I mean - maybe? It seems like it’s a US thing. Legacies have had no trouble beating Tesla back in Europe. Tesla used to have a 20% share in EV’s, but that’s collapsed to about 8%. Not having dealers doesn’t seem to have been much of a factor there.
As mentioned before, not having dealers is an advantage when there’s little available inventory and few choices for consumers. They don’t do anything for you. But that changes in a market where there’s dozens of alternatives in each vehicle class sitting for immediate purchase in dealer lots. When consumers are spoiled for choice, dealers regain a useful function. That’s where Europe is now, and Tesla’s only 5th or 6th in the market, with less than half the sales of market leader VW (20% market share in Europe).
The US still isn’t like that. EV’s are still less than 6% of the market, and Tesla’s probably more than half of that. So in the US, Tesla and Rivian and Lucid probably still have some benefit from not having dealers. But if the US changes from being an EV backwater, then that will likely change as well.
C’mon albaby1 that’s not like you. Here are sales for 2022
The Tesla Model Y is far ahead, while the Tesla Model 3 remains the best of the rest. It’s an open question who will be #3 in 2022 - the Fiat 500 electric or Volkswagen ID.4.
Tesla has the top two selling cars in Europe despite price tags north of $50K. The 3rd place car sells for 27K and has a max 200 mile range. It targets a different demographic. Last I heard, VW BEVs are still not profitable so the VW ID.4 ranking is achieved by selling at a loss. It sells for a bit less than $40K and still can’t outsell a Tesla.
No doubt legacy automakers DOMINATE Tesla in BEV sales of <$40K, but is that really meaningful given the Tesla product line?
So what? Tesla has the top two models. They are Tesla’s only models (Edit- save de minimis production of the S and X), and constitute only 8% of European EV sales. And the reason that they only constitute 8% of European EV sales is because legacy automakers have had no trouble at all making and selling EV’s. The reason that Tesla’s market share has collapsed from 20% to 8% is because legacy automakers have collectively been growing their EV production faster than Tesla has.
That’s why legacy makers have 92% of the market share in Europe. That’s why they collectively have beaten back Tesla and slashed their formerly high market share. Because they’re not limited to only a small number of models.
The way that legacy automakers have done so is by applying the same strategy they use in ICE production - lots of different models in lots of different vehicle segments, with different design features and styles and other characteristics. Because consumers have varied needs and tastes in cars, there’s only so much volume a single make and model can attract.
So, Tesla sold about 200K EV’s in Europe last year. VW sold about 440K EV’s in Europe last year. Which is the market leader? Tesla, because all their EV’s were in only two models - or VW, which sold more EV’s but spread them around the various VW, Skoda, and Audi plates? VW sold more sedans than Tesla - but divided their sedans between the ID.3 and the ID.4 so they could appeal to a broader range of customers. Does that make them behind Tesla, or ahead of Tesla (which has trouble bringing new models to market quickly)?
Yes, if you’re arguing that legacy automakers are not going to be able to make EV’s. VW grew from about 80K EV’s to 800K EV’s (nearly 600K BEV’s) in the same time than Tesla grew from 80K BEV’s to 500K EV’s - and while Tesla was unprofitable, too. Plus, VW’s overall profit margins haven’t fallen, even as EV’s have risen to about 10% of all VW sales - which is completely inconsistent with the theory that replacing ICE sales with EV sales will wreak havoc on incumbents’ margins.
[EDIT] Even your point about <$40K cars isn’t accurate. The VW group sells three SUV’s models in the top 20 in Europe: the Skoda Enyaq, the Audi Q4 etron, and the regular Audi etron. They all sell for well more than $50K in Europe. Collectively, VW sold more of those $50K+ SUV’s (109K units) than Tesla did of the Model Y (106K).
Maybe? I generally think the Tesla bull case is built on the idea that at least one of their moonshot businesses (AI/self-driving, robots, or electric power storage/batteries) will be a world-changer.
I think it’s just false that Tesla is going to leave the legacy automakers as smoldering ruins in their wake, because legacy makers can’t make EV’s. I think that’s the result of too myopically looking at the US market, rather than Tesla’s impressive but not dominant results in Europe and China).
Now then - I also think Tesla’s margins are partially an artifact of market conditions that are starting to go away forever: a period where there were few alternatives for consumers, allowing them to charge premium prices and avoid the costs of selling cars that are inescapable in an actually competitive environment (ie. dealer expenses and advertising). High margins aren’t only attributable to building the cars more cheaply - they’re also the result of being able to sell the cars at a higher price.
But I think that’s a slightly different point.
Did you read your own link? It says very clearly that Tesla is number three in BEV sales by brand in Europe. And it is worse than that, by group (Audi and Volkswagen are different brands but the same group) Tesla is number seven.
Why is Ford taking the actions against dealers they have announced?
