2024-The Year Everything Got Serious & Upsetting in EV World [and political world too]

Investment Analysis Clubs Macro Economic Trends and Risks
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https://insideevs.com/features/745841/evs-biggest-stories-2024-roundup/

In just a few months, Musk went from vowing not to donate to any political candidate to literally being in the White House with President-elect Donald Trump, whose campaign he supercharged with his dollars and the reach and influence of X. And in doing so, Musk led much of the Silicon Valley billionaire crowd along with him, paving the way for a remaking of the American government to suit their financial interests.

I hadn’t noticed that factoid.

Does this mean high tech are M*GA supporters. Nope. Methinks they have hopes that the orange one will keep his mitts off tech due to their financial support.

2024 hasn’t been the best year for Tesla. While it remains the top seller of EVs in the U.S., sales are slipping as traditional car companies and new players alike get into the EV space. Globally, it’s been dethroned by China’s BYD.

But Tesla was probably always destined to cede market share to other automakers. Two so-called “traditional” ones had a remarkable year on the EV front: General Motors, which orchestrated a major turnaround after 2023’s slate of disasters, and South Korea’s Hyundai Motor Group, which has fully transformed from industry also-ran to a world-class technology leader.

Both automakers have likely exceeded 100,000 EVs sold in the U.S. this year alone

This was a very tough year for the entire continent’s auto industry, especially big players like Volkswagen and Stellantis (and the latter has plenty of headaches stateside, too.) Their EVs face uncertain demand and constant delays. They’re losing sales to new players from China. The entire European new car market seems to have hit a wall. Labor costs are soaring and car factories are set up to make too many cars that then can’t be sold. And Europe’s once-promising battery industry is suddenly on life support.

Ford is gambling on more hybrids and an EV market that won’t really heat up in force until almost 2030. That’s still a risky gamble that could put it behind many other rivals.

BYD. Nio. Xpeng. Xiaomi. Were any of those companies really on your radar a few years ago—or even one year ago? They have to be now.

For most of my lifetime, Japan’s auto industry represented the standard of the world (sorry, Cadillac) for quality and innovation. It’s hard to argue that’s still the case in late 2024. The Japanese automakers’ famously methodical and meticulous approach is no match for the speed of disruption heralded by Silicon Valley and China alike. And the cracks really started to show this year.

Allowing the rest of the auto industry to access Tesla’s chargers—and ultimately, switch to its plug type—will be a game-changer for road trips and easing range anxiety. It won’t fix everything, but it will be a big upgrade for today’s owners of non-Tesla EVs.
Another reason to buy a cheaper EV that is not Tesla?

And in the U.S., a lot of that was driven by ultra-affordable lease deals pushed by both the automakers and a loophole in the Inflation Reduction Act that gives any EV the full $7,500 tax credit when it’s leased. This is how I picked up my own Kia EV6, by the way. Almost 80% of new EVs sold this year were leases.
I now believe leasing may be the way to go with new vehicles-EV or IC. New vehicles are complicated interconnected electronic items in which a glitch in one component shuts off other components. Lease a vehicle while it is still in warranty. Then rinse and repeat.

This guy is a car repair savant. Dealers send him vehicles that their techs cannot figure out.
In this case his wife’s 2019 minivan with 110,000 miles was dead in the water due a rear camera problem.
At 11:15 in the video the guy begins a rant about the complication of vehicles with unnecessary amenities by the auto industry. That a problem with a petty accessory can leave you stranded. And the average joe’s life comes to a screeching halt.
But that is the world we live in.

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Sure, when you have 90% you’re bound to lose some, except with some sort of lock-in like Microsoft OS and its middleware, but that’s rare.

But I believe Tesla is losing it much faster than they needed to. They spent several years mucking around with the pick-up which, in spite of its takeoff (after years of hype) is already tapering off, when what they should have been doing is finding a low, lower end model for the Chinese (and European) markets. The sub $30,000 is walking away with China and I suggest it would do the same with Europe (absent protectionist rules) if it was built there.

But it’s not built in China, it’s not built in Europe, but could be if only there was a design and the will to build it I submit because it’s no longer Elon’s new toy, he had a rocketship company, now has a social media site and a President in pocket and something is bound to suffer .

There is little question that Tesla shattered norms and opened an entire new industry. Like Apple did in 1977 with the Apple ][. And then, oops, Microsoft walked off with all the cookies.

Whether Tesla continues to be such a dramatic force doesn’t depend on sales this quarter or next quarter, it depends on correctly gauging the market and designing the next generation of cars to meet it. I think “self-driving” can be a big part of that, although Tesla doesn’t not lead that development, at least not now. And I am quite skeptical that “taxi” is going to be particularly important in any meaningful way for the next decade, perhaps two.

