’re looking for the most affordable car insurance, comparing different providers’ rates is essential. For instance, State Farm offers the cheapest annual premium for full coverage at an average of $1,196, while Progressive is the most expensive at $1,993. State Farm is also the cheapest for minimum coverage policies at $493 per year, while Nationwide has the highest rate at $768.”
Anthony A, who frequently comments here, has been discussing his recent purchase of a new Bolt in Texas including above, , and he insured it without trouble.
That said, auto insurance is ridiculously expensive, and rates have jumped all around over the past two years. We just got the new premium for 2024 for our non-EV, and it’s expensive, and it jumped, and we hate it.
Which is why the CPI for auto insurance is up 19.2% year-over-year, see table of core services CPI above.
I just got my insurance premium for my recently pur 2020 Tin Can Mitsubushi Mirage ICE vehicle. $800 for 6 mo.
My insurance cost for the Bolt, full coverage (collision/Comp), 250/500 K liability, UI, towing, etc, is $1425.00 for 11/1/2023 – 10/30/2024.
And that’s in the greater Houston, Texas area where rates are high.
Wolf,
The story about Bolt insurance was relayed to me by an owner of a Florida Chevy dealership. I’ve heard the same from an experienced Georgia insurance agent tonight. States regulate insurance so I expect California is different. However there are almost no Bolts in either state. I’ve seen tons of tesla, rivians and leafs but not bolts. I could still be wrong but I expect their is some truth to my initial comment.
Jeff
Ford is following the Radio Shack business model. Abandon your customers. Plow all your money into stock buybacks until the stock goes to zero. Then file for bankruptcy.
I often wonder how large corps come to some of their decisions. It seems that when a corp gets large enough and loses its founder’s direct influence, be it a person or a family, it also begins to lose its direction and focus? Musk still has his influence and control. GM and others have boards without that driving influence and control. In other words someone to step in and say “NO” at times.
But then, maybe I’m just seeing things.
Any idea what the difference is for the franchise owners profit for the total life of the vehicle between ICE and EV? I can’t see them making much money from servicing EV’s or wanting to cover the cost of retraining of mechanics
They’ll make money off the older ICE vehicles that’ll be out there for decades. But eventually, it’ll be problem. Same with the oil-change chains, etc. They will still do tires and windshield wipers and that kind of stuff. Maybe brake jobs occasionally on old EVs.
DM: Tesla recalls more than TWO MILLION vehicles – nearly all its cars sold in US – to fix system that monitors drivers using Autopilot after series of deadly crashes
Tesla is recalling nearly all of the vehicles it sold in the U.S, more than 2 million across its model lineup, to fix a defective system that’s supposed to ensure drivers are paying attention when they use Autopilot.
Sep 2023, ICE Vehicle recall: “Kia and Hyundai Issue Recalls for 3.3M Vehicles, Advise Owners to Park Outside“– The vehicle’s anti-lock brake system module could leak brake fluid internally and cause an electrical short. An electrical short could result in significant overcurrent in the ABS module, increasing the risk of an engine compartment fire while driving or parked.
https://www.nhtsa.gov/press-releases/consumer-alert-kia-and-hyundai-park-outside
March 2023, ICE vehicle recall: “Ford is recalling nearly 1.3 million vehicles across the U.S. because of safety issues with their brake hoses, according to documents from the National Highway Traffic Safety Administration (NHTSA). It’s also recalling about 220,000 F-150 pickups due to faulty windshield wiper arms.”
Mar 2022, ICE vehicle recall: “BMW will recall 1.03 million worldwide over potential fire risks, the German automaker said on Wednesday, its third recall over the issue since 2017.”
Why did you not drag these and other big safety-related recalls for ICE vehicles into here? Big recalls, including over fire danger of ICE vehicles, happen all the time. Why are recalls only dragged into here if Tesla has them? That’s part of the anti-EV-trolls BS.
Some recalls are not the same as others. I never had a recall on an ICE vehicle where i did not have to make an appointment at the dealership, take the vehicle in and wait to have it repaired, OR, come back a second time when the parts were available.
Tesla has had several recalls since purchase in 2020. All have been done “over the air” while I was sleeping. this one will be done that way as well.
Not all recalls are the same, that is for sure.
Every single ICE vehicle I owned since the 1990s, except our current one, has had recalls, including my Infiniti and BMW. If you check the recall notices being issued, you will see that they truly happen all the time. Some are minor, some are huge.
“the Wall Street Journal, which years ago has turned into a prime anti-EV rag,”
I have to disagree with you here. As a daily Journal reader, the WSJ still loves EVs and anything else it perceives as green tech.
The WSJ hates Elon Musk, and that started years ago when he jumped off the Democrat bandwagon and rapidly accelerated after he bought Twitter, making it no longer a liberal echo chamber and safe place. The Journal has 3-4 negative articles relating to Elon/Tesla per week, and the readers call every one of them out.
Even Dan, the car review guy, smeared Elon and Tesla in his unlreated EV auto review last week, and commentors called him out.
Wolf: you mention anti-EV B.S. Frankly I’m surprised there isn’t more of it. In addition to buggy whip manufactures already being out of business, try automobile dealer ships. Muffler Manufactuing and their franchises, radiator manufacturers, spark plug manufactures, fan belt manufacturers, and all associated franchises, repair shops, suppliers etc etc adnausiam.
then there is the petroleum industry and associated service stations and beyond.
Too many comments to read so I’ll just leave a couple and hope it’s not a repeat.
Tesla was able to bypass dealer franchise laws with an exemption, as you said. Were Rivian and Polestar also able to do that? Can other startups also go that route in going after the low cost EV market? It would be nice to see the equivalent of a bunch of “low cost carriers” similar to the airline industry to transform this industry too.
I went to lunch yesterday (Tacoma, WA) and saw 3 different Rivian SUVs. I thought they only made weird looking trucks. I was interested enough to look them up but the near 6 figure price tag ended that. Glad people have that kind of money to waste. Maybe as they scale up the prices will come down a la Tesla. Anyway, don’t sleep on Rivian, they appear to be catching on.
Amazon is buying 100,000+ of those vans. It doesn’t pay retail price. Fleets pay a whole lot less.