I’m not saying that dealers are going to go away. Far from it. Just that the poor experience at US dealers is a headwind for the legacy car makers. I have no idea what it is like to buy a car in other countries.
Because the Lightning is currently in that anomalous situation I described above. There is virtually no available inventory for the Lightning. There’s a wait list a mile long. There is virtually no available inventory for alternative EV’s in the same vehicle class (the others are also on wait lists or are Cybertruck). The dealership doesn’t add any value in that limited circumstance - and because the supply is so constrained, it puts them in a position to extract a lot of value that is well beyond a “normal” dealer fee, which ticks off the customers.
But that’s a very unusual situation for dealers to be in. You’ll note that this is not a problem across Ford’s entire vehicle line-up - just the EV’s, and generally just the Lightning.
As for the “poor experience” - people may dislike it, but they don’t dislike it enough for there to be any competitive pressure to change. Now and again someone will assay a “no haggle” approach (perhaps most famously the GM Saturn). But it never seems to be a game changer. A minor irritation for consumers, but nothing that’s big enough to forego the advantages of price discovery and capturing consumer surplus that haggling provides.
So it probably isn’t a “headwind” for legacy car makers - just a minor annoyance that consumers complain about but which they readily overlook.
That is almost certainly untrue. Tesla dropping to 8% in Q2 2022 is due to this thing called Covid that shut down manufacturing in China. At that time most of Tesla’s European cars were made in China. I don’t have the numbers but I’m guessing that Q4 2022 will show Tesla back up to 20+% European BEV market share. At least one report said that in Q4 2022, Tesla Europe market share of all auto sales reached an historic high of >2%.
Nonsense. Tesla’s market share of EV’s in Europe collapsed long before Q2 2022. It had already fallen to 7% in 2021. It actually went up a tick for 2022 (through November) with the rollout of the Y.
A far cry indeed from earlier years, where Tesla had 20% or more of the EV market.
So no - it’s not a short-term blip caused by Chinese shutdowns in Q2 of 2022. Rather, it’s that most European automakers now have a healthy roster of EV options that are generally available for purchase.
Now - Tesla will likely get some of that market share back with the ramp up of Berlin. Having a European factory will make it much, much easier for Tesla to service that market. But regardless, the overwhelming majority - by a lot - of EV’s that are sold in Europe will be sold by legacy manufacturers.
I am not - all of my posts have referred to EV’s (except where I’m specifically differentiating them), but I’m not “equating them.” They are different from each other - but both are also different from ICE vehicles, and so reflect the ability and willingness of legacy makers to shift from the profitable ICE models they’ve made in the past towards the (arguably) more difficult EV units going forward.
But if you want to look at BEV’s alone, then Tesla’s loss of market share is still precipitous. The 20% market share I was referring to was Tesla’s peak of EV’s in 2019, when it had 20% of the European EV market. But if we look only at BEV’s, they were even more dominant back then - they had about 30% of the pure BEV market:
…which has now fallen to the mid-teens. No, not because of Q2 2022 - all throughout 2020 and 2021, their market share has hovered in the mid-teens.
The reason is obvious from your chart. If we look at 2021, we find that Tesla sold about 168K BEV’s in Europe. Which is pretty good. But the legacy manufacturers sold 1,051K BEV’s in Europe - six times as many BEV’s as Tesla. How? By offering a really large number of different models, with different styles and characteristics, in a number of vehicle classes.
Even just looking at BEV’s, Tesla has had its market share in Europe basically cut in half in the last few years as all the legacy automakers have (finally) brought their BEV offerings to market. European customers are spoiled for choice in BEV’s. So while Tesla’s two models (the 3 and Y) are the two largest individual ones, they’re only a small part of the market.
So just to make sure I understand, during all this time you were talking about a decline in market share that occurred three years ago?
In the three years since 2019, legacy automakers have spent billions of dollars on EVs and have introduced a ton of new BEV and PHEV models in Europe. VW has also been pricing its BEVs at levels below the cost of making them. Yet Tesla’s European BEV market share has remained steady during this period. In fact the quarter (Q1 2022) prior to the Shanghai lockdown was at a two year high of 18%.
Looks more like legacy automakers are having problems competing with Tesla.
Is that really your point? Isn’t it kind of obvious that if Tesla has 20% of the European BEV market, 80% of BEVs are made by others?
EVs appear to be entering an exponential stage. When demand outstrips production it is virtually impossible to maintain marketshare. The question is whether production and sales are growing quickly. It is for Tesla.
In any case, here is a TTM graph of Tesla market share up to Q4 2022. Check out the red line. If one cares about market share, then China is more of a concern than Europe.
Or not - legacy automakers are, collectively, growing just as fast as Tesla. That’s the point I’ve been making. Legacy automakers are doing really, really well at shifting to EV’s. And BEV’s, if that’s what you care about. They’re not being held back by their ICE businesses. They’re growing just as fast as the super-fast innovator pure-EV upstart.
