Quote:
Originally Posted by Hack&Lube
From what I've seen the biggest losers are going to be ICE manufacturers in Japan, US, and Europe who cannot transition properly.
Toyota has famously tried to sit on the fence regarding EVs and have fumbled many times. Honda is not developing their own EV drivetrains and is going to rely on GM. BMW/Mercedes are deeply entrenched in ICE engineering and there are many signs they are dinosaurs in adapting.
China is the biggest threat to all these automakers as they have a huge domestic market to build and test out technologies (and massive, unified government support) and then they can sell to the rest of the world if approvals and protectionist tariffs don't kill them somehow. I would love to have a Chinese EV choice here in Canada (Norway has some).
For Tesla, I think their competitive advantage (aside from the stock market hype) and how the Model Y is the best selling vehicle in the world right now is that they are trying to focus on those cost cutting manufacturing steps to further increase their margins and allow for price reductions when the real competition does show up.
They are anti-union and actively trying to automate their manufacturing into simple steps like the gigapress which stamps the whole car in one piece rather than having humans or robots assemble and weld parts together.
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I agree with all of this. It sounds fine to say (as EE said) that the big traditional automakers can just catch up when the penetration gets to 50% ignores just how that is literally impossible.
First, it takes minimum 5 years for the big automakers to get a new electric vehicle to a decent production number. In 2017 there were 1M total electric vehicles sold. By 2022 (5 years later,) there were 10 million sold. That doesn't look to be slowing down. If they're 5 years behind, who's buying their cars? Even though they're dipping their toes in now, the same trajectory has 50 million (probably well north of 50%) in another 5 years, and they won't be able to keep up with demand.
Second, Established ICE makers have existing commitments to hundreds of thousands of employees, parts suppliers, and property that won't be compatible with building electric vehicles. They can't simply just end those commitments, so it's naturally going to take longer. Look at what's happening to VW in Germany (
https://electrek.co/2021/11/04/vw-ce...electric-fast/). It's difficult for a complex large company to just pivot. You're not replacing an engine, the entire production is completely different. Design, parts, manufacturing, sales, etc are all completely different. They need a longer lead timer and 5 years simply isn't enough.
Lastly, and this is the biggest one, there won't be enough batteries for everyone. Telsa brought the entire supply chain under their roof, though they still needed to sign additional battery supply agreements. Ford and GM have signed some supply agreements, but only really Ford has any real supply in place and still not enough. Those who sign last will pay a lot more for the same batteries. Currently China owns or controls 80-90% of the entire supply chain for the batteries, though despite being very late both North America and Europe are trying to fix this. This will really affect operating margins and the difference in costs will not be a difference in quality but in logistics. It takes 2-4 years to build new mineral refining capacity, but it takes 8-10 years to build new mines. It's going to be tough to be the last one to the trough