I am sure that I don’t have a good understanding of the global automobile industry but I have to credit this channel for its cogent and well thought out commentary. Mainstream business media included.
Normally, I agree with your position on most matters in the EV industry but not this time. I believe the slowdown in EV production by all manufacturers except for Tesla (and BYD to a lesser degree) is being driven by the inability of these manufacturers to profitably produce EVs. To keep this bleeding of cash under control, the simplest solution is to limit EV production while they develop more efficient production methods - like using the giga presses as Tesla does. To put it more succinctly, legacy auto must be careful they are not crushed by Tesla. Legacy auto has dividend paying shares and they cannot allow any jeopardy to that position. Tesla is still growing its production quickly, albeit a little slower than last year. The Mexico factory was delayed because a decision was taken to conduct the engineering design of the Model 2 in Texas where engineering resources are readily available. The new production methodology to be used with the Model 2 will also be developed (again resource availability) in Texas which allows some delay in buildout of the manufacturing facility in Mexico. Also, Tesla announced today that they intend to put a Model 2 production line in Berlin. With reference to Toyota getting serious about EV production, this was good to hear but they have a long way to go to catch the leader (Tesla). Tesla is a much more efficient producer of EVs than any legacy player and many of them have been trying to catch up but cannot.
Toyota has a long way to go to catch anybody, maybe they'll do it, I think the most important component is dedication, not stepping in backing out repeat. I'm skeptical about model 2 release date and price, the thing I hadn't even considered is it being released everywhere else first, not coming to USA for years after
This. Legacy auto makers don't have the infrastructure to make EVs cheaply enough to make a profit. They are many years behind Tesla and Chinese EV auto makers, which have both been pouring money in research and development for a couple of decades now. Legacy auto makers are now in the Valley of Despair, where they have to get to the other side, but they have to take years of losses to do so. The legacy auto makers procrastinated doing what was needed early, and now that the industry is ramping to meaningful numbers, they appear to be ... procrastinating again.
@@user-cq9fq4vm4b There's also just very limited demand for EVs in a practical sense. A lot of people like the idea of owning an EV, but the practical reality for them is that it just won't work for them. PHEVs are just a way better solution for most households, at least in America. Plug it in overnight, drive 30-50 miles without gas (possibly covering all of their driving for the day), but still have the ability to use gasoline for longer trips and during periods of more driving. You get something like 50-80% of the benefit of an EV, but you only need about 20% of the batteries, basically none of the charging infrastructure, and you get none of the downsides. We could make huge reductions in CO2 emissions transitioning rapidly to PHEVs, much more quickly than we could get the equivalent gains with EVs. Right now, full EVs are just not the move.
The automakers scaling back are the ones that didn't think big enough. They thought they could do business as usual and have hundreds of suppliers. They thought they could rely on third party charging networks without needing to put much input into them. Nope, not the same thing. Business as usual won't cut it if they wanted to keep their millions of customers especially if they themselves are the ones that had been poopooing EVs the last couple decades. Toyota could have been a leader, but even with their Hybrid experience they keep downplaying EVs, (mainly why I went from 3 Toyotas to 3 EVs in my driveway, none of which are Toyotas). Even with Toyota jumping in late, they've lost a lot of loyalty among early adopters (horrible BZ4X sales show that). These companies are in the mindset of: "short term gains over everything else" where they should be thinking: "Short term pains for Long term gains"
Corporations no long care about short term profit or long term profitability, all they care about is stock price and executive bonuses for keeping a high share price.
I think Toyota will not jump into EV's until public DC charging networks are much easier to use and a lot more common. That's still a couple of years away, even with Tesla installing "universal" Supercharger V4 chargers.
10, the number of hybrid cars that Toyota can build for the resources needed to build a single BEV. So this means an 80 to 90% production volume and firing 80 - 90% of its workforce.
This is the wrong title. The correct one would be "EV Production Plans are being scaled back by all (and most incompetent) legacy automakers, but not by Tesla and the Chinese and see an increased opportunity
Except, if you watched the video, you’d see everyone is suffering to some extent. it is so tiring dealing with people who don’t bother to watch - Nikki.
They did mention that Tesla is having 2ed thoughts about "Gigamexico". The Tesla influencers were pinning their hopes on the $25,000 Tesla a few months ago. Before that, all the Tesla fans were betting on India, not Mexico as the new gigafactory.
@Frank71 Not to mention that the cybertruck is morphing from a stainless exoskeleton large truck vehicle, to a unibody skin to bolt to a Model Y skate.
The EV charging infrastructure is nowhere near ubiquitous enough and the fast-charging billing rates are killing most of the hypothetical savings for people who don't have the option of charging at home at off-peak rates or plugging in at school/work. I borrowed my mother's Bolt EV for a little road trip last month and while planning where to charge, I found out that there were only 50kW chargers along the way. And at my first stop, I found out that those chargers are limited to 125A, which meant the Bolt could only get 44kW out of it... then I found out that the Bolt's charging speed dropped off from 44kW at 60% to 20kW at 70%, wasn't expecting that until 80%. Between the horrible charging speed and by-the-hour session billing, this is worse highway mileage per dollar than my 2011 Focus. As for Toyota building a battery factory, future vehicles will need batteries no matter what the rest of the drive train will be like: hydrogen fuel cells cannot do regenerative braking, neither can any sort of ICE. Everything that isn't a pure-BEV will become some sort of hybrid in the near future and every hybrid will need a 10-20kWh battery pack of some sort. Makes sense that Toyota would need a battery factory no matter what its future plans are.
I have heard this argument, but it has no basis. Most charging is done at home and whenever you take road trip you plan in little advance and agreed, it takes slightly longer compared to ICE, but that shouldn't stop adoption, especially as a second vehicle. Also Bolt has this limitation for DC fast charging, but most other make support over 150KW fast charging. So, when you charge 95% at home, the fast DC charging cost is irrelevant.
Now you can see why Tesla with its charging network and charge rates up to 250 kW is dominating. Bolt good for a second car used for commuting but not a real road trip car.
@@swainp2012 The vehicle being able to charge faster does you no good when most what little patchwork charging infrastructure exists along your road trip only does 50kW with a 125A/400V limit that makes it effectively impossible to actually get 50kW out of them.
