World EV Competition is Ramping up

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.msn.com/en-us/money/companies/tesla-rival-byd-set-to-seize-electric-vehicle-crown-chinas-li-auto-tops-50000/ar-AA1mdift

BYD surpassed Tesla in all-electric vehicles, with Li Auto and XPeng reporting record deliveries yet again in December. Nio also topped guidance

The deliveries data comes as the China EV price war continues to intensify.

BYD sold a record 341,043 EVs in December, pushing its 2023 sales to 3,012,906, topping its full-year target of 3 million EVs, including plug-in hybrids. That was up 45% vs. a year earlier

https://www.msn.com/en-us/money/markets/chinese-electric-vehicle-makers-have-the-edge-in-global-markets-despite-policy-roadblocks-from-the-eu-and-us/ar-AA1lPlt2
Chinese battery electric vehicle (BEV) manufacturers have become increasingly competitive in the global market despite policy roadblocks from the EU and US, as the country’s car makers shift focus to exports at a time of slowing domestic sales in the world’s second largest economy.

Exports remained strong in the third quarter of this year, when Chinese brands sold over 130,000 BEVs abroad, a fourfold increase compared to the same quarter in 2022, data from market research firm Counterpoint showed.

Chinese electric carmaker BYD has now caught up with market leader Tesla, accounting for 17 per cent of the global passenger BEV unit sales in the third quarter, up from a 13 per cent market share a year earlier. Counterpoint expects BYD to surpass Tesla in the fourth quarter to become the world’s bestselling BEV brand.

“The influx of low-cost BEVs from China has been adversely affecting Europe’s domestic carmakers,” said Jeff Fieldhack, research director at Counterpoint. “This underlines the growing competitiveness in the BEV market, which is expected to intensify further.

Low-cost BEV are a key factor moving forward in EV war.

BYD has seized the crown for the time being from Tesla. That may not stand.

We should follow some smaller Chinese EV makers NIO ranked #5 & Xpeng ranked #7 in China. You can see they have not been standing and are still expanding. They have not yet reached profitability after 9 years in business. But they are on track miming Tesla expansion.

Tough times ahead for EV market. The low hanging fruit has been picked. Cost cutting & innovation will determine which corporation succeeds for heads toward the dust bin.

NIO delivered 18,012 vehicles in December 2023, increasing by 13.9% year-over-year

NIO delivered 50,045 vehicles in the three months ended December 2023, increasing by 25.0% year-over-year

NIO delivered 160,038 vehicles in 2023 in total, increasing by 30.7% year-over-year

Cumulative deliveries of NIO vehicles reached 449,594 as of December 31, 2023*

Deliveries in December 2023 reached a new record of 20,115 units, a 78% increase year-over-year

60,158 units delivered in Q4 2023, a 171% increase year-over-year

141,601 units delivered for the full year of 2023, a 17% increase year-over-year

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F and GM have deep pockets over the next 1.5 years both will rush into this market.

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I guess all the production cuts, delayed products, dealer buyouts and factory construction delays are just meant to fool the competition and the customers?

Mike

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Nah, I just think it’s the inevitable result of the gold rush. Seen it a hundred times, from when on-line companies were starting every 12 minutes (and were crushed by AOL) to muscle cars (started by the Mustang) to mommy vans and econo boxes and all manner of other products as have been invented over the past 50 years. Heck, how many “personal computer” manufacturers were there at one point? 25? 50? 100?

Tesla had a great thing going (still does) when it was the only one on the block making EVs, and demonstrating that it was a viable, even desirable market segment. It took a while, but even the old-line car guys realized that they’d better be able to have something in that area in case it turned out to be really huge instead of just “pretty cool.”

Unfortunately they all seem to have discovered it at the same time, and they all came rushing to market within a 12-24 month window and are in the process of shaking out, also a time honored tradition in the market. Who remembers Acer, Compaq, HP, Lenovo, Apple, Dell, Epson, Dynabook, Orange, Hitachi, IBM, Panasonic, RCA, Samsung, Sony, Vaio, and a hundred others? I’m not saying this market will play out exactly the same way, just that the overall dynamic is nothing new. Some will retreat. Some will hang in and hope the next model will revive their fortunes. Some will collapse entirely. A few will prosper.

I believe Tesla has put in place many of the waypoints needed for success: production methodology, charging network, brand, product - but then I also remember IBM was the biggest baddest PC maker on the planet, and it doesn’t exist anymore in that arena. There’s lots more to come, surely. The race is just starting, really. Fascinating story to be told.

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I came across a piece on youtube the other day, talking about Chinese brand cars, primarily ICE models, in Russia. As western automakers have withdrawn from Russia, Chinese companies have filled that vacuum. With a significant presence on Russian roads now, the Chinese models are found wanting in durability. The piece claimed, though I did not find backup that verified the claim, that Chinese scrappage schemes have created a domestic industry that designs for a five year service life.

It will be interesting to see how the Chinese models, of any sort, fare against the better EU and Asian brands, in western Europe.

