Agree with most of your list. Sad but many potential loosers still do not realise the EV transition speed is only accelerating. My hope is some minor ones will go bankrupt very soon(as banks withdraw) which becomes a last wake-up call to go drastic in trashing their Ice plans. JPN is in deep shit
@LafeiAr You said in a previous comment that you live in Indonesia. Here you said you live in China. Monthly registration data shows that plenty of BEVs are selling in China. As a matter of fact that number keeps growing every year. There are many reasons why many people would prefer an ICEV over a BEV there is no need to lie about it. If you have to lie in an attempt to prove that ICEVs are better, that means that you don't have a strong and valid argument against BEVs. And the truth is that there are many valid arguments against BEVs.
I am 55 years old. The exact same was said over 30 years ago.. I hope Xpeng will make it. Their updated P7 is a good car with a good price, and the G6 could be at least as good. My impression is that one gets a lot for the money with Xpeng.
Sam..saw your piece on "invisible" solar panels. Sounds like a good idea. Hope it comes here. The ones that are out today are just plain unsightly. Using panels in the materials your roof is made from is a great idea!
Sam, with all due respect, you can improve your preparations for this video. You talk about debt for all major groups but you forget to dig into Stellantis financial health and the last years of over performing the rest of the auto industry in terms of profits Their break even level is at 60% their production at present. They have zero debt and have the best margins after TSLA. Even if the CEO makes negative statements about EVs, their EV sales are decent and improving across most its brands in Europe. They should also speed their EV sales in the US as well. Stellantis is also partially owned by the French government and too big to fail in the US for the US government not to mention in Italy. Concerning Renault I don't agree with your statement as they are partially owned by the French they follow the same rational you apply to VW. The question for most of the groups, is more if they won't shrink or be absorbed by other groups.
I'm not seeing zero debt. "Stellantis net long-term debt for the twelve months ending June 30, 2022 was $34.610B, a 1828.45% decline year-over-year. Stellantis annual net long-term debt for 2022 was $-6.827B, a 240.54% decline from 2021." Then they further shrank long-term debt: "Stellantis long term debt for the quarter ending June 30, 2022 was $19.460B, a 116.51% increase year-over-year. Stellantis long term debt for 2022 was $20.513B, a 23.36% decline from 2021. Stellantis long term debt for 2021 was $26.766B, a 37.54% increase from 2020." (Stellantis Net Long-Term Debt 2014-2022 | STLA - Macrotrends). MarketWatch reports long-term debt at the end of 2022 as $19.5 billion, $7.7 billion of it short-term due. No other short-term debt noted, but there must be rotating lines of credit to fund current operations, unless that's the $7.7 B - which is expected for any industrial firm of its scale. So Stellantis paid down debt by over $15 billion as the world lurched into higher interest rates. That's a massive pay-down of debt which reflects incredibly well on the firm's management. I hadn't realized how completely they'd bucked the trend of all other auto makers, who are saddled with vast amounts of unsustainable debt now while interest rates are going up, orders are plummeting & they all claim they're going to invest many tens of billions in new plant & equipment, new R&D - all to build EVs & (they hope) scale production, before they go bust. At its worst Stellantis' debt was nothing like the debt still being carried by VW, Ford, GM & Toyota. But it isn't zero.
Think it would be wise for Xpeng to look at Brazil. 1.5 Million annual vehicle sales, only about 2K of which are BEVs, & Tesla has not arrived. If there's 20% demand for well done BEVs in Brazil at this point, that's 300K per year. Even if BYD is moving in too, at 300K demand, 50K units sold would be only 15-20% market share, with others getting the rest. I think the P7, G6, and G9 could do at least that well, and that would be about a 50% boost to Xpeng's current sales run rate.
Hmm, maybe the P5 would be the car to try to bring to Brazil. Sam basically says it's a far better car than a Camry at effectively Camry prices. P5 has done little to nothing in China after Xpeng invested in making it happen... seems like trying to find a market that may give it new life makes sense. fwiw, I did some quick Googling on car prices in Brazil. Apparently they are quite high... some reasons put forward would just push up Xpeng's prices as well (ie, high taxes), some would not (ie, high labor cost of production in Brazil and status consciousness having large sway, ie, desire for more expensive vehicles). Just some quick reading, not claiming to have any real grip on the pricing realities there.
If you are not a member of Mercosul, the import duty on cars is 100% in Brasil! Having lived in Brasil for a long time, i would disagree about jumping full tilt into the Brasilian market. Firstly the consumers are poor, and secondly, you have to build a very simple, repairable product that can survive the massive potholes that Brasilian roads have. You need a customized product for Brasil, with high ground clearance, and Fiat and VW have been doing this for decades. A better strategy is to build in Mexico which has a free trade agreement with Brasil and other countries. That is the Neutral Zone for car manufacture, which is why so many firms have factories in Mexico. Ford and other firms have recently quit Brasil. It's a tough market. Brasil has huge distances to cover, and near zero charging infrastructure. EV's will take decades to become common in Brasil. However delivery trucks, would be a great market as there are a ton of small trucks in Brasil and they don't go very far each day. A cheap EV delivery van would be a smash hit in Brasil.
