Quote:
Originally Posted by Erick Estrada
I don't agree at all with the above. ICE is still the dominant selling vehicle in North America so legacy automakers simply have to straddle the line of business as usual on the ICE side while putting their future development into EV's. Large automakers like GM, Ford, Toyota (global leader for solid state battery patents), Honda, Nissan, etc will do just fine and it's the smaller automakers like Mazda and Subaru (will likely get absorbed by Toyota) that don't have the resources to straddle the line successfully. Tesla is having its moment in time but I've seen no indication under Elon that they will ever shift to providing vehicles that match the quality, ease of use, and features that legacy models do. Even today Tesla just keeps removing more and more from their vehicles in the name of profits as it looks like they are going to go ahead and remove the physical stalks from the 3 and Y which is simply a terrible decision as more and more owners are getting tired of the inconveniences of ownership. I like my model 3 but there's no way I would buy another one given my frustrations with the infotainment system knowing that the new one will require me to use the screen to take the car out of park and into drive or reverse and using haptic button on the steering wheel for turn signals is simply a no go for me. Even the masses at Tesla forums are not okay with these changes but Elon's going to do it anyway and eventually there will be a day where people have had enough and that day is coming. I can't wait for my next car to have auto wipers that actually work and some may snicker at that but understand that with Tesla you are forced to use auto wipers with even basic cruise control so it's a constant nuisance that owners shouldn't have to put up with. There's just so many little nusances with these vehicles and it's astonishing how Tesla turns a blind eye to them but they do and there's no indication that their vehicles will ever ship with all the basic functions properly working as we are accustomed to with legacy automakers.
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That's a pretty blind, North American centric take that completely ignores what's going on everywhere else, but even within North America. I'll ignore the Tesla stuff for now because I don't think their either real or perceived build quality will have any impact on their trajectory and this post is going to be more about legacy OEM's in the future.
Firstly, both Ford and GM sell only barely above 50% of their total volume in NA. Their exposure to Europe and China
absolutely is vital to their success in the future as China is by a very large margin the largest auto market in the world. Ford is decreasing it's market share in China by double digits and it's getting worse, not better. Ditto for Europe. In 2021 GM sold more cars in China than in the USA, so it's certainly not insignificant. They're dropping market share precipitously. Who's gobbling up all that lost market share? It's not who it used to be (other OEMs). It's new Chinese EV start ups and Tesla. BYD went from 431k vehicles in 2020 to over 1.8M in 2022 and they're rising super fast. If you include PHEV's, they're now the world's largest seller of EVs. In fact, at only a couple percentage a few years ago, China will have more than one third of all vehicles sold being EVs. The growth is exponential.
Second, to say ICE is the dominant technology in the North American market is true, but really not dealing with the future issue you're extrapolating it to. For the legacy OEMs to survive the future (not the present), they need to be prepared for it. The curve in NA looks like everywhere else, just a few years behind. there's no reason to think NA is going to somehow buck the trend when it's following the same trend as everywhere else? To do well, an automaker needs to grow. Total ICE sales worldwide in 2017 were almost 100 million. In 2022 they barely topped 70 million. Where iss this growth going to come from? The only growth in the entire automotive market is in EV's. To get to any reasonable scale takes years. VW is the most aggressive OEM by a lot plans to sell more EV than Tesla by next year. Except even at full capacity they can't match what Tesla is already selling because they keep making plans that ignore the staggering growth of the segment.
In the end, are you suggesting that either the timeline for the OEMs to catch up is long enough, or just that it's not going to happen? Because there's ample evidence for them being too late to the party here. I suppose we could quibble about what success or failure looks like, but I would argue very few of the Top 8 auto makers in the world will still be in the top 8 within 10 years. Disruption is coming in a big way, you're just not seeing evidence of it in the dealerships in Calgary because it's probably one of the last places it'll hit.