The slow one now

Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now
Will later be last
For the times they are a-changin’
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But buggies are still slow.

Always true by definition.

Or slowly waning or maybe even waxing.

Maybe, maybe not.

True.

DB2

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You are absolutely correct. Problem is that it is only just becoming possible to make a profitable sub $30,000 BEV.

The president of the China Association of Listed Companies said that the only Chinese NEV companies making a profit in 2024 are BYD and Li Auto. Both companies can only do so by also selling cars that use gasoline. It is only in the past year that battery prices have dropped low enough to make a profitable BEV priced below $30K plausible. This is why those hundreds of Chinese companies selling cheap BEVs are unprofitable.

It would have been pointless for Tesla to try to make a $30,000 car five years. It would have been a money loser. I don’t believe it is just coincidence that Tesla’s announcement of a cheaper car (Model Q?) occurred at about the same time as major declines in LFP battery prices. # Battery cell prices fall to record low in September, says report

I think a big reason to build the cybertruck was to develop and figure out how to mass produce new tech. This includes steer-by-wire, 48V power system, 800V architecture, Megacasting with aluminum, and etherloop wiring harness.

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Interesting. Because that’s not what BYD says. According to them, they are already profitable just in the EV business - not including their other lines.

Yes, BYD's EV business is currently considered profitable, with recent reports showing a significant increase in net profit, particularly driven by strong sales of electric vehicles and plug-in hybrids, allowing them to even surpass Tesla in quarterly revenue in some periods; however, it's important to note that while profitable, their profit margins may still be lower compared to Tesla in some aspects

Oops. Tesla announces today: it sold fewer cars in 2024 than in 2023. So sad. Meanwhile BYD EV sales are up 40%, and they don’t even have the US or much of Europe as a market. Yet.

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I wonder. Does anyone have the history of the volume of Chinese makes going to the US or EU versus the volume of US or EU makes going to China versus US or EU makes being manufactured in China and sold there. For completeness add China makes made in US or EU and sold there.

Obviously, Tesla is a big chunk example of US marque made and sold in China. Are there similar size versions either way previously? I gather that at one point there were some number of US or EU marques sold in China as luxury cars, but did that ever amount to much.

Seems to me there is a lot of noise, but I wonder much history. I have heard stories about really cheap Chinese cars and how they would be bound to sell a lot in the US or EU, only bringing them up to code and such meant they weren’t so incredibly cheap any more. Or, is that just some prejudicial story?

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You are getting sloppy with your definition of EV (not surprising).

Google AI defines “EV” as including BEVs, PHEVs, hybrids, fuel cell vehicles. That’s pretty broad.

The DOE defines “EV” as:

An EV is defined as a vehicle that can be powered by an electric motor that draws electricity from a battery and is capable of being charged from an external source. An EV includes both a vehicle that can only be powered by an electric motor that draws electricity from a battery (EV) and a vehicle that can be powered by an electric motor that draws electricity from a battery and by an internal combustion engine (plug-in hybrid electric vehicle). Alternative Fuels Data Center: Electric Vehicle (EV) Definition).

To reduce the confusion, BYD doesn’t use the term “EV” but instead defines a new acronym. From the BYD web site:

Over the last few years, electric cars have become more popular with more of them appearing on our roads. Typically, these are referred to as EVs. But there is another term that you may not be familiar with — NEV.

Not to be confused with ‘neighbourhood electric vehicle’, NEV stands for ‘New Energy Vehicle’ and is a term used to describe all types of electric vehicles, from battery-powered fully electric vehicles to plug-in hybrid cars.

BYD is the No.1 NEV Maker, so we’re well placed to explain everything you need to know about NEVs. Below, we’ll take a closer look at different types of NEVs and the benefits of these vehicles.
What is a NEV? | Electric & Hybrid Cars | BYD Europe

BYD sells PHEVs and BEVs. This year most of its sales came from plug-in hybrids (PHEVs). PHEVs are profitable for most automakers, including I am sure BYD. It remains unclear whether BYD is making a profit from its fully electric BEV models. To my knowledge BYD has never publicly shown profit margins from its BEV line nor has it ever stated it makes a profit from its BEV lines.

Yes, this was a good year for NEV vehicles under $30K. Nevertheless, Tesla still sold 1.789M BEVs for the year compared to 1.76M for BYD and so is still (albeit barely) the leading BEV maker. This despite selling their products for twice the price on average than BYD. And next year Tesla will have lower priced models for sale, which means that they will be going head-to-head with BYD for the first time. Should be interesting.

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Nothing for 2024, but for 2023 the EU exported about 359K cars to China, while China exported about 707K cars to the EU. Because the Chinese cars were much cheaper, the Euro value of EU exports was much higher than vehicle imports - 19 billion euro vs. 13 billion.

