Analyzing the Impact of Electric Vehicle Adoption on Traditional Automakers

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With the increasing popularity of electric vehicles (EVs) and the push for sustainability, traditional automakers are facing a significant shift in consumer preferences. This raises questions about the future viability of legacy automakers and their ability to adapt to the changing landscape.

Discussion Points:

  1. Market Share Dynamics: How do you foresee the market share of traditional automakers evolving as electric vehicles become more mainstream? Will companies like Tesla continue to dominate, or will traditional automakers catch up?
  2. Investment Strategies: For investors, what are the potential risks and opportunities associated with traditional automakers transitioning to electric vehicles? How should one approach investing in this sector?
  3. Technological Challenges: What are the main technological hurdles that traditional automakers need to overcome to compete effectively in the electric vehicle market? How can they address these challenges?
  4. Brand Perception: How important is brand perception in the electric vehicle market? Can traditional automakers leverage their existing brand reputation to gain an edge, or will they face challenges in repositioning themselves?
  5. Government Regulations: To what extent do government regulations and incentives influence the adoption of electric vehicles? How might changes in policies impact the strategies of traditional automakers?

Feel free to discuss any other related topics or share insights and experiences regarding the transition to electric vehicles and its implications for traditional automakers.

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I think all agree if 50% of cars sold in 2030 are EVs, traditional auto makers must participate to maintain market share.

From there it gets complicated. They are major employers and govt will probably tread lightly. But who knows what choices will be made.

Recent negative news on EVs in winter and slowing sales may cause reevaluation of all of this. EVs may be our future but it will go slower than hoped. And maybe some problems like shortage of charging stations will get resolved.

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Autos are mostly commodities and the low cost producer becomes the market leader. Tesla’s first principles strategy in manufacturing and in technical innovation combined with the entrenchedness of the legacy automakers gives it several years breathing room. Expert opinion that I respect opines that Tesla and BYD will be the leaders.

If Tesla were just cars I would not touch it! What lots of people miss is that the P/E ration that the market assigns to Tesla is about all the other ventures it is developing. For me the two principal ones are humanoid robots and the grid which includes not just peaker plant replacement but SuperChargers and virtual power plants (VPP). A global view is not just EVs vs ICE but electricity vs. fossil fuels.

The current lull in TSLA’s price is the reflection of a change of pace. In the long term view it will be seen as a buying opportunity (patience grasshopper).

Their problems are the entrenched interests, not technology which Tesla is happy to share with them (access to patents)., Two good examples are the firing of Herbert Diess by VW and labor unions with their political allies. USA, Germany, and Sweden are recent examples.

The model Y sales show that legacy brands are not all that important.

Important as they are often I wish for less. Did you know that a century ago they wanted a man with a red flag to walk in front of horseless carriages so as not to scare the horses?

In the 19th-century United Kingdom, driving a horseless carriage was a huge pain. The “Locomotive Acts” passed in 1865 by the British Parliament set out a series of legal restrictions for drivers, mostly aimed at keeping the road safe for horses, horse-driven carriages, and pedestrians—and restricting horseless carriages severely. For instance, one provision set the speed limit at 2 miles per hour within towns; another required a person to walk in front of the vehicle waving a red flag…at all times . The latter requirement earned the restrictions the nickname “red flag laws.”

If politicians were innovative they would be running companies, not regulating them.

The Captain

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Thank you so much for your valuable reply.

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The history of Ford says yes - then no. GM became the dominant auto manufacturer for the better part of the 20th century not be being low cost but by offering consumers variety of choice. Apple is not the low cost choice. Neither is Coca Cola. Or Bose. Or Nike. Or the New York Times. Or Disney.

And some of those might come true. There is no assurance of any of them. The only one that is a raging success is “car”. All the others are highly speculative, and possible money sinks.

True, but they’re obviously worth something or there wouldn’t be so many of them. Audi, Toyota, Chevy, Lexus, Chrysler, Hummer, Ford, Porsche, the list goes on and on, and they’re all jumping in. They probably won’t all be successful, but I bet some of them will. Tesla has a great start, but then so did Ransom Olds(mobile) and James Packard.

It’s easy to find regulations that were stupid or outdated, almost as easy to find products that were idiotic or dangerous. I offer “kitty litter by mail” (Pets.com) or Lawn Darts. Regulations don’t just fall out of the sky, they come into being because of public pressure to correct grievous wrongs. The FDIC exists because banks took absurd risks with depositors money. The NHTSA makes cars safer. The EPA stops companies from wantonly polluting rivers and streams. Do you really think you’re better off when the FAA lets Boeing “self-regulate”?

The law necessarily follows development, and only rarely leads it. That’s by design, otherwise you have a top-down only system, which stifles innovation. What you complain about is actually a feature, not a bug.

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Your hindsight is wonderful but one must plan with foresight. Sorry, no time machines. :slightly_smiling_face:

The Captain

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Well, I thought a few examples wold illustrate the lie in “the low cost producer becomes the market leader”, and as evidence I offered GM, Apple, Coca Cola, Bose, Nike, the New York Times, and Disney.

I might have expanded the list to include IBM, Gillette, Kodak (in its time), Xerox, Campbells, Kellogg, Caterpillar, Anheuser Busch, Procter & Gamble, Frito-Lay, Polaroid, Zenith (in its time), Marlboro cigarettes, and lots more.

Market leadership comes as a result of many things: brand, distribution, marketing, advertising, leverage among others. Coke won early on advertising but now uses its massive distribution to keep competitors away from the most valuable shelves. P&G uses advertising and launches brands which compete against each other to crowd out competitors. Caterpillar wins on reputation, Nike on innovation, and so on.