@@teardowndan5364 As is local travel accounts for approximately 87% of all daily travel in the US. So yes ICE has a range advantage over EV for 13% of US travel. That is shrinking. Batteries improve and more chargers are installed daily. The average daily installation rate of EV fast chargers in the US is now closer to 40. This rate is growing about 50% per year. It is not hard to imagine horse lovers saying the same for gasoline availability in the early 1900s.
Thank you for the update, Nikki. The current economy is pretty brutal. I'm hoping inflation gets tamed but I also hope wages catch up with increasing cost of living. It's a vicious cycle out there and hopefully it is short lived.
As a shareholder and custodian for my minor daughter (she agrees, almost 16, so we make investing decisions together), I am MORE than willing to give up some profits (especially short term profits- long-term investors anyway) for there to be investment in EVs. We especially feely this way if it just means LESS profits, no losses.
Are you willing to put up with 17 years of losing billions of dollars yearly before you even see a single dime of that investment? Your daughter would have graduated before you see enough of a return to afford paying for a semester of community college.
All major auto makers are already deep in debt. Usually, their debt is a multiple of their cash. Imagine having to pay interest for all this debt… The only company that has wiggle room is Tesla. They have about $26B in cash and maybe $4B in debt.
@@billcichoke2534That's right! Regurgitate oil industry FUD! ICE is only better because the USA has allowed the oil industry to spread disinformation and maintain their power! Energy independence should be number one priority, and the only way that happens is to say screw OPEC, Russia, and the entire Middle East by switching to EVs.
Well thought-through video. A couple minor notes 1. Some of the larger money-obsessed investors are the pension and other retirement funds; these tend to be conservative (and quiet) 2. How much Boards of Directors actually represent shareholder interest is an open question, especially when it comes to executive compensation, very much an insider's game
I'm pretty sure this backtracking on EV production has been the plan of legacy auto makers all along, at least it was the backup plan, but seeing how poorly the shift to EV manufacturing was handled I now say it was the primary plan. The backup plan, if people jump on their EV train and they were to see sales numbers like Tesla's, then they would follow through and invest in those factories and supply chains. But they stuck to the main plan: 1 - Maker grandiose claims that they were going to invest so much and take over to rule the EV market. 2 - Build a few poorly designed and manufactured models in limited quantities. 3 - Start releasing earnings reports saying they are loosing thousands on every EV they sell, in some instances claiming they lose more than the EV cost to build. 4 - Use step three as an excuse to raise prices beyond reasonable levels. 5 - Feign surprise that their poorly built, overly priced EVs aren't selling as they expected. 6 - Make false claims that their poor sales are the result of the market not wanting to buy EVs, they will never be reliable vehicles, and the manufacturing cost made them too expensive for most people. 7 - Build a massive media campaign to announce their backtracking on their EV investments, claim that EVs are never going to be sustainable, and create a huge smoke screen showing EVs as negatively impacting the vehicle market, all designed to cripple the growing demand for EVs. 8 - Hope it works and Tesla doesn't force legacy auto makers to shut down altogether.
I was thinking the same thing, purposely making EV's painful to drive to kill them off for good. Tesla can charge a 60kw battery to 80% in less than 30 minutes, chevrolet can't seem to push 50kw into a bolt with a 66kwh pack for longer than 50% SOC around 30 minutes before ramping progressively. The EV apps of legacy autos compared to Tesla is a joke. This is similar to the hubby bleaching the colored clothes so he'll never be asked to do laundry again.
Don't blame Tesla. If US legacy automakers had their act together they could be outselling toyota Corolla's. But they are too inefficient. They are their own worst enemy. I want to hear from Ford and GM where they can produce any given car for significantly less than anyone.
Of all that long list you missed the biggest one of all -- DEALERS. They'll never catch up to Tesla as long as the dealership monopoly is allowed to exist.
Interest rates are nowhere near the highest in living memory. 6% on a mortgage is not high, it is normal. People have just gotten used to virtually free money since 2008 and they think it is normal. The introduction of EV's has virtually doubled the price of a car. Case in point Mini Convertable £25,000 Mini Electric Convertable £52,000.
"The introduction of EV's has virtually doubled the price of a car." Inexpensive products are a result of large scale production. That mini EV convertible cost the maker considerably more than they charge for it. Tesla Model 3 and Model Y have been reduced by about 20% since their introduction. Tesla has scale and Tesla is making money. This is not a problem with EVs but the nature of the change over. At some point EVs will cost more to build than they can sell them for.
Toyota considers "EV" as Hybrids so the battery plant you spoke of is for more batteries for their hybrid vehicles and a very small fraction of BEV's. They already announced that they are developing solid state batteries for their next generation EV's, but then again they also said that in 2003, 2008, 2013, 2018 and more recently in 2023. One can wish I guess!
The root of most issues in the US goes back to the US Congress. They are the law makers and some would say breakers. Over the decades, some might say centuries, we have allowed money to be a big part of how you get a seat in the US Congress. In the past fifty years we have really made it so that you must have lots of money to run for office, which means you have to join a political party. Once you are part of the party, you have to do what the party says or you get funding pulled. Very hard to be a true independent and get above local offices to any national office of power. Making it so getting a national office position require tons of money has naturally given power to the elites. The elites run the Wall Street casino that so many executive pay packages seem to be tied to. Back in the 1980's, this was when the pay a CEO in stock options really got traction. By the 1990's, you could see executives making moves that were clearly driven by short-term thinking. Cuts in labor and selling off assets were the most common tactics. The business world we see today seems mostly focused on quick money. SPACs, which mostly have hurt retail investors, have had little US Congress over sight. They like to focus on non-business issues, because that is good distraction and the elites do not like be bothered by our law makers. Notice how little coverage of the new speaker of the house seeking major cuts in funding to the IRS has not gotten a ton of attention. That is also how the elites like it, under fund the IRS, let businesses do what they want, pay little in taxes, and keep the masses busy focused on things like abortion rights. Not say abortion rights are not important, just saying the elites like it when people focus on that over things like better funding for the IRS, stricter over sight of stock markets, etc. We are badly in need of major reforms in the US. Founders did want us to make changes. This notion the US Constitution is set in stone never to be updated is foolish. They also did fear the idea of just a couple of political parties being in power. The mess we are in was not built over night and cannot be fixed over night. Protecting voting rights, getting money out of politics, fixing these horrific voting districts designed to keep the two parties in power needs to happen. Many have forgotten about Citizens United, which was awful and still stands. The EV space is just one of many areas that to truly get fixed and give the nation a better future, we have to hit the very root, which the US Congress and our political system in general. GM and Ford backing off on EVs is just what China wants. Americans being anti-EV plays right into their hands. If World War II is an example of how to win, then allowing the Chinese to be the most dominate manufacturer is handing them the ability to rule the world via force, let alone economics. Not going EV in the US keep OPEC in a strong position to screw with the US economy. Many blame conflicts around the world on oil interests. The US will be stronger if we get off of fossil fuel, but those who love short-term profits do not care and they are driving many of the business plans right now. It is really sad.
