Thought provoking video regarding automakers worldwide

[gustafson]

yeah, with the depreciation on new cars it is hard to beat a 3-5 year old car. Lots of off lease low mile cars. I have I have bought/leased new the last 3 times because I just don't have the time to go look at used cars or even deal with potential problems, but paid for it

 

[Ries]

I have consistently bought new cars cheaper than the average used version of the same car SINCE the 70s. Most recently a bit over five years ago.
granted, I dont want all the crap they put on modern cars- so less luxury option groups is a good thing for me. And the cheaper versions of new cars, while hard to find, are just what I want. So, for example, an average new pickup truck in the USA right now is about $42,000. Thats what people pay, every day. Half the people pay more!
But if you nag a dealer, and dont put up with their "salesmanship", there are actually trucks that are right around $30,000. The "fully loaded" F150 is $85,000.
And the expensive ones outnumber the cheap ones, new or used, about 20 to 1.
Remember, earlier in the thread, the figure of 4% of new cars sold last year at or under $25,000.
A $30,000 new truck is a much better deal, for ME, than a 3 year old $85,000 truck that is now selling for $50,000 not far from my house, for a fully loaded 2 owner 2018 truck.
I bought my last new pickup with rubber floor mats, bench seats, and windup windows, for about half the average cost of a 2 or 3 year old similar sized, but heavily optioned truck, at the time.
This sort of thing is very common- 90% of the used market is outlandishly expensive, because the salesman saw those customers coming from a mile away.
Again, the average cost of a used car in the USA right now is $29,000.
Me, I can find new cars in that price range, and prefer to do this when I buy.

 

[Ries]

I just read this, and I found it pretty interesting- Volkswagen is saying they will spend $193 Billion dollars globally in the next five years in electric car technology-a big chunk of it on battery factories.

Volkswagen invests in batteries, raw materials in race for affordable EV

Volkswagen plans to invest 180 billion euros ($193 billion) over five years in areas including battery production and raw material sourcing in a bid to cut electric vehicle costs and protect its market share, it said on Tuesday.

www.reuters.com

this includes one new factory in Canada.

Thats real money.

 

[hanermo]

Yeah, it´s interesting, and if in fact it was true it would mean VW is actually really going to get into EVs in a meaningful way.

The VW group has about 60B-260B€ in pension and or firing liabilities if they retire their 56 engine+powertrain plants worldwide.
They also have 33B€ in cash. Give or take.

vw group cash - Google Search

And they sell about 270B per year, at 8% margin --
but their actual total sales fell about 7% last year, 2022, mostly due to Tsla and a few other electric car startups, and china (mostly EV sales growth).

VW does not have and cannot fund 180B$ in EV tech or batteries or factories or anything else over 5 years.
Most-all of their cash and equities are locked up due to bond covenants, bonds rated on the open market.

At decreasing sales of 7% y/y VW will be out of free cash within about 2-3 years, but will go BK much before that.
VW group has about 431B$ in debt.
Over 2.2 times it´s annual sales.

vw group debts - Google Search

The same applies to mostly all of US Big Auto, Ford excepted.
Big debts, big liabilities, everything relying on sales growing 1-2-3% y/y exponential.

At this time EVs have taken about 12% of the global, and increasingly the US market, and are growing 40-50% y/y exponential.
Passenger non EV aka sedan cars sales fell about 7% in the US last year - and EVs grew globally about 40-50%.

Within approximately 2 years, at current 45% growth rates, EVs will be the dominant car companies that *get funded*.
Markets are very much forward looking.

This means the bonds of VW, toyota, Big Auto, will start to be downgraded as their sales volume slows down, as does their free cash flow.
This has already happened, in that the sales volume and the margin and free cash flow has slowed down, markedly.

I just read this, and I found it pretty interesting- Volkswagen is saying they will spend $193 Billion dollars globally in the next five years in electric car technology-a big chunk of it on battery factories.

Volkswagen invests in batteries, raw materials in race for affordable EV

Volkswagen plans to invest 180 billion euros ($193 billion) over five years in areas including battery production and raw material sourcing in a bid to cut electric vehicle costs and protect its market share, it said on Tuesday.

www.reuters.com

this includes one new factory in Canada.

Thats real money.

 

[gustafson]

I think it is unwise to make longer term judgements based on sales over the last 2-3 years
Volumes and profits have been uneven and supply limited.
Volkswagen is saying they will invest in EVs and you say investors are forward looking and will invest in EVs
OK

 

[hanermo]

Of course it´s unwise to look at 2 years sales.
But for 12-14 years, tsla has been growing sales 45% y/y exponential.
For 3-4-5-6 years byd and geely in china have also been growing sales 50% y/y exponential, give or take.

VW is saying and has been saying stuff about EVs -- for at least 7 years.
At leat 5-7 prototype VW EVs never appeared.
Several VW battery factories never appeared.

