Western car companies are struggling. Build quality is poor and prices are rising. With the dash to electrification has The West ‘shot itself in the foot’ and given China’s car industry a great boost:
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The global auto industry appears to be threatened by low cost models from China—EV or ICE. Tariffs can protect domestic production, but exports will be difficult. Prestige models may still do ok but expect low cost competition from China. They say some Lincoln’s are already made in China.
China seems to have identified auto mfg as an opportunity.
The US car industry seems hell bent on self destruction. They are loading cars up with electronic junk, charging monthly to use items already paid for and now want have a monopoly on repairs:
My current car was built in 2018. I’ll drive it forever. In the unlikely event that it is written off I’ll get another built in 2018 or earlier
It’s more than that. If anything the Western companies were too late in going electric, and then had FOMO make them jump in way to fast to “catch up”. Add to that the West’s (especially the USA here, perhaps exclusively) infatuation with large, gas guzzlers and then advertising/marketing them in a way that the smaller cars lost appeal. With quality that still lags Japan.
The future of cars IS electric. At least it seems GM understands this (and their electrics are really good).
Build quality has been bad for 50 years. The Japanese capitalized on it in the 70’s and 80’s. The Germans capitalized on it in the 90’s and aughts. Detroit can’t seem to learn.
The rush to electrics was a belated “Holy Crap” moment when they saw Tesla’s (temporary) margins and fell all over themselves in the greatest FOMO rush since the minivan.
If there was ever a major industry in need to new leadership, it’s Detroit’s (former) Big 3. But the incentives aren’t there: their bonuses are predicated on the next 3 months, not the next 10 years, so that won’t change. Look at who has taken them down: Japan, with patience for building the industry and quality techniques honed over decades (ironically first introduced by a USian). Germany, with pride of production and craftsmanship. And now China, which does not slavishly worry about the next quarter, but the next quarter-century.
This will not change (absent a wholesale rejiggering of the industry, which cannot happen due to structural impediments). So: this will not change.
Factory ZERO (Detroit): GM reduced production at its flagship EV plant to a single shift, effectively cutting output by about 50% and indefinitely laying off 1,200 workers. This facility produces the GMC Hummer EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac Escalade IQ. [1]
Ultium Cells Batteries: Operations and cell production at joint-venture battery plants in Warren, Ohio, and Spring Hill, Tennessee, have been temporarily paused, resulting in the temporary layoff of roughly 1,550 workers. [1]
Van Production: GM canceled the BrightDrop electric commercial van, citing a slower-than-expected development in the commercial EV market. [1]
GM has taken a $7Billion writedown to reducing its EV footprint and re-working its production footprint. Mary Barra “the leader in vehicle electrification” does still claim EV’s are its ultimate North Star. But, the capital allocation decisions for now suggest otherwise.
I agree the future is electric but I am unconvinced long term that GM in its current form will be a substantial player.
Everything you pointed to, FOOLME45, is the result of the current administration pushing the past (fossil fuels) over the future (EVs). And for some reason Musk helped him win. (oh yeah, something about him belonging in jail and needing another felon in charge to keep them both out of prison).
Ditto. However, it has several electronic gizmos that I have never used like parking assist. And one that I now turn off every time because it contributes to the wear and tear of the transmission - auto stop/start. Do like the proximity sensors, back up camera, and adaptive cruise control but everything else is meh.
Because of all this mandated garbage, I frequently contemplate restoring the '56 Chevy.
The EV market in the US is going to need to figure out how to compete on a level playing field. I have no interest in dedicating tax dollars (while we run a massive deficit) to subsidizing specific manufacturers.
Musk has said he is personally opposed to EV subsidies. Musk’s endorsement of Trump, as much as you dislike it, is his right and prerogative to lend his support and financial resources where he sees fit. Nobody cares if Reed Hastings or Alex Soros involve themselves in the last election or the 22 billionaires that provided financial support to Biden in the 2020 race. I’ll remind you that the Harris campaign amassed and spent nearly 3x the Trump Campaign. It tells me it’s less about the money and more about the message.
Musk has spent the majority of his life as a left leaning democrat. Like many, his position is the party moved and stands for things that he can no longer support. Chief among them were the rise in efforts to suppress speech and what he has described as the mind virus of Wokeism. Beyond that, I think he thought the current administration might genuinely attempt to address Govt Spending and Deficits. Admittedly, it has not done so.
The reality is the US consumer has far different driving habits and requires broader versatility and an average budget that is not well suited for the current EV lineup. The manufacturers will need to address these issues to see broader adoption and other than an outright mandate, govt policy will have little impact in moving the needle.
Grants and Subsidies, particularly as it relates to ongoing product purchases, are two entirely different things. You can choose to conflate them if you like.
I know, speech you don’t like is perfectly acceptable to suppress. The left went and continues to go off the rails. It’s just the reality and at this moment it is starting to get swallowed by the Socialist Movement. These are all things Musk, other business leaders, and many Americans saw and warned about as a bridge too far.
The beauty is we’ll get to see this experiment play out in real time in New York City, Seattle and elsewhere. So far, Seattle is hitting a record structural deficit of nearly $500 Billion. NYC is hitting record avg rent costs. It has 60,000 units sitting vacant where it is cheaper for the landlords to leave them vacant rather than pay the costs to update them and then rent at a loss under the current rent freeze. Meanwhile, the current mayor is proposing 18% pay increases for himself and members of the administration. But, this what they voted for, good luck but the rest of the country doesn’t need to join in the insanity.
I am curious if you own/purchased an EV and if so did you get a tax subsidy? If so, is that what tipped the scales for you? It seems logical that EV’s will be the future but the range and charging need to improve, at least for the American market and then the price needs to be on parity.
I think that much of the problem is that Western manufacturers were thinking that they could slowly move their production/sales into EV at their own pace. Some Chinese companies such as BYD started from nothing and were not hampered by old technology/group think. They just went for it and left Western manufacturers for dead.
A big mistake by Western governments/business. Now, rather than realising this, Western car manufacturers are trying to cling to the past.
Except for Tesla that just happens to have a fully owned Chinese factory.
It wasn’t the West that ‘shot itself in the foot!’ It was the incumbent ICE makers that either missed the boat or built leaky boats. I was just watching a uTube podcast about how GM ‘shot itself in the foot!’ by designing a platform that could be used to build multiple models from Cadillac, to their monster truck, and all sorts of whatnots. Sorry, I can’t find the podcast but it was authored by a GM lover.
BTW, it was the West that brought EVs back to life, one Western company that has perfectly healthy foot.
I remember a holiday that I had in Cyprus. The man at the car hire drove an old Hillman Minx . A very old UK car brand, now defunct:
It was hand painted (light blue as far as I can remember) and looked a bit worse for wear. The man obviously got a few comments about driving such an old wreck while hiring out modern cars. He told me “if it goes wrong I can fix, no garage”. I wonder if it’s still running
A better question would be what is the cost of not electrifying? Just the other day, I saw an estimate that the current war has cost the US economy about $150 billion dollars in higher gas prices alone. Some sectors like tourism and agriculture have been hit especially hard. The spike in inflation has caused the Fed to delay cutting interest rates.
I’ve got some more thoughts on this I’ll finish up later.