Brazil is an interesting case. Traditionally the #2 market for firms like GM. The difference is (again, prior to 2000) the vast majority of Brazilian car owners could afford to buy multiple cars. So the overall market as percentage of the public was smaller, but they bought more cars, more frequently. The reason, of course, is massive inequality. That's something the US is headed towards: it's becoming much more like Brazil over time. Complete with the impoverishment of the poor, decreasing living standards for the middle class & massive increase in wealth for a dwindling wealthy few. And complete with increasing political graft, corruption & ultimately, both economic & civil instability. Meanwhile, catering to the wealthy works fine. Xpeng is familiar with that kind of market in China. The big difference though is that the smaller market (number of potential purchasers) probably dooms roll-out of charging networks in Brazil. That'll stall EV sales for some time. Concentration of wealth means sales in a more geographically-bound area to fewer people; widespread charging networks require ubiquity in sales both by population & geography. So private firms won't pay for it. Tesla (eventually) might, but in limited areas (areas around the cities of Sao Paulo, Rio, Brazilia - that's about it). Brazil's government won't pay for a massive build-out of charging infrastructure. And existing government graft depends on Brazil's (nationalized) petrochemical industry - not on its electricity utilities or auto makers. Brazil committed to huge amounts of ethanol in its fuel, & the politically-connected sugar industry is hooked on producing that ethanol for fuel: government won't give it up. China's CCP is committed to monopolizing EVs & batteries worldwide, the way they've done so with low-grade iron, lithium & rare earths, wind & solar manufacturing... so the CCP has been willing to bankroll &/or support the rise of many EV firms (though that's beginning to fail). Brazil won't do that. Brazil - and other Latin American companies - will build & buy the last ethanol-gas internal combustion engine vehicles on the planet. They continued making the VW Bug long after it had died everywhere else, & VW remains dependent on similar models in Brazil. The latest replacement (the Gol) looks like a cross between a Bug & a Golf.
@@jamesthompson7282 it's a thankless task, being a manufacturer in Brazil. In the USA when you buy a screw for resale, making a car, you don't pay sales tax. Brazil, you have to pay sales tax at every step of production and Track it all very carefully. If your product has lots of parts in it, it's really expensive to keep track of it. its a nutty, archaic aspect of brasil's tax system. brasil govt owns some of the electric companies though, like electrobras using plants for.l fuel is Stupid beyond belief, but americans are doing the ethanol boondoggle also
When talking about car makers debt, it is important to specify what type of debt. If they sell vehicles on credit to individuals through a finance arm, the debt may be safely covered by repayments.
@@TroySavary if ice cars are being legislated out of existence, which they are between 2030-2035(this will accelerate again here soon. And losing market share of 3-5% or MORE globally per year now to evs ever since 2017, which they are. Plus mostly all legacy oems make is new ice cars, which most of them currently do(merc&BMW along with Volvo are all solidly 10-20% ev atm. Why is it so hard for even simpletons like you to put all the pieces together and come up with the simple answer? 😀 Nevermind considering the sum total debt of the existing ice oems, their junk credit and bond ratings making raising capital expensive. Decades old outmoded factories not ready to build modern connected evs in. Lack of tie ups for ev cell supply, inverters, motors chips etc. Their current outdated ev architecture is easily 3-7+year's behind all the ground up evs of tesla, nio, byd, xpeng etc. They suffer from the extremely entitled legacy entrenched gashole mindsets of their workers and c level execs. See Jim farley latest candid interview about how team Edison who made the mach e, lightning&e transit got treated within fords own workplace halls for more. I mean it's all plain as day to see. And you think dismissing us as just tesla fans is a mark of intelligence. 🤔 I've owned almost a half a million dollars worth of Ford's in my life. The next one if I ever buy another is gonna be a ground up ev with the nacs plug or not at all. Who knows if Ford can survive and build one worthy of my $.
You are right about who will fail but there will be probably dozens of new ones and one may make todays equivalent of the Volkswagen Beetle. History is all about the improbable making a big difference
Nice summary, we are entering a period of natural selection, an evolutionary process. A reality check, it is going to be a blood Bath as you said. Laughed out loud though at 10:15…..😂….there speaks the wisdom of Sam.
Good topic Great content as a potential electric van buyer my wife’s the driver However I found the audio content difficult to follow I am a blind subscriber so perhaps there were on screen lists I didn’t appreciate Principally I’m interested in the LDV MIFa nine MPV or perhaps a Peugeot Electric van which company do you think more likely to be around in 10 to 20 years when I may need parts batteries etc Any observations on LDV quality? Unfortunately neither company is going to be using lithium iron phosphate batteries or offer vehicle to load Shane Cheers
I think there needs to be a caveat in the ‘10 left’ statement….that it’s 10 mass market automakers. There will always be low volume niche manufacturers making a living.
Sorry, but I don't believe there will be 10 auto makers surviving this transition in 10 years, there will be less probably. These gas powered auto makers will all be stranded assets with massive debt sinking them. Keep up the good work Sam
Thanks for doing this! I have long wondered who would survive and it is nice to have your opinion. Nobody else I know of put out such a comprehensive list, they just concentrate on one or two OEMs.