One of the things that concern me is the legal requirement for a publicly listed company must put its shareholders first.. that's just asking for trouble..
I feel media response to oem's scaling back is overwrought. Funny enough many in the Love Tesla community criticised a company like GM for introducing what they saw as too many EV models unlike Tesla that they saw as wisely concentrating on fewer models. At the time, these Tesla fans praised Ford for limiting its EV manufacturing to Mach-E, Ford lightning and the transits. Tesla fans were encouraged by Sandy Munro's assessment of Ford as the most likely of the OEMs to survive EV transition. As it turned out, GM's many more EV models has been a slightly better strategy for GM than Fords strategy was for Ford. Anyway, my overall point is, GM scaling back on its EV manufacturing is really no different to what many of its critics advocated earlier on. GM is going to concentrate on fewer models and slowly ramp up.
Plus, for many the choice is Tesla or someone else. If you don't want a Tesla, that only makes a sedan style vehicle, you may just decide to buy an ICE vehicle this time and then go EV in 3 to 5 years.
You do realize that the $8B Toyota just announced is going towards battery production is primarily for PHEVs and HEVs right? Only a small portion of it is planned for BEV battery production. (At least that is what I read.)
Bard says according to a Toyota press release the cell factory would have 4 lines for hybrid batteries and 2 for BEVs. BloombergNEF states that the factory will produce 120 gigawatt-hours of batteries per year, with 80% of those batteries going to BEVs. Plans may have changed or BloomBerg may have gotten it wrong. With battery mineral prices falling the cost advantage in building a hybrid should be evaporating.
Hydrogen for cars is basically dead. There are far fewer places to fuel a hydrogen car than to charge a battery car. And, you can't work around that installing your own hydrogen fueling station at home. On top of this, hydrogen comes at an insane cost, equivalent to something like $20/gallon gasoline, compared to home-charged EVs, which are cost-equivalent to around $1/gallon gasoline. And, of course, the amount of energy required to make all that hydrogen cleanly would vastly exceed the amount of energy required to charge batteries to drive the same cars the same distances.
@@Frank71...dealers can only get markups as the market will bare. Legacy manufacturers don't like pricing new models high, then lowering their pricing later (like Tesla) because it means used car values drop quickly relative to msrp, pissing off their best customers. Only Tesla has a loyal following of customers who don't mind getting screwed by the manufacturer, as opposed to the dealer. If you pay over sticker, you know (or should know) you may never recoup that money, but you still want the car.
@@AudiTTQuattro2003 If you pay over the sticker you may never recoup that money. So your are so loyal to the brand that you don't mind getting screwed by the dealer. Not that different, really. Tesla buyers are extremely regular people compared to other buyers of new cars. They are not an alien species or a weird cult. How can I say such a thing with confidence? The Model Y is the best selling car on the planet. These are normal, boring, ordinary people. Unremarkable. Regular. Granted, this was not true five years ago, but pay attention when the times change! The most average, dull, run-of-the-mill people in the world often buy a Tesla if they have the money to buy a new car.
Apart from the high purchase price, another factor that makes me unwilling to buy an EV at the moment is the rapid pace of technological development. I really love the idea of EVs and the technology and think they are a viable alternative to ICE cars right now. But if EVs with solid state batteries, much greater range and significantly faster charging are indeed going to come onto the market in, say, 4 years, what will that do to the resale value of a current EV. It could be devastating. I would think about leasing, but not buying for the foreseeable future. Or what would be even better would be a greater number of EVs in car sharing schemes.
You can do what you want but as someone who follows the space closely, I can tell you that solid state won't be available for another 10 years plus in anything other then a super expensive luxury car. We won't likely have anyone having small scale solid state until 2028 or 2030 and the price at first will be much higher per KWH, necessitating the need to put them in only the top end models.
This is very much what happened to Kodak. They had such incredible profits on film, it never made short term business sense for them to shift to digital. Instead, they did everything they could to make the film business last a little longer, until it couldn’t. Then they collapsed.
Elsewhere another commenter, sorry I do not recall your handle, made a solid case why this is not the case. Kodak was making the actual image sensor chips. But was crushed when Japanese companies marketed less expensive versions. The digital camera market was growing. Higher pixel cameras replaced lesser versions. Digital camera market exceeded the film market but 200 of them were not using the Kodak image sensors.
Toyota announced the NC battery factory back in 2021 so I wouldn’t say this is out of no where. At the the same time your general framing is correct because their recent battery factory expansion announcement is with a backdrop of many other autos slowing/pausing their investments. Thanks for your usual in-depth coverage and analysis!
Toyota is also the only big importer of cars working through a distributor in the US, so the margin (profits) on vehicles here are much less than anywhere else in the world. That means that their focus for profitability is on the rest of the world, not the US.
The relatively simple answer is that traditional automakers EV offerings are far more expensive, and lacking in technology, compared to Tesla and some of the Chinese brands. People are waking up to the fact that (for example) a Mercedes EQS @ $100,000+, is technologically inferior to a Tesla Model Y @ $50,000 (or less). The same is true for all other traditional automakers.