VW has been big in press releases -- but the cash does not appear in their quarterly 10Q statements as reserves and planned investments.
VW does not have 190B in cash to invest.

EV sales went from 0.02% globally to about 12% currently, oecd.
This is about 600x growth.
The tsla gigafactory about 7-9 years ago, 35 GWh / yr planned output, was more than the global total supply at that time.
In 2022 global motive lion output was about 650 GWh, about 20x growth.

I am NOT so much a cheerleader for tsla.
I AM pointing out technical facts that no existing shipping EV product we know of has anywhere near the performance of tsla power electronics in their inverter-combo.
11 kW home charging, cabin heating, 93% efficiency, under 500$ build cost, 1700 amps 400 V peak output, excellent regen.

The real point is that tsla, and in the future others, perhaps polestar, can deliver excellent premium vehicles for much less cost than anyone else.
Tsla has the worlds highest margins around 12.000$/vehicle, +, about 5x higher than toyota, on about 55.000$ avg ticket size.

Within a few years tsla, and or others, will have a cheap mass market premium product like a bmw 2 series.
Or golf Gti.
For 10.000$ less retail, and 1/5 the use cost in fuel, globally.

I think it is unwise to make longer term judgements based on sales over the last 2-3 years
Volumes and profits have been uneven and supply limited.
Volkswagen is saying they will invest in EVs and you say investors are forward looking and will invest in EVs
OK

 

[gustafson]

"The American auto industry"? Lots of players assembling vehicle in the United States.

don't quote the spammer
both their posts have an irrelevant link inserted

 

[eKretz]

don't quote the spammer
both their posts have an irrelevant link inserted

It's not a live link, but yes, do watch that. Got rid of the spammer, SP can edit the link out from his quote.

 

[hanermo]

We will see what happens ..
for now, tsla wants to double their german factory output to 1M cars/yr, permits in process..
wants to double their china factory output, (40% of tsla sales global go to china), papers in, ..
and reportedly, today, is in talks in India to start making a 24.000$ tsla car and batteries in india, local market (3rd in world) and for export.

I would expect that the german expansion and china expansion at least happen, and possibly the india one as well, with reservations re: india due to local conditions ..
There was also reportedly an advanced plan for a tsla factory here in Spain, Valencia I think, which apparently got cancelled because someone leaked the news.

In any case tsla grew unit shipments 80%+ in the latest filing, depending on how you measure, and is on track to deliver around 1.8 M cars in 2023.

It seems very probable that tsla will gear up to be able to produce around 4 M cars within 2 years, perhaps as little as 12-18 months from now, at a run-rate level, ie monthly production will reach the level of 4M cars/yr, within 24 months.

All of this is without the cybertruck, supposed to start shipping late this year, and without the new, cheaper, production platform that will enable the 24.000$ car.
And the cheaper production platform that will transition into all tsla models, according to them - around 50% savings in production costs, official tsla statements.

What exactly is in the 50% figure is unknown ..
and is probable mostly parts, labour, frame, assy, and something from the battery side.

It´s probably unlikely that total cogs drop 50%, but I think some major part of cogs drop 50%.
In any case, even a reduction of say 6000€ in total cogs (55.000 € avg sales price, 12.000€ avg margin) is huge.

So it seems that tsla will grow 50% exponential this year, 2023, and quite likely 2024, and 2025.
2026 growth at 50% also seems at least possible/probable, with cybertrucks, trucks, shipping in volume and factory expansions and lower cost base.
That would be === 3M units/2024, 4.5M 2025, 7 M 2026.

 

[CarbideBob]

Someone is a Tesla fan.
The bigger boats do turn very slowly but when they do they leave a big wake.

 

[PDW]

Someone is a Tesla fan.
The bigger boats do turn very slowly but when they do they leave a big wake.

Somehow the Titanic comes to mind there...

PDW

 

[hmw1972]

Local Frito Lay is the test bed for the Tesla Semi's. Logical choice. I can not think of a lighter load then potato chips.
Bill D

My grandpa used to tell a story about how he was hauling a load of (live) canaries and stopped at the weigh scale. The weighmaster told him he was too heavy to travel on the highway. My grandpa said give me a minute. He grabbed a hammer and banged the side of the truck and suddenly wasn't nearly as heavy. A bullshit story no doubt but I loved it when I was a kid.

 

[altered image]

Now look an them.

 

[john.k]

I notice lots of another Chinese brand here ..BYD ,I think they are called..........basically the market here is split between SUVs and Utes .............sedan type cars are less than 10% and that includes Tesla ,........and small cars ,you just dont see any new ones at all..

 

[William Payne]

I live in a small town of 50,000 people here in New Zealand. Tesla’s everywhere. Very common vehicle on the road. No official charging stations in my town either. Just one outside a business where the owner parks.