In the US, we imported about 104K vehicles from China in 2023. I couldn’t find 2023 figures, but apparently our car exports to China in 2022 were about 150K. So a much smaller bilateral trade in completed vehicles than the EU-China relationship.

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To my knowledge as well. However, you might be making a mistake in assuming that because Tesla doesn’t do it, no one else can. Last year, BYD sold 1.76 million fully electric vehicles vs. 2.49 million hybrids. It would be hard to lose money on 40% of your vehicles and still be profitable overall.

FWIW, BYD’s Dolphin Mini sells for about $18,000 in Mexico and about $14,000 in China.

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I mean - maybe? Musk has alluded to Tesla providing more affordable models from time to time on earnings cals, but there haven’t been any formal announcements of new models. While analysts like to speculate about a possible Model 2/Model Q, Tesla itself has been far more cagey talking about that their more “affordable” offerings might look like. When asked about it on the last earnings call, their response was pretty vague:

Sure. I mean, as Elon and Vaibhav both said, we are on plan to meet that in the first half of next year. Ambition has always been to lower the cost of our vehicles to increase the adoption of sustainable energy and transport. Part of that is lowering the cost of our current vehicles, which is where all of the personally owned vehicles that we sell today come in.

But the next stage in that, really as it fits into AI road map, is when we bring in robotaxis, which lowers the initial cost of getting into an EV – and those – that’s really where we see the marriage of EV road map and the AI road map.

They haven’t said anything that would lock them into having anything comparable to the BYD product range this year, rather than (for example) having some modest price cuts on their existing models and then eventually coming out with a Cybercab that only costs them $30K to make.

So what they might be planning is some minor price cuts and introducing a Cybercab product in a trial mode in a few Texas cities like Waymo does. It might not be anything like being able to actually purchase a car for yourself for <$30K before subsidies.

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China EV maker doubles the price to EU consumers.

https://insideevs.com/news/718036/byd-major-ev-markup-prices/
Here’s Why BYD Is Charging Twice The China Price For EVs Sold Abroad

BYD wants to rake in the big bucks by adding significant markup to its EVs sold in Europe or the Americas.

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My bias is based more along the lines of that I am skeptical that BYD can make a profitable cheap BEV while a couple of hundred other Chinese companies cannot. BYD is clearly trying to eliminate much of the Chinese competition in a brutal price war. You do that by pricing below cost and holding on longer than most everyone else. Having 20% of their revenue coming from battery sales also probably helps.

Oh sure, if it doesn’t happen then 2025 will be another down year for Tesla. But there is certainly a lot of smoke about cheaper Tesla vehicles. Plus wouldn’t it have been a huge mistake to say definitively that a low cost Tesla was coming in 6 months (if true)? That would have been a quick way to totally kill Q4 sales.

Musk seems more adamant about 2M cybercabs per year by 2026. Suppose the unthinkable happens and Tesla does solve FSD and does get it to run on a $30K vehicle and it does get regulatory approval. How close to 20M vehicles/year could they get by 2030?

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Well that’s a pipe dream, for sure. Give the regulatory hoops the others have to jump through, there is a zero chance that Tesla will have anything close to that number in 24 months time.

Suppose the unthinkable happens and Tesla does solve FSD and does get it to run on a $30K vehicle and it does get regulatory approval. How close to 20M vehicles/year could they get by 2030?

If they got to 5% of that number I’d be surprised but then I doubt the entire business model. If people can afford a shiny new Tesla - even a lower priced one - I am skeptical they will send it off into the wild to be (potentially) trashed before it comes home. [Having an Air BnB is a different animal entirely for 100 reasons. Not at all comparable.] Put this pipe dream on the same table with “We’re all going to be driving in underground tunnels soon.”

Unless Tesla decides to capitalize it and run it itself as a business, but that is a lot of metal to own, unlike the Uber/Lyft model which is asset-lite and relies on strangers to absorb the capital and maintenance costs entirely in return for a percentage of the action for match-making.

20M vehicles per year? Not a chance. That would be 25% of the market for passenger vehicles every year. Maybe they could hope for a tenth of that.

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I don’t think it would have been a huge mistake. If you’re bringing a new model to market at a significantly different price point than the Model 3, you’re going to lose some Model 3 sales due to Osbourning. That’s somewhat unavoidable. You want to keep the period between the announce and the sales somewhat short, and not something like the 4 years between CT unveil and deliveries. But six months is probably way too short to be realistic. If Tesla was planning to have a new model available for sale in the first half of 2025, it’s unlikely they wouldn’t have announced it yet.