Few remarks: Japans debt is internal, not external, meaning they’re in a better position then meets the eye. It’s debt is owned to… itself. Second remark: JLR is going completely electric, isn’t that a good starting position? Yes, maybe late to the game but freed of the burden of fossil cars. I think it will be more or less like a start over for them but one that might very well succeed.
Why would Europeans pay €45k for a car that competes with well known brands at the same price when they are 25% the price in their own country. Lots of european brands tried to break US. Its not easy break established markets. Japan did it somewhat but did so by manufacturing in US and price nearly being the same in both markets.
Agreed, far too much legacy debt for GM and Ford. In my opinion, Chinese companies will fair better than he is expecting. China is largest ev market followed by Europe.
I assume Lucid joins Rivian in bankruptcy, yes? BTW, if some automaker (or one of their invested battery partners) should somehow come up with a significant technology battery breakthrough that is patent defensible, all bets are off. Considering how every automaker to my knowledge has vested interests in small tech companies, it's like rolling the dice.
BEIJING/SHANGHAI (Reuters) -Chinese electric vehicle giant BYD Co. (BYDDF) posted a fivefold jump in its first-quarter profit on Thursday as the company consolidated its leadership in the domestic market. Net profit for the first three months of the year was 4.13 billion yuan ($596.56 million), up 410.9% from 808.41 million yuan a year earlier, on revenue up 79.8% at 120.17 billion yuan, the company said in a stock market filing. The Shenzhen-based company, whose investors include Warren Buffett's Berkshire Hathaway (BRK/A), outsold Volkswagen-branded cars in the first quarter of this year in China, according to a Reuters analysis of data from the China Association of Automobile Manufacturers. Buoyed by its Dynasty and Ocean series of plug-in hybrids and pure electric cars, BYD sold 552,076 new energy vehicles in the first quarter, a surge of 92.81% year-on-year, according to the company. The company sold more than 1.86 million vehicles in 2022, mostly in China. BYD has joined many other Chinese brands in a price war started by Tesla, with the offering of discounts for its Song Plus and Seal EVs in March. The price cuts have eaten into automakers' earnings, with Tesla reporting a 24% plunge in first-quarter net income. Last week, BYD unveiled its Seagull electric hatchback at the Shanghai autoshow, stunning visitors with a price from just 78,000 yuan - around half the level of the cheapest new energy vehicles available elsewhere. ($1 = 6.9230 Chinese yuan renminbi) (Reporting by Qiaoyi Li, Zhang Yan and Brenda GohEditing by David Goodman and Sharon Singleton)
The thing is that Tesla cut prices everywhere more so in the US by upto 13000usd so that if any car company exports cars out of China, they'll have to sell at the same price as in China to remain competitive. I mean take a look at Norway, Denmark and other Scandinavian countries that are going electric they are dominant and yet they are cutting prices further.
@@sneid3936 The thing is, we don't know what the subsidies are in those Scandinavian countries, what the charging infrastructure is, or the penalties for driving an ICE vehicle, etc. I'm sure those governments are subsidizing those that buy EVs. And, really how many annual miles do those folks drive? It's nothing like here in the United States.
Respectfully disagree with Toyota being under any existential threat. Please note that 43+% of Japan's national debt is owned by its central bank. That means left hand owing money to right hand. Interest burden on that debt is extremely low, and BOJ will keep buying bonds to keep it that way. Printing money has little impact on inflation due to extremely high savings rate (corporations, individuals); As a whole Japan is a huge *net creditor*. It can bail outs its whole automotive industry many times over. That does not mean it will! But Toyota will 100% make it. Remember their experience making hybrid cars. Their strategy has been garbage but they have the tools.
Last time I looked Toyota was the biggest car maker and the most profitable, I think EV is the wrong strategy Hydrogen makes better long term sense and far greener, just my opinion
@@martinaston1715 I say that it's more likely that we get a battery weiging less then a full tank of gas made of benign materials then that we get a hydrogen system with half the energy efficiancy of an electric system.
Tesla problem outside China will be the other way around. The will likely get hit by antitrust law in Europe and North America. I will say, North America will happen sooner. If you look at the fast charge infrastructure. You will find out Tesla EV will be the only viable choice in that market.
1000 per month in Australia Israel Thailand India and several hundreds in Brazil Costa Rica. Just entered Mexico Spain Jordan. Dolphin only about to be released globally .. Then seagull
It's all very well legacy companies being bailed out by their governments, but if they don't produce products that customers want they will just go bust again, even quicker next time.
For US company? No, they will get feed on whichever corpse of foreign compamy struck down by DC. It eill be any of the European company and some smaller player from China. XPeng, Nio are prime candidate.
I don't disagree with you but I suspect that mergers and acquisitions will take place allowing certain brands to continue. For instance Jeep remains a strong brand in the US and most buyers believe that they are buying an American product. Most people believe that Mini, Jaguar and Land Rover are British (yes I know that they have different owners). I also expect that some acquisitions will doom the buyers. You are right that there will be a financial blood bath. In no way would I invest in the Auto industry but it will be interesting to follow.
Can you picture Kodak going under in 1995? Can you imagine nokia will no longer relevant in consumer cell phone in 2002? Can you imagine RIM/blackberry will close out their hardware division in 2010?