Nice, thoughtful video. One of the factors that threw automakers off was the ICE parts shortage over the past few years. That caused ICE shortages and massive dealer markups that made EVs price competitive. Thus, those people on the fence thought "hey, I can buy a Tesla for less than a massively marked up ICE car". Thus, the ICE shortage and restoration of the tax credit for Tesla artificially increased demand. Now, with more ICE production and all those on the fence already owning a BEV, there are very few people who want to buy a BEV, even with the generous tax credits and lowered prices. Toyota, on the other hand, can't build hybrids and PHEVs fast enough and they sell like hotcakes. Toyota was right. The near future are hybrids and PHEVs, not BEV.
Still can’t buy a Yaris cross PHEV or a Prius Prime where I live. Well, I can order one with a 2025 delivery date. No Camry of any kind. Toyota is a huge disappointment both in its public image and its product
Thank you Nikki and thank you Transport Evolved Team. In my opinion, EV adoption falls mainly on the out of pocket cost to the consumer. The market for the $50-100k price range is one of the lowest. In order to succeed, manufacturers need to build for the consumer in the $12-20k price range. Almost 20% of Americans are on Social Security, if a retired senior citizen cannot afford a new car, almost 1/3 of the population is then not able to buy at all. Corporations around the world need to focus more on the economics of the consumer being able to buy their product more than the share holders profits. If you are not making $110k/year, you are NOT middle class. 🏎🛻🚗🚐🛣
I wish my job would pay for bus passes but in my state, there is no statewide bus system, it’s split between the municipal bus systems, usa coach, Amtrak, greyhound. It’s a mess and I wish they’d figure that crap out. That would be an extremely worthy investment imo
Like you said I just…. A $12k car is outside my interest. Like literally I don’t want to spend $12k on a car that’s going to cost me another 11k a year in insurance, maintenance, and if I can’t use it, there’s no alternative 🙈
That's why Tesla will become the world's number 1 auto maker by the next decade. Legacy thought they could do what Tesla and Rivian have been working on for well over a decade now. And yet Toyota and and the other Japanese automakers think they can wait till the last minute, which is why a few of them will go bankrupt.
Who's to blame? The hype is artificial and the auto companies follow along to insure sales but to no avail. Toyota was 100% correct, gradually move to EV starting with hybrids. Build a better battery, build an infrastructure, build a sustainable plan vs the silliness we employ now. I'm sure the African kids mining the cobalt will agree.
Toyota is still bad-mouthing EVs. They have basically gone "I told you so" on the current trends. Also, I'll believe they are serious about the solid state battery when they actually start production. Until then, their announcement is just an announcement to deflect criticism.
As always, I appreciate your in depth analysis and review and the level of thought put in to your videos. A couple of thoughts: 1. Most U.S. companies have moved away from defined benefit retirement plans to the 401(k) style retirement plan that pushes the responsibility for investing in future retirement from the company to the employee - who generally has little training in such area. Hence, they tend to go with various mutual funds. The end result, is that many of those greedy investors are people like me who desire consistent returns to fund retirement. 2. U.S. industries do tend to be more short sighted than their counterparts elsewhere. Quarter to quarter returns are more important that looking out several years. 3. Also look at the U.S. oil industry - Exxon and Chevron are tap dancing away from environmental commitments and doubling down on fossil fueled futures. Note that Exxon’s recent investment is in the Permian Basin which is an area that relies heavily on fracking and its associated environmental headaches. 4. I reiterate that I really appreciate the thoughtfulness that goes into your videos. Thanks ever so much.
Invested in a 401K even though the company I worked for had a pension plan including medical coverage. That pension was taken away with a stroke of a pen by greedy new owners. Don't trust any company for retirement security, take ownership of your future and be safe.
Factors that I hear over and over again: - Charge angst. Most manufacturers are still on CCS, which has a terrible reputation. No matter how good the car is - you can’t travel with it unless you have a reliable charging network. This should change in 2025. Let’s see how it affects EV sales! - Lack of charging abilities at home. Particularly renters but also condo owners feel they have no option to ever charge at home. I myself own a home and a condo. Charger install at home was simple and cheap, but in the underground garage of the condo, there was a long distance to the power source and other complications. Cost $4500. No normal person does that… - Range anxiety continues. Even though many EVs can go 3-4 hours at freeway speed, ice car owners often claim that’s not enough. They expect unrealistic ranges and charge speeds - perhaps as an excuse for their fear of change. - Concerns about the grid. It is unbelievable how many people believe there would be mass power outages once more EVs are on the road. Scenarios are usually based on the assumption that all EVs fast charge (at home) from 0-100% at the same time. There is a lot more education needed. - Climate change denying / EVs are worse for the environment / cold labor. Few people are aware that batteries don’t consume raw materials - they can be extracted and reused to make new batteries. Similarly, Cobalt (recyclable in BEVs) is also used in the oil refinery process for desulfurization. This cobalt is lost forever. So is the cobalt used to strengthen camshafts and crankshafts. - The consistent belief that EV batteries die on the day the warranty ends, and cost $20k+ to replace. While it is true that early Leads and Model S had relatively frequent failures, this is no longer the case. Today, there are plenty of Teslas with more than 200k miles on the first battery. - And of course, the purchase price of new BEVs… except maybe Tesla, there is still quite a premium and people look for that first. Legacy manufacturers thought for too long that BEVs are just cars with different propulsion systems, instead of taking a first principle approach to engineering and packaging. They also offer way too many variations, which confuses customers and makes it difficult for dealers to stock the right models. Hope they learn to simplify and focus on what’s important. - And then there are the DIY people, who expect to work on a 400-800V vehicle in their garage, just as they did with their gas car. Some will know what they are doing; others fear they will get killed. Or not be able to complete any fixes. Bottom line: There is not enough consumer education, providing a great breeding ground for FUD. We all have to fight against that. Social media doesn’t make that easy; in fact, it seems to get harder and harder with channels like X, TikTok and Instagram.
Let the Chinese car makers come in and force the legacy US auto makers into catch up mode just like what the Japanese did in the 70’s. Let’s go for free markets, baby!!!
Share holders don't care that much about making money they care more about making ever increasing amounts of money and the promise of that increase to increase itself in the future exponentially. Additionally so many companies working on making EVs are also reacting to teslas massive share value and not wanting to be left in the dust when EVs take over. The legacy car makers need to prove to the market that they can make competitively priced EVs or risk investors seeing them as on the fast track to irrelevancy. Making unprofitable and unpopular EVs proves how much they're already behind. Also you can't forget the hidden forces of the fossil fuel produces, refiners, etc. who are unbelievably rich and are fighting for there existence, if you saw how the tobacco industry has fought over the past several decades to a scale back this fight will make that look like absolute nothing.