In 2020, non-Tesla BEV’s in Europe were 650K. In 2021, non-Tesla BEV’s in Europe were 1,051K. That’s 62% growth. That’s not indicative of a moribund set of incumbents that are unwilling or unable to convert to BEV’s. It’s indicative of everyone jumping into the pool with both feet.
Yes, that’s my point. Again, this thread is (for the most part) talking about whether legacy automakers have the ability to switch from making ICE’s to making EV’s. The fact that the legacy automakers in Europe are producing six times as many BEV’s as Tesla in that market is a pretty solid data point that there’s no real obstacle to them doing so. It’s also a decent data point that these cars aren’t quite as unprofitable as people make out - even though most of the European legacy automakers have switched non-trivial portions of the product mix from ICE to EV/BEV/PHEV, their margins are still pretty steady.
Not market share overall - market share in EV’s. Europe is in the midst of significant conversion from ICE to EV’s. The market share of EV’s is skyrocketing (up to about 25% now). Tesla’s overall market share of the car market will thus increase very quickly as well. That’s great for Tesla!
But the legacy automakers are also converting from ICE to EV’s. Which means that even though Tesla’s market share of all autos is rising (again, great job Tesla!), it also means that the legacy automakers are manufacturing massive amounts of EVs.
None of this is “Tesla is bad.” It’s “Most Legacy Auto is doing well at converting.” The US is an anomaly - the US legacy auto companies haven’t done much, which is why Tesla has such huge market share. Everywhere else? Legacy auto has been doing just fine at making the switch.
European automakers have no choice. The EU has banned ICE sales by 2035. Otherwise they would be just like the Japanese and American car makers. And the fact that these highly motivated European legacy car makers with all their infrastructure and experience still cannot take market share from Tesla is pretty revealing.
Speaking of revealing. In 2022 Tesla sales in Germany increased 76% from 2021, while VW sales decline 1.8%. It now sells as many EVs in Germany as Audi and BMW combined. It looks like Tesla has decided to focus on Germany with its new Berlin gigafactory, and so far it seems to be blowing away the competition.
I don’t think so. Over the past couple of years of the pandemic and supply chain issues car makers made fewer cars and raised prices. For example, the VW group sold 6% fewer cars in 2021 than in 2020 but had higher revenue. Profit margins should have increased.
But here’s the thing. Prior to EVs, Tesla and BYD were nonfactors in the US and European markets. That almost certainly won’t be the case in the electric future. It wouldn’t surprise me if BYD and Tesla together eventually account for a third of global auto sales. What’s left will go to the legacy companies. That is a much smaller pie to divide. Seems likely that a lot of the legacy companies will either be much smaller or disappear.
It seems that it would be fairly simple to service cars without a dealership network - if you don’t have that many cars out in the field. Once you get to a point where there are millions, it seems unlikely that this will be a viable model. Repair guys, zipping about in cars driving to customer’s houses will be vastly expensive. You’ll have $40-$50/hr guys spending 2/3 of their time on the road instead of fixing cars.
Even if EVs - and Tesla’s in particular - require much less service they still require some, and that’s one of the things dealers are good at.
Jumping continents, the #2 country exporter of cars is about to be … China. Ahead of the US, ahead of Korea, about to overtake Germany, behind only Japan:
Most of those are EVs. And here’s an interesting quote from the article:
Local carmakers have found the electric platform relatively easy to master compared with the complex internal combustion engine. “The switch to battery means the motor is no longer a differentiator”. Technologically it’s created a level playing field.
You mean like plumbers, cable guys, lawn services and the Geek Squad? They all seem to make it work.
It’s been said before, the differentiators with EVs are the battery and the software. Depending on how things turn out, it may also be the master computer chip. Legacy car makers have no exceptional expertise in any of these. That’s why Legacies don’t have a tech advantage over Tesla despite their history of car making.
Case in point may be what GM is going through with batteries. They committed to one type of battery tech but now realize that Tesla had the better idea.
Because there is no alternative. And yeah, it’s expensive to have trained and highly paid people spend most of their time in a car. (I am old enough to remember when the doctor used to come to our house; that changed in my youth and we trudged to his centralized office because it was more efficient for him.)
That may be true. And it is likely that more mistakes may be made, there may even be discoveries that are better than what Tesla has. You now have global auto makers in Germany, China, Japan, and the US all aiming at the same spot. Unless Tesla was extraordinarily lucky and got everything perfect on the first try, I expect improvements (and failures) to come from anywhere and everywhere.
There is no alternative there. They have to make the remote work, work. Besides, I think the auto mechanic really likes having the lift, a large tool assortment, the parts department a short walk away, … Cars are a bit more complicated than my toilet, after all. You’ve put up a straw man here.