Tesla has many wonderful things going for it, but that does not guarantee a seat at the table forever. (As for the “other initiatives” which may or may not come true, only time will tell. They haven’t done much for Apple since the iPhone, for example.)

Anyway, history is often a pretty good guide, if you allow it. But I notice you have many hard-coded beliefs; you should allow some evidence to challenge them once in a while. :wink:

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Have I ever stopped you from challenging? If you expect lapdog fidelity, then I guess I did.

The Captain

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Perhaps you would care to detail your experience with the Apple Watch and AirPods, so that there’s some context for your comment? Not to mention what Apple has done in the payment space.

Apple Vision Pro is too new to know much about how successful it will be.

-IGU-

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I don’t have the watch. The few times I see someone else with it are … too few to comment. Unlike, say, Apple ][s in their time, Macs in their time, iPods in their time, and iPhones (and derivatives) now. So OK, nice toy, not exactly a big driver of sales or profit.

I have the AirPods. Nice. I see them a bit more often, but not really a giant breakthrough either, are they?

Yes, too soon to tell about the FacePod :wink: Maybe that will turn into something with gamers? Or controlling robots? Or people who want privacy on an airplane? No, Apple didn’t make the first cell phone and took over the industry later. But this isn’t an industry yet, so results remain to be seen.

Meanwhile, “cars” are, uh, sort of a big industry. It would have been nice to see some fruit from their very expensive tree.

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Personally I never believed an Apple car was likely. I imagine that Apple has been using the car project for the past few years as a way to do AI research without being noticed. All those AI hires are for doing automotive autonomy, right?

Whether they reap the advantages of that will likely be apparent in the next couple of years. We’ll have to see just how much AI innovation comes out of Apple. That they’re publishing papers like this (Apple Publishes Details About New 'MM1' AI Model - MacRumors) is an indication that they’ve been doing something novel.

-IGU-

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The GoofyPredictionSystem (GPS) got the AppleAutonomousAuto (AAA) wrong? Why would that be?

Apple is about Human Interface with computer electronic gadgets. Apple dropped the word ‘computer’ from the company name when they realized that their interface worked with all sorts of electronic gadgets. Some might remember how difficult it was to set electronic clocks…

Still nothing about settings the clock, but I’d start with holding power for ~5 seconds, and then start holding combinations of power and one other button at a time for ~5 seconds, etc.

Not enough Apple expertise to make cars.

The Captain

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EV adoption is limited only to those that own a home. You need a special plug
etc. IMHO

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  • you could rent (not own) a home that has a charger of use an L1 (120v) charging cable
  • the apartments nearby my office have dozens of chargers
  • if offered, you can charge an EV at work
  • you could use a local Supercharger. Within ~5 miles of my house there are 6 Supercharger locations with about 80 stalls. Granted, CA and Silicon Valley are on the leading edge. More EV leads to more chargers.

Mike

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Can get a little pricey, if you don’t have free Supercharging as part of your vehicle package. Media reports say that Superchargers cost about $0.25-0.50 per kWh. At that point, your “fuel” costs for the EV are going to start approaching those of an efficient ICE - still lower, but not by much.

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I was giving several options that were contrary to the claim that you had to own a home to buy an EV.
There are also some non-Tesla charging networks that offer paying a monthly fee and you get a lower per kwh rates. These tend to pay off with just a couple of charges per month. Good if you live near one of these.

Mike

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Yes, it’s possible, but it’s less convenient that filling up with gas. It takes longer, there are (far) fewer charging points than gas pumps (in fairness, there are also fewer EVs than ICE).

There is quite literally never a time when you have to wait in line to fill up with gas (OK, once in a while at Costco) you can just go to the station across the street. Not so with an EV. And it takes 2-3 times as long to “top up”.h

So yeah, it’s coming, but it’s nowhere near parity yet. One advantage, of course, is charging in your garage - then then that’s not the point of this particular argument, is it?

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Depends… if one doesn’t drive much most days, then topping up with a plug in a 110v socket overnight may actually be more convenient than gas, even in a rented home.

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A 110v socket adds about 2-3 miles per hour as it charges. So overnight you can add 20-30 miles. It’s enough to get you to the grocery story and back, but I wouldn’t call it “convenient”, especially if you have a long trip scheduled a few days hence. It can take 3-4 days to get a “full charge”. Still, I suppose it’s better than being out of gas in your driveway, for which there is no help except a trip to the gas station with a gas can.

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Today’s WSJ has an interesting piece that fits this thread:

These Tesla Wannabes Are Running Out of Road

Electric-vehicle startups face cash crunch, Journal analysis finds

Electric-vehicle startups [were flying high] just a few years ago. Now many are focused on survival.

At least 18 EV and battery startups that went public in recent years were at risk of running out of cash by the end of 2024 as of their most recent filings, according to a Wall Street Journal analysis. They include companies such as [Nikola] and [Fisker], which attracted investors with bold promises to transform the industry and fight climate change with their electric trucks and SUVs.

That was before they stumbled amid rising costs and [manufacturing problems]

Three companies—Lordstown Motors, Proterra and [Electric Last Mile Solutions] —have filed for bankruptcy. Battery maker Romeo Power and charging firm Volta have been sold at a fraction of their valuations when they went public. Several of those remaining say they are working to reduce costs

https://www.wsj.com/business/autos/electric-vehicle-startups-risk-money-64c8dec2

Maybe there’s some value in being “an old line combustion engine manufacturer with an established network of dealerships”? Or at least having some cash flow to prop you up through the transition?

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