NACS uses thick Aluminum bus bars for charging rather than more costly copper cables in CCS. It saves Ford money and is a huge marketing win for their fleet and new customers being able to access the still-currently largest Level 3 network in North America.
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.
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.
Last edited by Street Pharmacist; 05-28-2023 at 02:47 PM.
The Following 2 Users Say Thank You to Street Pharmacist For This Useful Post:
Tesla is in the process of having their lunch eaten by Chinese companies. It won't be many more years before it happens in the rest of the world, too. Their philosophy of cost-reducing, feature removal, and inability to understand customer service is going to bite them, hard. People get pissed when they spend 70k on a vehicle and it's built poorly, and your only hope at customer service is through an app. You can only get by building econo-boxes for so long before you need to add features in that people are used to having, you know, big extras like grab handles. Tire munching acceleration only gets you so far. Their "exponential growth" isn't long for this world.
And FSD isn't as red hearing at all, it's what Musk is staking the company on, and why so many controls are getting removed, or making them annoying to access. He actually believes it is going to happen soon. It is not. A touch screen to shift gears? Ya, that should be fun for 3 point turns, or rocking out of a snow rut. Dumb.
Isn't that just a function of how new Tesla is? About 75% of their total sales have occurred since 2020 and nearly 95% have happened in the last 5 years.
So 83% of their customers being new to the company isn't remotely surprising. Their low "one and done" rate of 39% is more impressive (vs. an industry average of 58%). But again, because virtually none of their customers are driving cars they bought more than 3-4 years ago, the people who've bought a Tesla and then returned to market probably aren't your average customer like they are with longer-tenured companies.
The Following User Says Thank You to opendoor For This Useful Post:
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.
Yeah, I think traditional automakers are going to potentially be in trouble. Many of them can't even produce ICE cars at the rate they did 10 years ago, and now they're going to transition to EVs successfully?
Teslas have their issues, but the company can actually build enough to meet the demand and do it profitably. Not a single legacy car company has shown an ability to do either of those things, and it's not going to get easier. And Tesla has enough profit margin that they can cut prices a fair bit still if they want to undercut their non-Chinese competition. One of the benefits of being a newer company run by a union buster.
That said, I also wouldn't assume that things will continue to play out as they are now. Chances are one or both of these things are going to happen:
1) None of the targets for EV adoption pan out (basically ICEs remain dominant for the foreseeable future).
2) North America and European countries put huge tariffs on Chinese EVs to keep domestic manufacturers competitive.
The Following User Says Thank You to opendoor For This Useful Post:
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.
Not blind at all. You keep saying late to the party and I don't think you realize the party hasn't started. There's little doubt EV sales are growing rapidly but still represent less than 15% of all global sales. Even if legacy automakers were up to speed to build millions of EV's today they wouldn't sell many more than they already do because it still represents a small part of the overall pie. If we get to the point where 50% of all vehicles purchased worldwide are EV's and legacy automakers are still behind then you are on to something but we aren't there yet. I respect that you do your research and this are enthusiastic about the topic but like a lot of people you are guilty of accelerating timelines and making predictions based on reading a lot of hot take internet headlines. USA, Germany, France, Japan, etc have huge political power and will ensure their manufacturing markets are protected.
The landscape will be altered but I don't see it being this drastic change you prediction that it doesn't look good for OEM's. There will be challenges but most will adapt and some will have to accept lesser market shares as China will be a difficult market to crack but for example the Germans will always have their luxury niche. The Chinese can throw their hat in the luxury ring but they will find out just like the Americans and Japanese that rich and wealthy want the cachet of German luxury cars. The American brands will always be front and center with pickup trucks and large SUV's. I'm not bullish on Stellantis but the Jeep brand will go on one way or another. The China market is going to alter global sales but I certainly don't see a Chinese takeover in North America or Europe nor do I see Ford, GM, Toyota, Honda, Nissan, VAG, German Luxury brands going anywhere. The one positive of the pandemic is that automakers figured out that less sales can be more when it comes to profits. GM has already pulled out of all their money losing markets like Europe, Russia, India, Australia, etc and are better for it. So bottom line is that I don't disagree that the automotive landscape will change but a lot of the big players will be the same.
Last edited by Erick Estrada; 05-29-2023 at 07:42 AM.
Either I'm an idiot, or OEM doesn't mean what you guys think it does.
Both or highly possible.