 

[hanermo]

Somehow the Titanic comes to mind there...

PDW

Someone is a Tesla fan.
The bigger boats do turn very slowly but when they do they leave a big wake.

Yeah, right.
Sarcastic grin..

Toyota just announced retrenchment in china.
All major US carmakers had 10-20% reductions in sales last year, 2022, china.

Tsla grew, again, about 50% y/y exponential, with 20% margins.
Much higher margins than anyone else in the world.

The Tsla Lesson is simple.

EV cars need a Big Battery. This leads to shallow cycling and high longevity.
The battery must be thermally conditioned. Same results.
Fast 3-phase home charging and fast DC charging must be available.

For 10 years VW, Toyota, and US Big Auto has ignored these simple facts based on engineering and demonstrated results.
Tsla, only, has a very large base of very big batteries of very good longevity.
It is madness for the other makers to not do the same.

Afaik the other EV makers, so far, do not put in heat pumps for heating and cooling the battery and ..
try to get by with smaller batteries around 40 kWh. Madness.

 

[hanermo]

China had 35% plugin vehicle sales last month, 600.000.
Up about 55% y/y, exponential.
24% of all sales were full battery EVs.

35% Plugin Vehicle Market Share In China! (China EV Sales Report) - CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News! Plugin vehicles are all the rage in the Chinese auto market. Plugins scored 600,000 sales last month, up 54% year over year (YoY). That pulled the year-to-date (YTD) tally to over 2.5 million units. ...

cleantechnica.com

It is expected that china has reached peak gasoline consumption, and refineries in china are gearing up to produce more nafta, plastic feedstocks, aviation fuel, etc. Major consultancies and oil industry executives broadly agree.

Within a few years as the older cars are increasingly retired and cheap-to-use EVs replace them, chinese demand for petroleum will first reduce and then plummet.

At the same time, the large-scale installation of PV power in china continues.
48 GWh was installed first qtr 2023.
This is about 50 nukes.

Solar to drive renewable energy use, as China’s capacity just keeps expanding

China’s solar sector is expanding at record speed as costs of components drop and demand remains strong, which in turn is expected to further boost renewable energy installation in the country and globally.

www.scmp.com

About 120 GWh of PV is expected to be installed in 2023 in china.
Over 400 GWh total installed base.

Within a very few years, at such growth rates, power is likely to become abundant and very cheap, while greatly reducing fossil fuel needs.
PPA agreements with no subsidies provide PV power to utilities at around 0.02$/kWh for 20 years, in abundant sunlight, cheap terrain, and cheap regulatory environments.

With cheap excess capacity, EV cars, trucks, and mobility can be powered dirt cheap with essentially no environmental impact.
And AC/heating during the day.
And most factory, industrial, and office needs.

 

[standardparts]

China had 35% plugin vehicle sales last month, 600.000.
Up about 55% y/y, exponential.
24% of all sales were full battery EVs.

35% Plugin Vehicle Market Share In China! (China EV Sales Report) - CleanTechnica

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News! Plugin vehicles are all the rage in the Chinese auto market. Plugins scored 600,000 sales last month, up 54% year over year (YoY). That pulled the year-to-date (YTD) tally to over 2.5 million units. ...

cleantechnica.com

It is expected that china has reached peak gasoline consumption, and refineries in china are gearing up to produce more nafta, plastic feedstocks, aviation fuel, etc. Major consultancies and oil industry executives broadly agree.

Within a few years as the older cars are increasingly retired and cheap-to-use EVs replace them, chinese demand for petroleum will first reduce and then plummet.

At the same time, the large-scale installation of PV power in china continues.
48 GWh was installed first qtr 2023.
This is about 50 nukes.

Solar to drive renewable energy use, as China’s capacity just keeps expanding

China’s solar sector is expanding at record speed as costs of components drop and demand remains strong, which in turn is expected to further boost renewable energy installation in the country and globally.

www.scmp.com

About 120 GWh of PV is expected to be installed in 2023 in china.
Over 400 GWh total installed base.

Within a very few years, at such growth rates, power is likely to become abundant and very cheap, while greatly reducing fossil fuel needs.
PPA agreements with no subsidies provide PV power to utilities at around 0.02$/kWh for 20 years, in abundant sunlight, cheap terrain, and cheap regulatory environments.

With cheap excess capacity, EV cars, trucks, and mobility can be powered dirt cheap with essentially no environmental impact.
And AC/heating during the day.
And most factory, industrial, and office needs.

"At the same time, the large-scale installation of PV power in china continues."
Most certainly means there solar panel industry must be booming.
The move away from fossil fuels certainly creates opportunity in other areas especially selling solar panels to those who fail to produce enough to supply their needs, or seek less expensive product.