Going to be interesting to see how this all plays out. ICE still has a wide majority share of the world's auto market, but how are they going to deal with the obvious EV revolution train? It's arriving fast & furious (no relation to the movies.. 😉).
Irrelevant, Tesla model means EOL once OEM support is discounted. You may still get some salvage part for noncritical components, but you will have very limit support from 3rd party aftermarket supplier. Tesla designed are highly integrated and it is very difficult to rebuild those components without factory support. This stament is more true to newer models.
@@林振华-t4v Pointless, Tesla has enough vehicles on the road that there will be third party aftermarkets suppliers lined up long after even if were to say Tesla company is gone.
I’m in a different view point here. The fate of the car companies are related to the fate of their nation states. The world will bifurcate to regional markets with global south under BRICS+ as one and the west. I am here to say all legacy brands will survive in one form or the other as BRICS+ car brands will be banned for sale in the west and western brands will exit the BRICS+ area. The CEO is speaking about the domestic car brands, if that is the case I agree. There will be a lot of mergers and consolidation while some will belly up. In the end there will be 11 Chinese car brands standing strong. BYD, FAW, Geely, SAIC, GAC, Chery, Li Auto Group (yup they will merge with someone), JAC (Nio will be sold to them), Huawei (they will be a car conglomerate), Tencent and Alibaba. These companies and their car brands will be the players in BRICS + area serving the 85% of global population. The key here is that these countries are de-dollarizing therefore there are no dollars to buy other brands. Other car brands in this area will include Iran, Middle East and Russian brands. The legacy companies will concentrate on 15% world market and with US being its main consumer market. But with the financial crisis and Europe facing an energy crisis, well hard to say what happens to these car brands.
I believe the car industry is going to return to "COACH BUILDERS" here in the US there was a time when Example: Body by Fisher was on the rocker panel of GM built cars. Coach builders will due the purpose built body and drive train will be the stuff you don't see! And supplied by whomever builds a good power unit.
Some RUclipsrs intentionally make mistakes to get more comments and drive up the algorithms. I'm not sure which is worse, intentionally making this mistake or unintentionally doing it.
SAIC is not doing well, even their EV sales are not taking off. It seems a bit lazy to assume all Chinese car conglomerates will weather the storm when SAIC has lots of sales from GM and VW partnerships that are cratering with nothing to offset those sales. At the same time you seem to ignore the strong position NIO has in the upper market and how they do have a unique product. I agree they are in a fragile and difficult situation right now but the building blocks for future succes are there. You seem to think all the major players will surve this transition to EV with only two new major players entering (Tesla and BYD). This seems a but too much coasting on current trajectories. I'm seeing at least one of the chinese conglomerates going into restructuring and probably take over and SAIC is the most likely candidate, in spite of their huge sales today. If you are bearish on Toyota which is Japans pride i dont see how SAIC is in a better position.
In fact this is just one group together with also Genesis and shares in Rimac-Bugatti also. I do not see Kia making anything wrong or Hyundai or Genesis doing better. Not because I am a Tesla fanboy too but because the Koreans have understood DESIGN and TECHNOLOGY as to be USP in a melting away market. Most problems have legacy that are not flexible and burning money in power games, outdated structures and a lot of useless old factories they never will or can invest to.
Think your wrong about xpeng. People Are waiting for the new updated P7and the new P9 think this wil hammer all in that segment. Think there sales wil go up.
Well, your list makes sense. I think Renault will survive though. The next war will be on the field of affordability. They are just having fun now with all these 60K$, 70K$ and 80K$ toys (at that price point, that's what they are: toys for the wealthy). Life and death will be the game when the wealthy has been fed and the car makers will have to feed the regular folks. I do remember when the CD (music) first came out. 25$ for my first David Bowie CD. The same LP, in vinyl format, was 13$. I remember thinking: prices of CDs will go down slow and steady, no problem. Well, the did go down, VERY slowly, while the vinyls went up. They met at 16$. And that was it. Vinyls died, CDs became the norm. The SAME thing will happen with EVs. Their price will lower ever so slowly, until they meet the price of ICE cars. That will be around 40K$ I think, in 5 years I think. Is that a scenario that brings affordability to the masses? Can't tell, but I think it won't be better than that.
Xpeng positions itself the same as Tesla while the company is still too young. People love technology, but not many people are willing to premium price for additional tech other than the actual needs for transportation.
I'm glad to see BMW in that failure list. I owned two of their broke down cars I purchased new. I missed work because my BMW's kept breaking down. They are always in the shop. BMW can go to hell for selling unreliable cars.
this happened when the model t changed the i c e industry ,hundreds of smaller auto manufacturers disappeared leaving mostly the oem s we see today ,history most probably will repeat as it tends to do , great video as usual so refreshing to see your take on the e v revolution kee up the awesome work
😂 only people will lose their job, nothing will happen to any real car "maker" as they will stay as shell company and just sell the same car with little flavour added to it and lots of marketing.... Skoda, seat from vw are dead just shells and can be changed at will by vw😅
Building a car is moving from being a hardware challenge to being a hardware/software challenge. Most companies are taking their eye off the software challenge. This is like the cell phone market changing to the smartphone market. Tesla has a huge lead on the software side. I just don't see how anyone can catch up. Google helped the smartphone companies by creating Android. I just don't see that happening.