We need higher CAFE standards. Get petrol to 100 MPG equivalent for cars, 60 MPGE for small/medium trucks, and 40MPGE for heavy trucks, with stiff fines or 'offsetting credits', they would howel or stop ICE and go EV, or much better hybrid.
As a shareholder in a few companies (small numbers, but some) I am willing to take small gains if I am seeing Capital expenditures(factory expansions, new factories). The “shareholder capitalism” we have now is about next quarter profits, not growing the business.
Theoretically, share price is supposed to reflect the long-term profitability (aka dividend stream) of a company, not just the next quarter or two. Or so they teach in business school. (Mind you, the big-name business schools like Wharton, which write all the textbooks, also graduate low-performing wealthy students like the Trump kids.) American shareholders do have the reputation of having a short-sighted outlook.
Lots have changed: Inflation and ownership costs (vehicle price, spare parts, upgrades, government incentives, service fees, dealership price gouging, safety feature costs), foreign vehicle tax, battery cost/range/fast charging/network link/pricing/availability, charging adapters, higher insurance as vehicles, spares and repairs are more expensive, time to repair is longer.
One of the biggest influences on the economy, if not THE biggest, is consumer confidence. It doesn't help that one party has been preaching the end of the world and recession for the last 4 years while dismissing actual economic indicators.
In my opinion the coming main problem for EVs is going to be climbing insurance rates. in Great Britain the rates are climbing and once insurance companies here fully work out the cost of repairs for an EV rates should also climb here. Personally I love my RAV4Prime maybe use half a tank of gas a month but if I get rear ended with some force I shudder to think of the repair bill.
Nikki, Your first statement, "As long as you can afford to buy one..." was the deal breaker. The EV market is unfairly inflated with no real incentive to act differently prices will not decrease much. Now, my reason for saying that is the OEM nor Tesla have much of a reason to lower prices as there is no competition in the lower price EV segment. Since we are keeping the Chinese autos out of the United states there is no reason for OEM's including Tesla to make cars that most of America can afford. This is one of the reasons that EV's demand is waning. I like you have a reservation on an Aptera and I would love to get my hands on one. At my age and issues that may not be in this lifetime as I really cannot expect production model in 2024, or even 2025. I would guess that the price will be around $35K - right on my edge there. So if the Chinese were here probably the OEM's would go belly up.
OEMs roll out prototypes then lie about everything from stats to price to production numbers. Tesla has struggled on all of these fronts as well but keeps pushing until they succeed. That’s why the model Y is the number 1 selling car in the world. But OEMs don’t have the vision. They have the data but they lack the vision. They make a halfway decent EV and it doesn’t sell iPace, iD4, MachE and rather then push to make it great they throw their hands up and say there’s no demand.
After a year trying to choose an EV to buy in the US and deciding that at this time I will buy an ICE car, my conclusion is simple... they are greedy bastards. Why? They flat out refuse to sell simple, reliable, low cost EVs. Instead they choose to make more expensive models bloated with features. Well sorry, but when we are in a transition period with technology and prices changing rapidly I am not comfortable spending money on a more expensive car (EV or ICE). And if the only simple, reliable and inexpensive cars in the market are ICE guess what car I am going to buy this year. But... there are promising new brands coming out next year. The Aptera is quite promising (although I am not holding my breath for enough production capacity to get one before 2026). And there are other $10k tiny vehicles coming out next year. And eBikes and eTrikes are booming already. So, there is hope.
I buy my vehicles for these features: Safety for the passengers, Safety for the pedestrians and all other opponents on the roads, Safety for the environment, Safety for the Economy, Low cost of ownership. Guess what i bought for my employees and me.
Agreed. I got my first ev when I got an E-bike though. But it’s ridiculous that there’s no alternatives to buying cars…. What if I don’t want to buy a car, what if I want to buy a year pass for a bus? Man i would so much rather! But that’s not even available where I am so it’s the choice between ice car and ev car also. It’s pathetic that there are no desirable options.
Some hesitation on my part is every week there is an article about some new research or some new corporate investment in massively better battery tech. While it hasn't manifested yet, I admit it has caused quite a bit of caution when it seems like EV tech will go out of date faster than phones. Plus, the transition to NACS has barely begun, there are lots of reasons to delay.
Not All new Battery tech pans out, but All Battery tech was new at one time. I'm not excited about nacs, tired of it being called elegant, how about dainty or precious. Throws early ish adopters under the bus, confuses the landscape for noobs
Why is demand soft in the US: "For EV customers, everything changes on January 1, 2024. The Treasury Department has now issued new rules that will turn the federal EV tax credit into what is basically a point of sale rebate. The new regs, published October 6, 2023, bring happy news for EV buyers." Many people would be much better off to postpone buying an EV until Jan 1st, 2024. We saw the exact same thing at the end of 2022 because Teslas became eligible for the tax credit in 2023. The economy is growing very fast.
@@transportevolved My point is that Stellantis is not headquartered in Detroit. It is not one of the Detroit three, the big three, or the Detroit big three. Stellantis owns about a dozen or more different brands, and Chrysler is only one of them. Let’s say BYD bought GM. Would BYD be one of the Detroit three or the big three or the Detroit big three? The locution “The Big Three” was developed back in the days when Ford, GM, and Chrysler were the largest auto manufacturers in the world. They no longer are. So the persistence of this locution seems kind of silly now. And so does “The Detroit Three,” since Stellantis is not headquartered in Detroit. If you’d like to persist in using something with “The _________ Three in it, I recommend “The UAW Three.”