The term has evolved in this space and is widely used to refer to traditional automakers rather than the original meaning referring to original vs after market
The term has evolved been misused in this space and is widely used to refer to traditional automakers rather than the original meaning referring to original vs after market
Words matter!
It's probably becuase many Tesla boosters don't really understand what they are talking about, mix up terms all the time, and have less than a surface level knowledge of most of the things they are convinced will change the world in about 6 hours from now. Kinda like people use SKUs as a stand in for product models, in an attempt to sound like they know what they are taking about.
That's not to say everyone here is like that, but it's the impression I get reading Tesla forums and tweets.
The term has evolved in this space and is widely used to refer to traditional automakers rather than the original meaning referring to original vs after market
How can it evolve? It's still a pretty important word for the same companies it now represents.
For example, the OEM for BMW brake pads is Zimmermann. The exact brake pads that come on a BMW are "OE", and sold at the dealer, branded BMW. Zimmerman likely sells the exact same brake pads under their own name, the "OEM" option. Other people make brake pads for BMWs, and those are the "aftermarket" option.
Now OEM means .... BMW itself? Like someone else is making the same cars that BMW makes, if you want to buy an "aftermarket" one?
I think I'm with Fuzz. This sounds like tech bros trying to talk car.
The Following 6 Users Say Thank You to Bill Bumface For This Useful Post:
I've literally never read a Tesla forum and certainly am not a Tesla fan. I wouldn't buy one myself for a few reasons, including servicing issues when you're not in a major center, and they're expensive for what you get imo. This is the only forum I've ever posted on or really read. My info comes mostly from a wide range of energy transition podcasts, and I really only listen to ones that feature actual experts in their field. I'm as fast from a tech bro as you can get. Just a nerdy Pharmacist who finds the whole energy transition fascinating. I too was a bit confused about the term OEM being used that way, but can use a better term "legacy automakers" from here on out.
But for context, here's McKinsey using the term that way:
Ya, that just shows why it's such a bad choice of use. The Forbes article is so nonspecific they could actually be taking about OEM's, not vehicle manufacturers. I don't even like the term "legacy automakers" because it makes them sound obsolete, when they are transitioning. Will they be "legacy" when they are selling more EV's than ICE's? Established automakers vs new entrants captures the idea better, IMO.
The Following User Says Thank You to Fuzz For This Useful Post:
Ya, that just shows why it's such a bad choice of use. The Forbes article is so nonspecific they could actually be taking about OEM's, not vehicle manufacturers. I don't even like the term "legacy automakers" because it makes them sound obsolete, when they are transitioning. Will they be "legacy" when they are selling more EV's than ICE's? Established automakers vs new entrants captures the idea better, IMO.
I suppose you could argue Tesla is now pretty established as an automaker. You are totally correct when you say they are transitioning but a lot of folks are guilty of thinking they are in trouble and on their way out. I'm guilty of using legacy only because I don't use OEM and I don't know how better to separate the longtime ICE automakers to the upstart EV automakers.
Ya, that just shows why it's such a bad choice of use. The Forbes article is so nonspecific they could actually be taking about OEM's, not vehicle manufacturers. I don't even like the term "legacy automakers" because it makes them sound obsolete, when they are transitioning. Will they be "legacy" when they are selling more EV's than ICE's? Established automakers vs new entrants captures the idea better, IMO.
I don't disagree. The old rule of using language for the audience you're speaking to probably applies here.
Teslas have their issues, but the company can actually build enough to meet the demand and do it profitably. Not a single legacy car company has shown an ability to do either of those things, and it's not going to get easier. And Tesla has enough profit margin that they can cut prices a fair bit still if they want to undercut their non-Chinese competition. One of the benefits of being a newer company run by a union buster.
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.
Last edited by Hack&Lube; 05-30-2023 at 12:00 PM.
The Following 2 Users Say Thank You to Hack&Lube For This Useful Post:
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 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.
Absolutely not. At least with most other manufacturers, we get the jobs and economic benefit. Having China dump their cheaply produced EV's that don't have to follow things like reasonable wages and environmental standards would just mean ceding manufacturing capacity to them, as we have in so many other ways.
The gigapress doesn't form the whole car, it forms the front and back sub assembly frames. It absolutely does save money, time and human labour. But it's not the full car in one piece.
The problem with cost reduction is at some point, you've removed all the reasons people might pick your vehicle in a competitive environment. Without luxury features, like, uhm, grab handles, you start to lose customers.