Steve

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There’s been no gold rush. All there’s been so far is whining and crying and delaying from the major auto companies. At least a decade of it, depending on when you count from. There’s been essentially no progress and no serious attempt from them to produce a competitive EV.

Meanwhile, at this point, everybody knows that ICE vehicles have no market remaining a decade from now, and probably not even five years from now.

Current management is just angling to retire before the most disastrous fallout becomes apparent.

No, they’re still clueless. It’s just performative BS hoping for government bailouts. Instead, Tesla is the only company that will benefit much from all the government incentives (because they’re actually building battery factories and EVs here in America). Pretty much Tesla and a few Chinese companies are the only ones who have a chance at this point.

Tesla EV technology is so far ahead that the major car companies can’t even hope to catch up. And ICE is effectively dead in the medium term. So what’s left?

-IGU-

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I wasn’t making a comment about the many EV startups, I was specifically replying to this:

With all the delays and cutbacks in production and factories how can they (F and GM) use their deep pockets to suddenly rush into the market in the next 1.5 years?

Mike

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Wonderful news, it’s proof that the EV disruptive technology has Crossed the Chasm! It’s time to buy your favorite EV company stock!

  1. TSLA
  2. RIVN (maybe)

The Captain

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The chart would argue otherwise:

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IMG_04402035×856 192 KB

As happens at the start of every technological change. Remember IBM eschewing the PC until others lept into the space. Remember Bill Gates remarking that 640k was plenty enough memory for anyone. Remember Henry Ford offering his cars in any color so long as it was black.

A curious analysis given that Tesla is no longer the largest EV manufacturer in the world.

And, I can say as politely as I can, this is delusional. Hybrids will be around for decades, probably, especially in a country as vast as the US. They will be less important in smaller countries with less distance between geographic point such as Japan or Norway, but they will be an important segment (possibly the most important segment ) ten years from now.

Given that there are no bailouts on the horizon, and that no one is asking for them, nor even mentioning them, this is an odd prediction. To this point the largest beneficiary of government monies has been … Tesla.
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Ho ho ho. Another analysis which is hopelessly out of date. They are catching up. Some, at least according to market sales, have already caught up. Meanwhile Tesla automobiles are looking rather long in the tooth, they have a ridiculous pickup entry which does everything but fulfill why people buy a pickup, and the market is swirling. I suspect they’ll come out of it OK, but the dominance they enjoyed a few years ago is likely in the past.

I am quite sure ICE, in the form of hybrids, will be around for decades to come. Tesla sales, while stunning, are still but 15% of VW, 25% of Ford, just 10% of Toyota. There is a lot of gas left in the tank, to include an apt metaphor, even in this time of rapid change.

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Adoption is “S” shaped and the top of the “S” is around 80% to 85% market penetration. Lot’s of growth ahead for those who know how to make profitable EVs. That seems to exclude many ICE incumbents.

The Captain

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It is kind of ridiculous, in the sense that it looks way different than other vehicles in its segment, but I’m not sure what you are referring to exactly by “why people buy a pickup [truck]”? Research has shown that fewer than 20% of pickup buyers use it for hauling stuff, and 50+% use it as a typical vehicle, to move themselves, and sometimes others, from place to place just like any other passenger vehicle. Apparently, they just like being bigger and riding higher than other vehicles on the road.

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I’m almost surprised that it is ‘only’ 50+%. If you spend any amount of time on the road, you may notice how many pickups are out there and how many of them almost always have empty beds.

Pete

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It could be one of the few ways to still be macho in America without going to jail.

The Captain

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It depends where you are located. If you are in an urban or suburban area, almost all those trucks are general personal transportation vehicles. Other than a few small scale businesses. Most businesses find that the F-150 class is a little too small for serious work and but the F-250 or F-350 class instead. But some small entrepreneurs (like a pest control guy I know) make do with the smaller class of truck due to upfront cost. For now at least. If you are out in rural areas, farms, etc, trucks are mostly used as trucks. And when not working, also as personal transportation vehicles if they don’t own a second vehicle for that purpose. If I had to guess, in urban/suburban areas, trucks are 90+% personal transportation, and in rural areas 75+% work vehicles.

One interesting statistic is that women, yes women, are buying pickup trucks more and more often!!!

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CNW has been collecting data on pickup truck sales for several decades, breaking down the sales into five major categories: appearance, contractor, fleet, RV tow and farm/ranch.

The most dramatic change in these categories comes when examining the percentages from 2001, when the appearance segment reached its highest numbers, to the present. Through much of the early 2000s, at a time when full-size pickup sales were quite high, there were many consumers who seemed to buy pickups for “nonfunctional” reasons. Those numbers fell into single digits by the end of the decade and are still below 6 percent for the last six months.

The contractor category, however, started at more than 50 percent in 1985 and is just now getting back to a stronger position. Typically the largest percentage of the five groups listed, the construction industry looks like it’s ready to get back to work with the help of new pickups on job sites.