Markets that continue to increase BEV adoption have a wider array of models available, crucially at prices well below the average BEV transaction price of mid to upper $50k in the US. It’s no different from the adoption curve for flat screen TVs. There will be only so many people able and willing to buy them at $20k, $10k, $5k each, but many more who will buy them at $1k or less each. Ditto for smartphones (though starting price points were lower). The issue for the US and Canada markets for BEVs is there are few options below $30k (not including government incentives). And it’s the manufacturers and dealers who make it so, as they want the higher margins of larger and more expensive models. Even brands that still offer more affordable models stock few of them on lots and try to steer buyers who don’t come in with a pre-arranged purchase towards more expensive models. I’m sure I’m not the only one looking at more affordable models available in European or Asian countries with envy. The flux in charging ports and bidirectional charging are also factors (who wants to buy something already obsolete?).
The Best-selling BEV in the US can be bought for less than a Toyota Camry, while the Tesla Model 3 can be had for $30,000, including the $7,500 Rebate and other state-level incentives.
@@brucemcintyre295 The prices need to be BEFORE all those incentives. It’s simple price/demand dynamics at this point. The population of potential buyers in the higher price brackets is tapped. You’ll have to wait for them to repurchase. So, to continue to advance BEV adoption, more options at lower price points need to be made available. If the current brands won’t provide them, I’d like to see brands that do enter the US and Canadian markets.
Good report but a little US centric. There a number of Chinese EV auto makers that are doing exceptionally well and starting to rise in the world market. It reminds me a little of when the US auto makers could not be bothered to compete with the cheap Japanese cars.
The first adopters have had their fill, and the rest of the world is still not convinced that EVs are for them. Despite the price drops, EVs are still much more expensive than ICE vehicles. Most places in the world still do not have the infrastructure to easily charge EVs. Plus, there have been many reports of the increased cost for insurance and the difficulty of getting EVs repaired. My sense is that we are about 5 years away from a real break-through in cheaper battery production and range. For the average American, it is just cheaper and less risky to buy a hybrid or an ICE vehicle that gets good gas mileage, than an EV. Yet despite all these short-comings, it is pretty clear that the future is with EVs. But this is not going to happen as quickly as many of us thought.
Toyota?! I nearly dropped my dentures when you said that. ...and I don't even wear dentures! This was a good overall education for me. I forgot and under estimated shareholders in all of this "garbola." During the era of the EV-1 I knew of upper level management in favor of moving forward with ev's, management conditionally supportive and management who always thought the idea was a death knell to profit (or at least starting a downward trajectory.) I stopped hearing things and felt 2/3rd's of the group became committed to fear of ev's. I just blamed management. Perhaps with a wider perspective I should have considered if we the public could have calmed shareholders use to directing the industry that ev's still offered safe paths for their profit. (How could we do that?)
Toyota is making record breaking profits with hybrids. And it is investing heavily in solid state sodium batteries, skipping the very dangerous and ecologically hazardous lithium-ion battery. Only once that's finished will it heavily invest in EV.
@@noseboop4354 And that amazing new battery technology has been just around the corner for longer than Elon has been promising robotaxis. Don't hold your breath.
We're just not ready for EVs at scale, at least in the states. PHEVs give you about 80% of the benefit for 20% of the batteries. Furthermore, everyone plugging in at night improves the reliability and efficient of the grid, since a lot of overnight capacity is wasted, but charging PHEVs at night levelizes demand and helps pay for overhead. Right now, we don't have the electrical grid capacity to go full EV, we don't have the battery production capacity to go full EV, and we don't have the charging infrastructure to go full EV. But we can get massive, massive carbon reductions within a few years by pushing heavily into the PHEV space.
If even a quarter of the exciting advances in battery technology (especially using cheaper, abundant materials) make it to market in the next few years, automakers who hold off on making large commitments may come out ahead. Of course there's lots of risk there. And of course that delays reduction in carbon dioxide emissions.
The companies who focused on making better combustion engines do not come out ahead of the companies who focused on developing cost-efficient electric drive trains in this scenario. They would have to switch to EV even quicker, while the existing EV makers would "just" have to upgrade the batteries. Not trivial, but MUCH easier.
At least in America, there was a headlong rush into the most popular/profitable segments resulting in a glut of $50,000-$60,000 midsize crossovers and a waiting list for Chevy Bolts and Nissan Leafs.
Jeez.... the prices that auto manufacturers want people to pay are rocketing not to 50k to 60k, but 70k to over 100k. It's insane because the rule of thumb is pay no more than 25% of your salary for a car. That means there needs to be a whole lot of people making like 400k a year to buy these new cars - especially in the light truck and SUV market. I'm priced out of the Mustang Mach-e. They seem to be mostly 70k vehicles.
@@OldYgg We need to see good $25K EVs. Tesla is far from the only player in this. But I expect it will make the safest car in the class. We need the time to build a good used EV markets.
@@danharold3087good plus EV plus $25k … there is no product in that segment. A $25K EV won’t go at highway speeds for an hour or recharge to return the trip in an hour. Unless it’s a motorcycle. Even then it’s a stretch. I am looking at you Zero and Aptera. Shonks
@@theairstig9164 Elon and Tesla can do what others say is impossible. "Tesla Semi defies laws of physics and is passing us by if true, says Daimler’s head of trucks" No this is not me being a Tesla fanboy. I am a fan of the engineering not the brand specifically. I realize that a good many of the advancements do not spring from Elon's brain. Like edison he has people. But... Batteries are going to even less expensive with the legacy auto roll back on EV production plans. Fell over 1/2 prior to that. The new Tesla production methods will reduce prices further. Did you see Sandy Monroe at a auto show where a Chinese engineer showed him how the refreshed model 3 rear end was constructed. I would call it robot ready. If it is not $25k it will be close.
Toyota has 2 battery factory investments. 1st one started in 2021 in North Carolina. They just announced investing an additional $8B for a total of $13B. And what are they getting for this massive outlay? 30Gwh of batteries, mostly for PHEV and FCV. The 2nd is a $3B expansion of LG Energy's Michigan battery factory once it ends producing pouch cells for the Chevy Bolt next month. This outlay will net them 20GWh starting in 2025. For context, the historical cost of EV battery factories has been about $2-$3B per40GWh of capacity, and that price has been going downwards. So Toyota is getting royally ripped off on both deals.