That is because car required a more emerging knowledge of bith world. In fact, it is still possible to have a dedicated solution for two separate sphere. You can have mechanical+ simple software control on driving sphere (which will be mission critical) and add on the smart software on top of it. The legacy auto makers include BYD, HongQi, SAIC etc are going this route. Tesla, Xpeng, NIO are taking one suit contols all.
And what happens if china-us relations deteriorate and China cars are in an embargo? Or some superior battery developed by a start-up? What if hydrogen ICE works out Most predictions simply extend today's reality into the future There are innumerable variables which can upset your prediction. Especially when things are changing so fast
The embargoed will be the only applicable case to work in your case. The battery case may not stand. The problem for start up battery break through will be a very paradoxical situation. First, a start up will struggle to ramp up. By the time they deployed to market, CATL, LG, BYD will quickly catch up. If the native country (e.g. US, Korea or China) place tech export control. Oh, fine, what ever the market the battery allow to sell will not have enough scale to drive down the price to phaee out the existing battery solutions. So at the end, the tech will likely everyone have it then start up go under or their is not enough market, the startup go under. Hydrogen.. well, it wont take off in foreseeable future. It is the future, make no mistake. But may not be something we can live to see
I think what’s misunderstood here is that not only are the car manufacturers cutting costs but so are suppliers. Once a proper EV supply chain is established across this new industry, things will not appear so dire. Maybe I’m wrong but that’s my opinion.
They will survive not because the manage well in transition. They will survive because they are too big to fail. They will get the might of federal reserve. If you know what I means. The Fed will keep Ford, GM and Chrysler alive till DC to clear all the obstacle for them. Another WW maybe. 😂
I don't know why XPENG simply fail to 'pull their collective fingers out' & get on with building cars with less emphasis on 'self driving' & Lidar, etc... Stop trying to sell customers things they do not want. Just build good CARS! Get away from Lidar & cars like helicopters. These things take their eyes off the main game.
Like tesla, amd NIO, Xpeng is believing autodriving solution is the real disruptors and where the gold mine is. There is lot of money to be made here. If im a marketring company, real estate developer. I will definitely want Tesla, Xpeng and Nio to sell me the pie chart showing what will attract people to go to certain place. Do you really think Google making money out of searching service and android? No, it is each click and each tap we made that help them make money
He Xiaopeng is correct. Not a new observation though. He's quite realistic claiming the auto market will shrink to 10 suppliers. There would be fewer, but nations will insist on supporting their own problem children. - In Germany VW will survive, & probably Mercedes or BMW. But not all three: the German government won't pay to bail out everyone, so one or two will survive & the rest will be merged in. It comes down to which firms are best connected politically. - In Japan Toyota is already absorbing Subaru; it's unlikely that 4-6 automakers will survive. Mitsubishi, Suzuki are definitely toast; probably Nissan too. Honda might actually fare better than Toyota. - Hyundai is probably well-enough connected in Korea to receive necessary bailouts. - China will definitely support 3-5, but not dozens. - America's Ford is worse off financially than GM at present but is much better run; my money's on Ford to survive (though not literally of course: I wouldn't invest a dime in Ford stock). GM OTOH: GM is toast. It's better-connected politically than Ford but I suspect the US taxpayer is fed up with paying to bail out GM. They might do it one more time. In fact, they're doing it now with the various subsidy acts: Build Back Better, Build America Buy America, Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL)... the list goes on & on, but all told the US Government has announced & enacted Acts providing over $1 Trillion USD in subsidies, grants, loans, tax incentives... all to reverse 50 years of offshoring US manufacturing to (mostly) China. Tesla claims it expects to own no more than 35% of the world auto market. That might be pessimistic. At present it looks more likely its market share will be closer to double that. The shakeout isn't abnormal: it's par for the course in a new disrupted industry. - Number of US buggy manufacturers that survived disruption & made the transition to auto manufacturing: 0. That's zero; nadda; zilch; bupkas. NONE. - Number of telegraph operators that made the transition to phones: none. - Number of typewriter companies that successfully made the transition to computer manufacturing: none. - Number of cell phone manufacturers that survived transition to smartphones: none. We could go on; the story doesn't change much in any disrupted industry. So what's weird this time is the number of previous giants who (just maybe) survive on the strength of repeated government bailouts. Absent that, they'd all be toast. They're all carrying vast amounts of debt before considering the equally vast amounts they'll require to launch EV production - & survive the learning curve as they scale. VW, for instance, doesn't make enough profit to pay the interest on its current debt load - & it says it'll add another $150-200 billion in debt to build EV & battery plants. How? THAT is why I think Mr. Xiaopeng is being generous. The majority of surviving auto firms in 10 years will be new entrants to the market. Starting with Tesla, obviously (& maybe including XPeng - Mr. Xiaopeng's company - but that one's a long shot). It's very unclear that we've seen ANY of the other new entrants that will survive. Lucid, NIO, Nikola, Rivian, Arrival: they're all walking dead, zombies. None has yet figured out how to manufacture at a profit (NIO comes closest, but still loses 3K/car minimum) & (other than NIO) none has figured out how to scale. Odds are, they won't. . . Last thoughts: neither consumers nor investors have yet realized this problem will snowball. There's a feedback loop: 1. As people switch to EV, the logistics of gasoline distribution networks will fall apart. You don't need 50% of the market