I keep seeing articles about how US car companies and car rental corps are backing off from EVs due to lack of demand.
So, which is it? Worried there might actually be demand if there are reasonably priced alternatives?
this post was submitted on 25 Feb 2024
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There is not enough demand for $120k EVs, theres plenty of demand for reasonable priced ones
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(18 replies)
It's been obvious for at least ten years now that the Chinese are going to use the transition to EVs to try and take a big bite out of the automotive world market. But western manufacturers just sat on their hands. Now that it's actually happening the only answer they have is cry for protectionism.
So basically the way Japan took prominence in the auto industry after the 1970s oil shocks?
Or how the Koreans moved from also-rans in CRTs to the forefront of the flat-panel display market?
Or how GM consumed the century-old locomotive industry during the rise of diesel?
A seismic change in an industry always invites new competitors. There's no room for Surprised Pikachu faces here.
The more interesting question: is this a classic Innovator's Dilemma: they don't want to compete with BYD on a $16k EV for a global market when they can still sell $40k petrol SUVs to a diminishing slice of the first world? Or is it an admission their processes and designs are so ossified that they can't compete?
Don't pull the cheap-labour card. If there's more than a $1000-per-car difference in price to build a car in a modern automated factory in China vs Mexico, then something is very wrong with your process.
My opinion is that the US and European incumbents are basically in the grip of the financial industry. All that counts are short term returns. Technically, they'd be up to the challenge but that would mean reduced margins in the short to medium term which is why it's not happening.
And that's how they sealed their own fate. And they should face the consequences imo.
The problem is, the rest of the world are the ones who will end up suffering. The company runners mostly take their golden parachutes and peace out to a board position on one of the surviving companies while they sit on the beach near their thirteenth house.
They won't see any real consequences.
U mean, our fate
It isn't a true Innovators dilemma because the petrol cars they make don't require any further innovation.
All the innovation can happen in the EV drive train, any other innovations can apply equally to both ICE and EV models.
You're right the innovation is also on the production line.
The fact is China is investing in technology and innovation has halted or been misapplied elsewhere.
Look at Motorsport. Formula E is dominated by Stelantis but a European and American conglomerate. F1 by Europe and Japan. New technology in endurance racing by Europe and Japan.
The US has one high quality player in the EV power train world and that is because they joined with other companies.
The US has fallen into the middle ground of not being high quality, and not being cheap.
The US auto sector has globally fallen towards the missing middle. They can escape by going in either direction. Or European and Japanese makers will take the premium market while China takes the basic volume consumer market.
If US automakers are so expensive that they cannot compete, they cannot compete. As simple as that.
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But but but ... Elon, the Free Market ! You can't ask for regulation, that immoral. You, the champion of Freedom, how sad this is ...
There's a saying that a business can't disrupt itself. Legacy automakers are stuck in a cycle of continuing to improve their existing untouchable business lines and everything internally is oriented towards seeing continuous improvement without huge risk.
At some point customers are starting to think... I just need to get in my car and go somewhere. Does that really need to cost $58,000 base?
If some executive at Ford said hey let's make a car that costs $12,000 he'd be tossed out the boardroom window. Ford doesn't make money off cars like that.
As a newcomer BYD has a lot less to lose, so is better positioned to disrupt the whole industry. They don't have incumbent lines of product to defend. So they can show up with alien technology or price points that just wouldn't be interesting to a legacy.
I'm sure the people who work at BYD think of themselves as high tech innovators and wouldn't even want to go work for a legacy given the choice.
It may or may not work... We'll see. It's certainly starting to look like Tesla is falling behind.
How is that an extinction level threat when Ford and GM build their stuff in Mexico too?
Because they've gotten complacent, similar to when Japan ate their lunch before.
Uh.. maybe get Tesla to improve their product? Y'know like in the spirit of competition and all that?
Competition isn’t how we do things in America anymore. You either buy them outright or you get the government to prop you up until you’re too big to fail.
If it's in fortune or business insider it's only purpose is to influence stock prices, not tell the truth about a business.
Pretty much. Anyone that has been following EV knows this is not news. Still nice to articles talking about it for the people who are not up to speed.
BI does have some good articles.
Fuck the US car industry and fuck Tesla.
Just to be fair: Fuck China, too.
The main problem is that china highly regulates their market – which is the biggest world wide – while expecting everyone else to follow open markets.
This the same auto trade that had EVs thirty years ago?
It is? Weird.
They had em 100 years ago as well.
I don't get why these trade agreements allow for this. They should only apply to products form companies 100% owned by a member country of the agreement and must be things 100% sourced from the member countries.
Nothing is ever 100% sourced from one country. Whether it's raw materials, sensors, computer silicon, batteries, or software, something is always going to be international.
thats fine to me. food and raw materials that are native as well as the odd things sourced from the three member countries.
How about actuators or tyres? Wire bundles, seats, steering wheels, insulation, shock absorbers, etc? Is it just the frame and body panels that need to be made there?
everything. if cars are not 100% from the 3 countries in the treaty then it should not have the discounted taxes.
Then it's not gonna have that discount. No amount of subsidies is worth standing up a silicon foundry.
Edit: the point is, what's the cutoff between the first and second set of things? Maybe ranked by capital investment required?
yes. thats the point. we would not have such a wide area of discount. Only whats truly local.
So how do you encourage cars to be made locally if you don't give any incentive till it's prohibitively expensive?
It still encourages it as a variety of parts can be internal and thus cheaper. Just not the whole thing although honestly I don't see encouraging car manufacturing as an important part. It should be to encourage local commerce. As you said making a silicon foundry is expensive and we are now desperate to get them made here because our laws did not encourage it previously.
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