Toyota building a battery factory in the us allows it to take advantage of the incentives for a building the car in the US/Canada/Mexico and for the car using a battery built in same. Note Tesla vehicles using a battery from China will only qualify for part if the BEV incentive and Tesla's built in china and brought to the US will not qualify for any of them
Wonderful show!! This is the second time I almost climaxed in a TE introduction. I've been repeating some of the statements made all year. Gloom and doom is indeed on the horizon! A few caveats: Most legacy autos never took EVs seriously! They made grandiose claims, which TE reported that I wished were with more push-back or insight. Many legacy autos have announced future production reductions, yet Tesla increases its production every year. Also several part suppliers have confirmed building plants in Mexico for 2024. The $25K car should be built in China, Berlin, Texas and Mexico. Legacy auto also produces vehicles in China like Tesla. Perhaps there's not enough battery production facilities in the USA, however, the global battery price per kWh is under $100 and in China domestic prices vary between $70-$90 depending on the chemistry. UAW workers deserve better wages & benefits for sure. However, the final outcome is that many workers will be permanently laid off - automation in the EV manufacturing with autonomous humanoid robots will reduce the amount of workers required. "If it works out for Toyota...", not! Toyota has benefited from Wright's law in the ICE & Hybrid vehicle production but that won't apply to EV production. They are wasting precious resources in hydrogen and solid state battery technologies and are absolutely unprepared for the EV transition. They will need to acquire a Chinese EV maker to get a foothold into the EV market, IMO.
Great coverage of this topic. Copper is another EV commodity widely used by defence industries, from ammunition, to alloys. With multiple geopolitical conflicts involving many nations, the demand on copper from defence industry is likely the highest in last 30-50 years. With the chip shortages during pandemic, and countries wanting to localize chip production after, many chips are being redesign and production being relocated. Thinks like this are causing unexpected disruptions to supply lines, and to when will be available. The good news is because of higher demands on sourcing, production should greatly increase over next 2-3 years.
It's amazing how legacies changed their minds after receiving billions of free government loans to invest in EV production. Our government was also complicit in the taxpayer cash grab.
EV's can be a great choice but they still aren't suitable or affordable for everyone. If they are part of the mix then that's great, but forcing people to "make the right decision" has never worked. Make a product that is suitable equal to or better than the current offering, and they will sell tomorrow. The question is how much is enough, the wrong answer is 1 ice engine is too many.
Exactly. Battery tech is the bottleneck here. Once weight and energy density get more competitive, the answer will be clear. Plus, there will always be a need for some ICE vehicles, and as EV's become the norm, the cost of gasoline will actually drop because its demand will drop. People forget that gasoline was once a nearly useless byproduct of oil refining because the lubricants, working fluids and tars, etc. were the real demand. Oil refining will never completely go away because of its other uses (plastiscs, etc.), so gasoline may become very cheap again, some day.
We are at a time when we cannot depend on market to shift to electrification and fix climate issue in time. This need acceleration, that means pain have to be endured. It it not a zero sum gain.
The US mandated emission standards in the early 1970s. Europe in the 90s. Our governments have been telling automakers what cars they can sell us for decades. Anyone who lived through this can tell you how much worse cars became decade by decade. It was only when EI and EFI were adopted that they began to improve. Automakers are free to make any car they want so long as it meets emission standards. Your free to buy a hydrogen car.......
@@AudiTTQuattro2003 It's really the cost of materials, not the weight that's the big factor. The switch to LIP batteries actually reduces energy density, but it's being done because it also reduces cost. Weight of batteries is a very big deal with applications such as smartphones, laptops, or airplanes. For cars, it doesn't matter so much, as long as the batteries are plentiful and cheap.
If you wait for 'the market' to sort out EVs vs ICE vehicles, the ICE market will inevitably crash. The EV technology is here. Chinese companies have released EV models that are both cheaper and higher quality than their ICE counterparts. Once the global auto market shifts to electric, reverse economies of scale will make the price of ICE vehicles go up at the same time that the price of EVs keeps falling.
There are only two EV markets that will thrive over the next 3 years in the USA - Electric Metropolitan Passenger Buses and Electric School Buses. According to our research at e-Roll Corporation, the consumer EV market is getting ready to collapse. American consumers feel no pressing need to own an EV, complicated by the fact that one player, with a 75% market share (Tesla), dominates the market even though its vehicles are absurdly overpriced.
Most of them thought they could make a platform and win, platforms are for mature markets which EVs aren't and it's a long time since they had to produce multiple truly new models with new tech at the same time.
Batteries! A Hummer has - needs - a gigantic battery, because it is huge and heavy. A simple commuter car can do just fine with a battery that is 80% smaller than the Hummer... but hey! The Hummer (Rivian, whatever) has a great margin.
I think the very high price of EV's currently is hurting sales. Especially when the average price of an EV is over US$50,000 even with US Federal tax incentives. And there's also the the issue of too variable quality and difficult to use public DC charging networks outside of Tesla's own Supercharger network. In short, until public DC charging networks are way easier to use and the price of EV's start coming down thanks to improved-technology battery packs, new car buyers are still going to gravitate towards smaller cars and crossovers. No wonder sales of the Honda Civic, Honda CR-V, Toyota Corolla and Toyota RAV4 have stayed strong lately.
I think a lot of current ICE manufactures are waiting to see what happens with future battery technology, giving longer range cheaper prices and safer construction, the general public are also looking at this and do not want to be an early adopter and loose thousands in depreciation
ICE makers played the wait and see prior to jumping in this last time. They figured the startups, especially Tesla, was not doing anything special. So the built their EVs with nothing special. Now they are finding few wants their EVs built with an ICE hangover. Jim Farley realized this and has isolated the EV and ICE engineers. Looking forward to much improved Ford EVs.
Early adopters always pay more. The EV car market is still new and will stabilise. The issue especially in America is the huge amount of right wing FUD on social media.
@@AlanTov I'm left of center in most things and have been looking for a 300-400 mile ev that can take 250,000 miles before major overhaul. Been looking for over two years. I've narrowed my search to a few 5 year old ICE cars or a Prius base Hybrid (not the plug in, it's pointless dead weight 85% of the time)
great video. i learned a lot about the different aspects that play into the auto industry and especially the ev segment. sometimes i fall into simplistic thinking that it's just the legacy automakers at fault for dragging down the ev market, but as you said, it's more complicated than that... like shareholders.
