Electric Vehicles

[snizzle]

Originally Posted by FarmerFran

As long as they don't start hitting 60k also

AVG price for a new vehicle today is near 50k.

[Martinjlm]

Originally Posted by BuckeyeROC

Jim Martin, I am curious about something. How concerned and what type of contingency plans are there for the auto industry if things escalate with China and that market becomes closed off to them or worse, their assets in the country are seized?

Lots of concern should that happen. I’m sure there are folks scheming contingencies but I don’t know who they are our what the contingencies may be. The auto industry would not be the first fuse to blow. Consumer goods would definitely pop first. There may be even more industries impacted before autos.

Chip shortage was a foreshadowing. The only reason autos appeared to have the most impact is because what chips were available were prioritized to consumer goods (cell phones, pc, gaming systems, home appliances, fill in a couple dozen more blanks) that used the more profitable chips. What happens if those are also shut off?

I guess you could say some of the contingency is built into the IRA. Using incentives to shift vehicle and battery production, as well as mineral sourcing and processing reduces the dependence on China for these products. But that’s more of a long game. I’m not aware of any effective short term contingencies.

[Wyzz Kydd]

Originally Posted by BuckeyeROC

And severe delinquency rates (90+ days past due) are skyrocketing on auto loans.

Might be just in time to help me get a deal this summer on a slightly used car for my wife. Maybe a 2022.

[Wyzz Kydd]

Originally Posted by Martinjlm

Lots of concern should that happen. I’m sure there are folks scheming contingencies but I don’t know who they are our what the contingencies may be. The auto industry would not be the first fuse to blow. Consumer goods would definitely pop first. There may be even more industries impacted before autos.

Chip shortage was a foreshadowing. The only reason autos appeared to have the most impact is because what chips were available were prioritized to consumer goods (cell phones, pc, gaming systems, home appliances, fill in a couple dozen more blanks) that used the more profitable chips. What happens if those are also shut off?

I guess you could say some of the contingency is built into the IRA. Using incentives to shift vehicle and battery production, as well as mineral sourcing and processing reduces the dependence on China for these products. But that’s more of a long game. I’m not aware of any effective short term contingencies.

I don't think there are any good short term options. If they take over Taiwan we'll have real chip problems.

[genxer]

Originally Posted by Wyzz Kydd

Might be just in time to help me get a deal this summer on a slightly used car for my wife. Maybe a 2022.

Repo guys must be getting paid well. Used prices dropped for a bit, and seems creeping up again.

[Martinjlm]

Originally Posted by Wyzz Kydd

I don't think there are any good short term options. If they take over Taiwan we'll have real chip problems.

Yup. The CHIPS Act will help, but there would still be short term pain while the US based chip suppliers ramp up.

[FarmerFran]

Originally Posted by Martinjlm

Yup. The CHIPS Act will help, but there would still be short term pain while the US based chip suppliers ramp up.

I stopped following, did they agree to start again? Last I heard they told them to pound sand because they were not getting the "deserved" breaks.

[Martinjlm]

Originally Posted by Martinjlm

Yup. The CHIPS Act will help, but there would still be short term pain while the US based chip suppliers ramp up.

Originally Posted by FarmerFran

I stopped following, did they agree to start again? Last I heard they told them to pound sand because they were not getting the "deserved" breaks.

Not sure who “they” are or what they stopped doing? I’m missing your context here.

[FarmerFran]

Originally Posted by Martinjlm

Not sure who “they” are or what they stopped doing? I’m missing your context here.

intel and Nvidia halting the plants to make the chips because the government was not playing nice with them on benefits.


I looked it up, and looks like the government is playing nice with them now.

[Martinjlm]

Originally Posted by FarmerFran

intel and Nvidia halting the plants to make the chips because the government was not playing nice with them on benefits.


I looked it up, and looks like the government is playing nice with them now.

Ahh, got it. And you're right on both counts.

[Martinjlm]

Now that the final statistics for 2022 are in, here's a few fun facts...

• New vehicle registrations for 2022 are down 11% from 2021
• Tesla new vehicle registrations are up 41%
• Tesla has passed BMW as the highest volume luxury brand. Please note, that for a brand to be considered a luxury brand, it is not required that every vehicle sold is a luxury vehicle. There is still warranted debate as to whether Model 3 is atrue luxury vehicle. But the same can be said for 2-Series and several of their smaller CUVs.
• For years (decades?) Toyota Camry has been the top selling nameplate in California. For 2022, that honor goes to Tesla Model 3.

[snizzle]

Originally Posted by BuckeyeROC

I have a hard time taking any sales numbers since covid too seriously. A lot depends on specific supply chains and what was prioritized or even ABLE to be prioritized for production.

Totally agree. It seems it has been who can best manage supply chain complications and what product lines are prioritized for said mfg.

[genxer]

Some links.

https://www.musclecarsandtrucks.com/...nder-scrutiny/
An older background write up:
https://www.qnovo.com/blogs/the-rise...f-a123-systems
That cell type was an MIT innovation, got big US gov $, in '12 went bankrupt and then to a different Chinese Co. than CATL.

https://www.musclecarsandtrucks.com/...n-foreign-oil/
"...the high water requirements needed for the mining process."
"Lithium mines require a huge lead time to develop, mines that became operational between 2010 and 2019 required an average of 16.5 years to develop."
"...areas currently suffering from water shortages... ...China"

[90503]

Maybe old news, but it has an angle on profitability, and how the poor-poor car makers are just scraping by...lol...Surely they foresaw all of this when deciding to go all-in on EVs, but nonetheless it sounds more and more like they are flying by the seat of their pants...Yes, the EV future is inevitable.

I recall the sales pitch for EVs was that they would be less expensive to manufacture due to their simplicity compared to ICE with fewer systems to design like cooling, exhaust, fuel delivery, etc...Yet here we go, they are costlier and less profitable.

Anyhoo, they do mention a consulting firm to bolster the claims of less profitability...

Here's the link...and some of the article...

https://www.msn.com/en-us/autos/news...f5fe6803&ei=38

Subscriptions and additional offerings post-initial transactions are part of why automakers are especially interested in leasing their EVs. If they can get consumers locked into an EV lease at a reasonable monthly payment, they could capitalize on that to later upsell them on more functionalities — made possible through over-the-air software updates — throughout the contract of the lease.

While consumers might need to warm up to the idea, the industry might not have much of a choice, according to Deloitte's recent future of automotive mobility to 2035 report. The consultancy estimates 50 to 60% of future profits might be at stake if companies keep going on with business as usual.

So major changes are in store as automakers navigate shifting consumer behaviors, industry headwinds, and especially, increasingly attractive competition.

"To be blunt, the price for inaction by industry players could be fatal, especially in an industry on the move in so many directions," the report said. Changes, including vehicle feature subscriptions "are expected to unlock a variety of new revenue streams."