Nowhere close. They wouldn’t be able to scale the production capacity to get to that number in five years; they’re probably three years from getting Monterey permitted and built and ramped to full production, and that’s the new site that’s furthest along. And the entire U.S. light vehicle market is only about 16 million cars, with passenger cars (which is what the Cybercab is aiming for) only making up about 3 million vehicles.

A fully autonomous vehicle would be an enormous success for Tesla and it would make them a ton of money, but they wouldn’t be able to get to a 20 million/year rate of sales/operations in only five years.

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What makes you think no one else can? There are at least 20 companies making sub $30k EVs in China, and some are doing very well. Some will not survive, obviously.

Hmmm. Your math ain’t mathin’.

In 2021 BYDs net margin was 3.73%. In 2022 it was 16%. In 2023 it went to 24%.

Gross margin? 2021: 13%. 2022: 17%. 2023: 20%.

Operating profit? 2021: 2%. 2022: 4%. 2023: 5%.

Notice a trend yet? Really hard to do that if you’re selling 40% of your output below cost. Why not just admit it? BYD is producing big volumes of EVs at substantially less cost than, uh, that other company, and selling a ton of them - even as the size of their potential customer base is less than half of Tesla’s.

No, I am not cheering for a Chinese company or three to destroy the American car industry, but it appears that it is happening.

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Because that is what the president of the China Association of Listed Companies said, and I think he knows the situation a lot better than you do, hard though that might be for you to believe.

The other trends you don’t mention are the success of the battery business where declining raw material costs probably means increasing margins, the increasing proportion of sales coming from PHEVs relative to BEVs, and the growing BYD export sales where BYD car prices are substantially higher than in China. All these trends will raise margins.

No, you just hate Elon Musk so much that it biases your view.

That is an opinion that you cannot support with data. What is the production cost of the BYD equivalent to the Model 3? I don’t know the answer and I really doubt you have any clue.

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I disagree that Tesla’s startup path was like Apple’s.
When Apple started there were also 500+ other companies making small personal computers and/or chips, boards, components and software. (There were magazines with 100s of pages of ads for these parts).
The spec for the S-100 bus used in Intel 8080 computers (Altair + many others) was defined in 1974. The poplar (at the time ) CP/M OS ran on most of these. We also had the TRS-80 (Radio Shack) and Commodore PET, both shipping in ~1977.
And, of course, IBM entered the market…much much later…in 1981

Mike

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Why does that matter? You have said the craziest things (allow me to quote:)

Tesla’s sales will be up 50% for years.
BYD is selling below cost.
Self driving cars will look like toasters.
20m a year by 2030.

Actually what he said is that there are (currently) TWO selling low price EV cars and also being profitable: BYD and Li Auto. That doesn’t mean there won’t be more, I fully expect at least three or four, eventually. A population base as large as China? Maybe many more. Heck, the US supported the Detroit 3, the Tokyo 3, and an assortment of European manufacturers for decades from the 70’s to the 00’s. Not to mention Studebaker, Packard, DeSoto, Nash & Rambler (AMC), Checker, Pierce Arrow, Saturn, Wiley’s, and others, all of which had a profitable run earlier in the 20th century - sometimes for years, often for decades.

No, you just hate Elon Musk so much that it biases your view.

Nonsense. I am fully capable of appreciating his achievements without having drool escape from the sides of my mouth. I’m can also see what are clearly wild exaggerations, of which there are many. I expect “20 million a year” to be one of the biggest whoppers yet.

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https://insideevs.com/news/686083/catl-lges-byd-ev-battery-suppliers-2023h1/

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Oh I’ve said crazy things. But your M.O. is to exaggerate your opponents opposition and then ridicule it. Fun reading but not particularly honorable.

My position was that Tesla sales increasing 50%/year and their selling 20M cars/year by 2030 was plausible. I still think if they get FSD to work in a $30K car they could get to 20m/year, though perhaps not by 2030. Is 20M/year a long shot? Sure, but I don’t think it impossible.

I do believe that BYD is selling all its BEVs priced under $30K at or below cost. That is likely given the fierceness of the price war going on in China

I do believe self-driving cars will eventually look like toasters. It’s the most efficient design for maximizing interior space. And if you are no longer driving the car then the interior space becomes the most important physical element.

Who said there wouldn’t be more? Certainly not me. What I said was that I was skeptical that BYD was making a profitable cheap BEV when these other Chinese companies cannot. That is a statement about the present, not a prediction of the future. As I’ve stated before many times, I believe battery prices are now dropping low enough to make it possible to build a profitable BEV at entry level prices.

That means that I believe the next generation of <$30K USD BEVs will begin to be profitable.

Can’t fool me, I am pretty sure you drool.

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