to switch before the economics of gas distribution fail. Gas industry majors have already discovered this: they're selling & closing gas stations across the continent. Very soon "range anxiety" will describe drivers of legacy vehicles realizing they have to drive 30 min. or more to fill the tank. 2. The ONLY charging network with ubiquity will be Tesla's. Other cars will get some access to some of it; other than that you'll be limited to charging slowly where you can find a station, or limited to charging pretty much only at home. 3. Consumers will soon realize none of the current EV offerings - OTHER than Tesla - are going to stay on the market. New models are all doomed to be replaced as their makers either fold, or realize the designs are crap, & build better (maybe). Do you want to own an orphan car with no one to service it, no parts available? Do you want to gamble that the model you purchase will be supported, if the manufacturer somehow stays afloat? Most makers will be merged out of existence or go bust. But all makers' new EV models are doomed in this year or next. Buy knowing you won't find support. Unless you purchase a Tesla. As gas vehicle drivers suffer range anxiety they'll increasingly buy EVs. As purchasers realize they can't fuel up anything painlessly, anywhere, except in a Tesla, Tesla market share will climb. As consumers realize other EV makers & models won't last, they'll gravitate towards Tesla. So far, it's shaping up to be very nearly a one-company market in the long term.
I like your reasoning: 2 problems though, both to do with batteries. BYD make batteries but Tesla don't really have total control of their battery supply (tho they appear to be working on it). So I see a 2-company market in the long term. The other problem is that success in EVs is hugely dependent on the batteries, which are still in a relatively early stage of development, and if someone else (not BYD or CATL) comes up with a genuine breakthrough, it could again disrupt the industry. (I'm thinking LG, who might come up with something to give Hyundai a real boost) Your comment on the negative feedback loop for the ICE is often overlooked or shrugged off, when in fact it is far more serious than you realise: I did an article for the 'Independent Australia' online newspaper explaining that ICE s involve critical parts, such as valves, which are always made by outside suppliers, who are totally dependent on high volumes for their relatively low cost. As ICEs reduce in number, demand for valves drops and the makers will charge much more or go out of business. Either way, the ICE enters its death spiral. And speaking of valves; they require a lot of nickel, and some are provided with a hard seat surface, usually cobalt alloys. So people who talk of EVs requiring lots of exotic materials are ignorant, or are deliberately defaming EVs at the expense of ICE.
@@davidinkster1296 I think tesla will get hit by antitrust in the west. It is funny Tesla will least likely get hit in China. The Chinese spec. Tesla are actually using standard GB plug. The supercharge network is big enough but not the biggest one, the national grid and another one have bigger present. And the car they sell, are selling every well. But the amount of market share in EV still keep them far away from monopoly. So, all this curses appears to become blessing in the long run.
@@davidinkster1296 Thanks David. I wasn't aware of the issue with engine parts, but it doesn't surprise me. I think there are a lot of such issues we'll discover as the transition progresses. If the transition were going the other way we'd likely find ways around such problems: trust engineers to find a way. But the direction & speed of the transition means there'll be little incentive for hard work to overcome bottlenecks that develop in ICE manufacturing, and existing suppliers will own their little monopolies (winning ever more profit) as production drops. That valve manufacturer will do well. Exxon is counting on this. We'll always need oil (one third of world production is a feedstock for chemical, pharma, lubricants, fertilizer & food manufacturing...) but the two thirds that Tesla has targeted (transportation & utility energy production) will dwindle fast. Meanwhile Exxon counts on owning an ever-bigger slice of the petro pie as other firms exit the field (or are acquired by Exxon) & will squeeze larger profits from it as it shrinks. They're doing that already. Business loves an oligopoly. Tesla is removing cobalt from batteries. There'll be more innovation like this in batteries. Perhaps in metallurgy too, but cobalt won't ever be removed from the industrial supply chain. We could try to cut off the Congo from markets but China buys it & won't stop because of something as trivial as child slave labor (a western boycott is necessary but will just make that supply cheaper for China to purchase; we're seeing that effect now as India buys embargoed Russian oil for cheap). What we can do in the West is get better educated (thank you for educating me) & refuse to purchase tainted products. That'll require vigilance, constant regulatory effort & a lot of public input & pressure. Also expansion of refining in the West: China has a near-monopoly on many metals refining. I'll watch for your posts.
@@林振华-t4v Anti-trust action against Tesla? Anything is possible, & businesses that previously dominated fields then get disrupted have been known to try to weaponize law. But it's hard to see that working in this case. 1. Tesla isn't acquiring other firms to dominate a field; 2. Tesla isn't using predatory pricing: there's no dumping going on. The Chinese use that to kill foreign competition, dumping product below cost until competitors go broke to take over an industry. Tesla is not selling below cost - in fact it's making record profits in auto manufacturing even after recent repeated price cuts. It isn't illegal or an unfair practice to manufacture at lower cost than a rival. If they can't keep up, too bad for them. 3. Tesla has bent over backwards in attempts to goad ICE firms to catch up, start making EVs in volume. It's thrown open the patent bin, encouraging rivals to use its patents for free. It's told battery suppliers they're free to sell its 4680 batteries to competitors once it has satisfied Tesla's needs. No other firm IN THE HISTORY OF BUSINESS has ever been so helpful to competitors. Tesla doesn't want to dominate the field: it wants to move transportation & energy production from fossil fuel use ASAP, worldwide.
