Pushback against EVs

As if the media were the good measure of anything but editorial bias.

January 2023 was the month the Tesla butterfly flapped its wings by cutting prices drastically, not because it had to as some bears claim but because, being the low cost producer, it could. This price cut, which some competitors are already imitating, marks the shift of EVs to mass markets which was Elon Musk’s target since the beginning.

The signs are everywhere including some oil and gas states calling for a ban on their worst fears, the EV takeover. On the positive side, giants like ABB are getting into the infrastructure buildout business.

I had some dreadful thoughts, what if ICE incumbents can’t ramp up EV production profitably ASAP? What macro economic consequences could that have?

Akio Toyoda is either defending an indefensible position or hiding a strategy with a poker face that Japanese master. Once when I had a job hiring executives for a Japanese company in Caracas, friends warned me that ‘hai’ does not mean yes, only ‘I understand’ and that the Japanese put on totally inscrutable poker faces when negotiating. That was an understatement, it was like talking to marble statues that would ask question and only reply ‘hai.’ The session ended when the Japanese smiled and I had my contract which took me completely by surprise.

The Captain

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An excellent thought and question. What happens if you spend tens of billions to build that ballfield in Iowa and the bleachers are filled?

Entirely possible that it could lead to massive subsidy payments to both manufactures and buyers.

DB2

Speaking of subsidies…

The firm had planned to build a giant factory to make electric car batteries in Blyth, Northumberland. Ministers had hailed it as a “levelling up” opportunity that would boost the region’s economy and support the future of UK car making. But Britishvolt struggled to turn a profit and ran out of money…

The UK currently only has one Chinese-owned battery plant next to the Nissan factory in Sunderland…Industry experts have said the UK will need several battery factories to support the future of UK car making…

Delays to construction meant £100m of public funding never materialised. With costs rising and no firm orders, the money ran out.

DB2

Egads. It would not be good.

I’ve said it before I’ll say it again. I think the manufacturers are going to EV not just because of climate concerns, not just because of regulations, not just because they believe the market is going that way. I think they have had enough of ICE development. The complexity of engines and transmissions these days is off the carts. Impressive results, but off the charts. I think they look at the EV simplicity and simply drool.

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This is very likely to not be correct. A large part of their profits come from the parts they sell to repair and maintain the vehicles they’ve sold. Parts are like an annuity to them, that lasts for 15 to 20 years after the inital sale of the car.

The engineers may like the simplicity. But the folks who track profit (“beancounters”) do not.

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I suspect if it really isn’t feasible legislators will simply kick the can. 2035 is still a long way out. I believe there will be enough time to see if it all can come together before the gong sounds.

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That may be behind automaker’s push to charge subscription fees for features in the car to work, like heated seats.

Steve

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My money would be on the latter. In addition to the poker face you are familiar with, they are also squarely in the “underpromise and overdeliver” camp. Toyoda called out California’s 2035 mandate as “difficult to achieve” not impossible or easy. I’m sure Toyota will have some electric vehicle options ready to go a couple of years before 2035. CA is far too big a market for Toyota to simply abandon just because their home market might be amenable to hydrogen instead of (or in addition to) electricity.

Frankly, making an EV isn’t that hard any more. The difficult engineering has already been done. The issues are now about sourcing components (batteries being the most critical).

And don’t forget the crossover between hydrogen fuel cell and battery electric vehicles. The two differ only in that the fuel cell vehicle produces it’s own electricity while the BEV needs to store it. The rest of the vehicle is electric - electric motors providing the power. Toyota has been working on fuel cells for quite a while. I’m not sure that they will ultimately be successful, but there is a lot of cross over learning with BEV. So even if fuel cells don’t work out, the efforts will not have been completely wasted.

–Peter

You missed the point. The company can build wherever it chooses.

If potential employees refuse to work in that state, what does the company do? Remember: The people are potential future employees, so they control where they might work.

The company is going to lose a lot of money because the people they want for that facility went to work elsewhere. Been down THAT path–it went splat really fast (the company move never happened).

Employees do NOT get the promises from the state–the company does. And the company does NOT pass those fat subsidies on to (current/future) employees. So promises from the state are irrelevant to potential future employees who likely live in other states.

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Story time. I was at the RS annual manager’s meeting in Dallas one year. It must have been the head of advertising that asked the breakout session “did you notice how crappy the catalog looks this year?” Many managers answered in the affirmative. The honcho explained what happened:

J C Penny had relocated from NYC to the Dallas/Ft Worth area. They moved the big dogs, but left a lot of staff behind in NY, and hired new people in DFW. Penny’s had raided Tandy’s advertising department, making off with most of the layout and artwork people. Penny’s could pay them more than they ever dreamed of making at Tandy, and still pay a bunch less than they had been paying the NY people. So, effectively, the catalog that year was put together by the left-overs that Penny’s didn’t want, and whatever new hires they could scrape up.

This article talks about the NY Penny’s employees concerns with Texas, and the company’s attempts to sooth them. A lot of people were not soothed. Didn’t stop Penny’s making the move though.

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And the moral of that story is, Don’t move to Texas or you will end up like JC Penney’s. :joy:

Andy

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Or Radio Shack, which Charles Tandy moved to Fort Worth from Boston.

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Two things are going to be impediments to non-Tesla EV buyers: dealers overpricing, and the piecemeal charging networks until some (more) big $ are spent to make them real and reliable. Ford Mustang Mach E Needs a Rethink | Tesla Motors Club

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Recharge Industries, which is owned by New York fund Scale Facilitation Partners, has entered an agreement to buy Britishvolt’s business and assets…

Winning the bid to buy Britishvolt out of administration, Recharge Industries conceded they had paid a premium over the other bidders, but said that was indicative of their confidence in a project that would bring together Australian minerals, US battery know-how and a promising UK site.

DB2

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