They hate losing money. There was never a plan to produce anything but what makes money. The leap for trad auto to Evs was so great that none were willing to until forced by Tesla. Now in an interesting turn of events with Tesla lowering prices it has forced the hand of legacy auto to abandon selling evs
Wouldn't it be funny if by 2050 90% of people lived in cities and just used e-bikes to get around? It would really put a dampener on car companies sales. Guess they should have listened
I sooooo wish they’d invest in battery recycling also. Why are they so expensive!?? I worry about being laid off and my ICE is on it’s last leg. I got an ev (an e-bike) and I just wish I would get laid off so I didn’t have to drive my murder car trap.
We have a fair number of companies investing in battery recycling. But the bulk of batteries now on the road have 10 or 20 years of life remaining We can't affordably recycle batteries until we have the old ones to recycle.
I've talked with 2 separate Chevy dealers. They are saying GM is extending BOLT production beyond the end of the year. But I don't see any corroboration in the news. Has anyone seen anything to confirm?
I don't get why everyone hates on Toyota, they do what makes economic since and I believe it is still best to have a plug-in hybrid where you can have most driving on electric, and then 60 mpg highway driving with quick fill-ups and the heat output of a gas engine in the winter when the electric range drops in half.
Toyota… i bet Tesla expands ev growth more in these two quarters than Toyota. Don’t let these liars continue to hoodwink you with down the road commitments…
~ 5:00 - In Europe other factors are also in the play: slower than anticipated uptake of VWG cars, in good part thanks to increasingly present Chinese competition, and work on public charging infrastructure, both on inter-city roads and, even more, in cities, for high-rise dwellers without their private garages, seriously lagging the lofty goals of ICE vehicle sales ban.
NACS charging standard designed by engineers to encourage EV adoption. CCS1 charging standard designed by the ICE manufactures marketing department to discourage EV adoption, trying to keep EV’s from catching on. In 10 years the only place in North America you will find a CCS1 charger will be a museum and electronic surplus stores.
Like some of the best thriller movies, the twist in the tail of this video made me gasp! Still, I switched from being a Toyota/Yamaha fan (and owner) to Honda a few years ago, and Toyota will have to do a lot to win me back... and they are probably saying "Marty who?" 😆
Half-hearted attempts and then basically bailing? Say it isn't so? You could have called this 10 years ago. It's the same reason Blockbuster went under. Instead of committing to new business models and expansion they doubled-down on what they thought they did best... And well? Here we are... I suspect we'll see a drastic kill off of legacy auto (or at least shrinking of) soon enough the way that retailers were slow to adapt to Amazon coming for them. And well? No Sears... JC Penney and Macy's on the decline to name just a few...
If you produce something to make money, you need people to willingly buy it. Sales of EV's have reached the average joe, who just wants a cheap logistically able vehicle and EV's do not fit their requirements, so less people want them and thus manufacturers are making less of them, to balance supply with demand, otherwise they will go bust. End of !
My conservative parents were thinking about getting a tesla (that on its own shows how impressive the marketing is to me lol) but they were turned off by app the app and touch screen fiddling
It is not for everybody. If you are comfortable using a smartphone, it is for you. This turns off some of the older buyers, but this trend is happening in most car brands. People born after about 1955 is a big market, but it excludes the actual baby boomers. I wonder how much a Model 3/Y button and dials mod would cost and how well it would sell. Simple gauges behind the wheel showing speed and battery percentage. Lights for the regular functions. And some buttons and knobs in the center console instead of the screen. You would still have the excellent drive train and charging, you would just have to navigate yourself like it was 1983.
This is American automotive history. The Japanese threat was poo-pooed for decades... and then the Big Three went under. American manufacturers simply cannot understand that success is in making what the customers want. That is NOT gargantuan, expensive TRUCKS. So the Koreans, and even more the Chinese, are making US cars irrelevant. Duh.....
Thanks for a good overview Nikki, but I think you've left a few things on the table. For one, the US big 3 have been pushing back on car emissions standards for decades, and continue to do so. I think their whole big move of the last five years was to produce just enough cars just to forego paying Tesla for missing those targets. I don't think they ever intended to produce good high selling EVs. Second, they have a huge influence over congress and even the executive branch at the moment, partly via the unions. They also are some of the biggest advertisers in the US with annual multi-billion dollar advertising budgets. They also are deep into much of the automotive press and GM and Fox are two of the largest advertisers for FOX news. With this kind of influence they also have a big sway on Wall Street and with many of the so called stock market experts. They and the oil companies have been spreading FUD about climate change, and now EVs for decades, they are doing it now just for cover. Ask yourself why even though Tesla's demand numbers are through the roof and they've been able to sell every vehicle they make without the dealers soaking up inventory and without advertising, the press is now saying that ALL EV demand is down, when it is only demand for the traditional automakers. If we hadn't had the Japanese invasion with good quality small cars back in the 70s and 80s, US made cars would still be some of the worst cars out there, self-destructing after 30k miles. These car companies are just still trying to win at the game they've been winning for decades, as it has always worked in the past. But for the sake of the ecological system of our system and all of its inhabitants I certainly am rooting for the EV transition for one.
And, if you’ve watched the multiple videos on this journal discussing, you’ll know that we only drive the truck when absolutely needed. I’m recently purchased an old electric motorbike so that I have to use it even less and when we actually purchased it, we told everyone multiple times why we ended up buying a pick up truck. We love something that was less massive , but at the end of the day there’s not a lot else that fits our needs -Nikki
@@transportevolved Buy an old used gasoline pickup. Small engine, big loadbed. Probably no worse for the environment than the monster you have. (Look at what professional landscapers drive - the Mexican guys.)
@@transportevolved I'm subscribed. I think your channel is one of the best for everything EV. I think EVs will be essential in whatever future we will create. Also, I subscribe to channels like "Not Just Bikes" and "City Nerd"... and am deeply opposed to absurdly oversized vehicles, regardless of their energy source.
The bottleneck has always been battery related, whether its storage capacity, output and efficiency, or scaling. NONE of the legacy manufacturers can make an EV any quicker than the next bcz of the limited supply and high cost of lithium ion for the batteries. There's also still the lack of charging infrastructure, the changing performance with the weather, and battery disposal at the end of the vehicle's life.. to name a few things Just on the battery tech.