Probably some major OEMs will be propped up by various governments. Companies may have to be built back up from almost nothing. But they won't be allowed to go without lots of effort. I hope so in a way. German and Japanese manufacturers could make compelling ev products once they get pointed in the right direction. We could use the competition.
i think both germany and japan might go bankrupt trying to help aal their companies that need to be saved. they wont be able to save all of them, will they be able to save any?
@@scottmcshannon6821Both countries will try hard, but there will be a limit to the help the governments might give. Cant see these Mercedes and BMW going down with the brand they have though.
@@fernandopimentel5463 Those two (Mercedes/BMW) will likely merge. Question is whether the merged group stays afloat or merges into VW. VW has better political support, but financially is already a basket case. Mercedes/BMW would be financially better off, probably require less government support. Absent massive support (literally HUNDREDS of billions of dollars) VW is toast. It's total profits don't currently cover the interest on outstanding debt. And it says it'll add up to $200 billion new debt to build batteries & EVs. Only way that happens is if the German state (federal AND Lower Saxony) cough up enough money to bail it out. So far, it appears VW is playing chicken, committing to bankruptcy & expecting a bailout.
@@scottmcshannon6821 Probably none should. Economically, its a losing game. But politically, they'll likely squander taxpayer billions - hundreds of billions - to support a couple firms in each country. The alternative is unpalatable. 1) Firms like VW, Toyota, GM, Hyundai have deep political support & influence. They'll use it. And 2) Disruption will hammer the entire economy; politicians will attempt to minimize that. It's understandable. The Automobile Manufacturing industry - not just the major brands, but the enormous parts industry supporting each of them - is the biggest driver in manufacturing overall in Japan, the US, Germany & Korea. So it it's understandable why they'll try to rescue & maintain that industry in all countries. It's a failed mission. - Tesla has demonstrated that vertical integration is necessary, which eliminates much fo the secondary parts-supply market. - Tesla has demanded that cars become reliable. The best maintenance is NO maintenance. So Tesla builds to last. The drivetrain in the Model 3 (its lowest-cost vehicle at present) uses much the same parts throughout, & the same motor, as its Semi. The Semi is intended to pull 100,000 lbs & last AT LEAST 1 million miles. The Model 3 has the same drivetrain & is built to last 1 million miles, easy. Largely maintenance-free, especially for the first 100,000 mi. That means the dealership model is DEAD. It means planned obsolescence - the guiding principle for all existing automakers - is DEAD. It means buying cars as a fashion product is DEAD. At some point Tesla has to consider polymer panels instead of sheet metal: the bodies of existing Teslas will rot out long before their mechanical parts or their batteries. Cybertruck will use aluminum: that's the other alternative. - That means the overall auto market WILL SHRINK as a percentage of the total human population: fewer people will purchase cars. They'll overwhelmingly opt for an autopilot taxi service. Those that DO purchase a car will buy many fewer over their lifetime. Tesla intends to shrink the market (it'll grow worldwide though as more people in more countries become able to purchase one). - VERY few car companies will be able to dance to that tune. None of them will commit to it at present: everything in Tesla's operating strategy & design philosophy is anathema to EVERY legacy auto manufacturer. DO NOT count on GM to unwind its outsourcing strategy: it's committed to running a finance-led business, a brand, not a manufacturing company. DO NOT commit to GM or Ford renouncing planned obsolescence, selling cars as fashion items. Look hard at the ads for all major auto firms: they're ALL selling a feeling, a brand, a fashion statement. Not a vehicle. They were all doomed as soon as Tesla proved it could oppose that approach & make it work. I don't see how they're not all doomed. Will government bailouts be enough to save firms committed to discredited strategies? What am I missing? ('cause I'm sure there's lots).
Nope, the horses are not dying when the stray dogs want. There will be a lot of "fusions" and "arrangements" but the Western world is aware and is not giving away this crucial industry. Stellantis CEO already talks about taxes for Chinese cars, and the Chinese cars already in Europe are not particularly cheap. This, in correlation with the world's domination preparation/takeover using BRICS, and the support for Russia's invasion... things are much more sensitive and dangerous than you think.
They can embargoed the Chinese car all they want. But the Chinese will find a way for their industry. BRICS or whatever. The ev evolution will continue steam ahead. The later you face competition, the worst off you are. The current European policy is ok, let the competition in. And force the local to adopt and evolve. North American on the hand. Once they struck tesla with Antitrust, the auto market will be eventually fxxk.
There will continue to be ICE vehicles manufactured for situations where EVs are not competitive with ICE vehicles. This will be an ever shrinking market, however, it will not be non existent as some people currently assume will be the case.