As I am not a pickup owner, nor ever have desired one, I have to rely on those who know about that market. Here is one that’s particularly searing, but not the only one I have read. Most of the reviews are about style (love it or hate it) but few seem to weigh in on “real world use.”

Those sail panels are my real gripe. This thing has Gen-I Ridgeline syndrome. The sail panels are impossible to reach over, so getting anything in or out of the bed means climbing in the back and walking up to the front—and forget about stepping on the tire and climbing over. Whether tools or toys, that's a massive pain in the azz. Tesla says the sail panels are a key part of the truck's strength, but other unibody trucks both past and present have gotten along fine without them, casting doubt on that rationale.

Those panels also means there will be far fewer accessories for work or play because you can’t mount them to the bed rails. Outfitters are no doubt thinking about accessories for the Cybertruck, but a lot of them are low-volume companies that aren’t going to spend big on prototyping and developing parts until there are enough Cybertrucks sold to make a solid business case.

You can pretty much forget about the commercial market, though, and that’s a bad idea. A huge portion of truck sales are to fleets and working professionals like contractors, plumbers, welders, and more. Not being able to mount lumber racks to the bed rails is bad enough, but making the bed an integral part of the body means it can’t be removed and replaced with boxes, a flatbed, or other equipment.


Don’t get me wrong, I’m sure Tesla will sell a bunch of these, but it seems unlikely to “take over the market” if its basic functionality as a pickup truck doesn’t fulfill the primary objective of most pick-up truck owners. My only experience with them is through contractors (fail), exposure in campgrounds who use them to haul 5th wheels (fail), and a couple of friends who bought them for the rare but occasional trips to Home Depot to pick up lumber. (win). As the writer says, this vehicle seems to be designed as a pickup truck by people who don’t drive pickup trucks.

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You misunderstood the analogy. The vast majority of miners never made money in the gold rush. The analogy is that even if companies know there is money to be made, many will fail. Just like the gold miners.

If that weren’t quite obvious enough, we all know that the personal computer has revolutionized the workplace and our personal lives. Even though many people clearly saw it coming, most companies never made money. To make it even more clear, @Goofyhoofy made a whole list of computer companies that went out of business even though they understood where the market was going. That’s the gold rush analogy. Many try, few succeed.

So if what you are saying is true, and you are the CEO of a legacy car company, then you need to pivot to EVs quickly, or else will ahead of you will dig up all the gold, right?

And in fact, all of the legacy manufacturers have pivoted to EVs. They did.
Jumping in just like the 49ers did. That is the gold rush analogy.

So if everyone is pivoting to EVs, it logically follows that many of them won’t be successful—just like the gold miners. And in indeed, many of them are having trouble at the moment. Which one would logically expect.

You are in about 95% agreement with @Goofyhoofy’s main point. I’ve noticed you tend to get very emotional when someone mentions EVs and lash out at the slightest perceived offense to Tesla, even when it doesn’t exist.

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Perhaps it’s worth noting that in Europe so far this year (through November), not only are ICE vehicles currently still about 75% of the market, sales of ICE vehicles grew from last year from 2022 by about 13%. And Europe is much further along the EV adoption curve than markets like the U.S. or Japan. Plenty of demand for ICE cars over there, and likely to remain strong given phase-outs of EV credits in the largest auto markets.

So, no - not everybody knows that ICE vehicles will have no market remaining a decade from now, because it’s simply not true.

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Their revenues and assets are much larger than the startups. The two of them have some experience in EV at this point. Particularly Ford does. Both have engineers now who know the pitfalls and the successes.

Musk has pushed people away. Ford and GM have a market waiting for them.

Of course, using resources better is crucial.

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Unfortunately for GM & Ford their cost to manufacturer EVs is much higher than Tesla and many Chinese EV manufacturers. I do not see how they can be successful in the EV market space.
I was watching Bloomberg before I had to go visit a friend. Of course, the “big” story is that BYD is now #1. Though I’m not sure they can maintain that lead.
They made 2 interesting comments.
1)BYD is out Teslaing Tesla. By that they meant BYD is making more parts, electronics, chips, batteries, etc than Tesla. And that may be true. In any case their cost of producing an EV is low like Tesla’s.
2)BYD is making cheaper EVs for the China market space. The average price of their EV sold is 1/2 of Tesla. Thus likely their profit margin is less than Tesla. However BYD is producing more luxury models attempting to tap that portion of the market.
Tesla was the opposite. Making luxury models for the wealthy & then professional class in the USA and then the EU. They then made the model 3 to attract those down the economic ladder and soon will produce an even less expensive model.
BYD is looking at Mexico locations for a factory and has plans for a factory in Szeged, Hungary.
Tesla has the jump on BYD in foreign factories. And Tesla is dominating EV sales in the EU. But Chinese EVs makers are already exporting to the EU. I expect that will increase as China has cost-effective production capability. Which is why Tesla has several factories there. And Tesla will NOT go quietly into the night.
Methinks in 2 years the EV purchaser will have many more choices from which to choose.

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Why is that the case?

DB2