As a long-term Tesla owner, I have to disagree on the extent of the bankruptcies. I suspect that sales penetration of BEVs will taper off at 50% by 2030. Toyota knows this and that’s why they are digging their heels in. They know what they are good at, and they intend to keep that slice of the pie. Not everyone wants an EV, even with all of their huge advantages and cost of ownership. I see it every day.
It will most likely get so somewhere about 60% globally (with higher % in more developed markets) before starting to taper off. In time it will be close to 90 though. Still, I don't think it will only be 9-10 companies, even if we disregards niche builders like Ferrari and the likes
I don’t think you’re right there….EV’s are so much better than ICE vehicles in so many ways and, if they’re significantly cheaper to buy and run, which they are becoming, who will want ICE cars? GM’s second biggest market is China where new pollution regulations will prevent ICE cars from being sold…so GM’s sales of 500,000 cars in China are going to vanish FAST with nothing to replace them! I love my Porsche Cayenne V8 but even it can get crushed in a sprint by a Tesla saloon … EV adoption is going exponential and ICE vehicle sales are doing the same but in the opposite direction….it’s inevitable
Just like film made a comeback after digital cameras gained traction? Technology disruptions and phase change transitions take no prisoners, my friend. I'm quite certain there will be no ICE industry left by 2030, probably even before than.
There's a feedback loop that'll drive faster switch to EVs than the market currently credits: 1. As people switch to EV, the logistics of gasoline distribution networks will fall apart. You don't need even 30% of the market to switch before the economics of gas distribution fail. I've had conversations with the people managing distribution for companies like Exxon & Sunoco in Canada: they've been worried about this for well over a decade. Gas industry majors are selling & closing gas stations across the continent. They're getting out of the business of retailing gas (they'll still own the refineries so profits won't suffer for some time). Very soon "range anxiety" will describe drivers of legacy vehicles realizing they have to drive 30 min. or more to fill the tank. 2. Consumers will soon realize none of the current EV offerings - OTHER than Tesla - are going to stay on the market. New models are all doomed to be replaced as their makers either fold, or realize the designs are crap, & build better (maybe). Do you want to own an orphan car with no one to service it, no parts available? Do you want to gamble that the model you purchase will be supported, if the manufacturer somehow stays afloat? Most makers will be merged out of existence or go bust. But all makers' new EV models are doomed in this year or next. Buy knowing you won't find support. Unless you purchase a Tesla. Meanwhile if you're going to purchase an ICE vehicle you have to ask yourself whether you're confident the company that made it - and the dealer that would support it - will be around in five years. Increasingly that'll be in doubt. Wanna buy an orphan? No - didn't think so. As gas vehicle drivers suffer range anxiety they'll increasingly buy EVs. As ICE manufacturers hit the wall, consumers will become risk-averse & flee their products. As consumers realize other EV makers & models won't last, they'll gravitate towards Tesla. The switch to EVs is being mandated by law in the EU by 2035. Ditto for Canada & a part of the US (California, to start) but that'll grow to include the rest of the US. Doesn't matter: the market WILL switch long before 2035. Long before 2030. Consumers will switch as fast as EV manufacturers can scale up to provide EVs.
It’s 90+% in Norway and everyone else is following their trajectory. There are always people who think that a new technology won’t displace an old one. I don’t see many flip phones around and yet most people thought smartphones wouldn’t take over the market when they first came out.
Fiat, RAM & Peugeot are all part of Stellantis, I disagree with you on Stellantis, they are safe for the same reason VW are safe, the French Government is (was? well at least they had a significant share in PSA, I expect that translated to a smaller but still significant share Stellantis) a major shareholder. I expect that if the the French Government needs to provide a bail out it will involve a change of company leadership.
30% of jobs in the US are transport,. If all transport goes Electric all those jobs will be gone, and gone to China. Only Huge corporations will control transport. Can we talk about all the pollution produced in making Rare Earth magnets?
Maybe, or more likely their R&D office in US get confiscated by FBI and then end up become Oracle or Nvidia's asset. Same goes to Nio. So I guess each one of them will get one.
Nissan , Honda , Toyota , Suzuki , BMW , Jaguar. These are the ones going down in the next 10 years. At this rate ICE Vehicles wont survive , the price of EVs is getting closer to the ICE ones.
Sam should have added Porsche and Ferrari to the list of survivors. Those firms have status and can continue indefinitely at admittedly small (but steadily growing) volumes. I lose money on each sale, but i make it up in volume, is the mantra of way too many companies. Mr. Peng is not accurate; Countries will protect their homegrown companies forever, and so the Japanese market will be 90% domestic product, and the Thai market will be controlled, etc. So you will have to manufacture locally. That means VW, and Toyota, and Honda will be around for a long time. The question is whether Ford and GM can survive without foreign sales. Both imploding outside North America.
Will unfortunately not help them scale to volume that makes them profitable. They can only reach break even point and eventually profits by scaling to big volumes, but untill then will need to burn through billions of cash, while hoping their demand increases incrementally and is sustained. I wish them the best and hope they pull through.
Amazon will also not "sustain" or inject cash into Rivian if it does not make economic sense, they would then rather cut their losses, pull out and move on to another manufacturer that has already scaled with electric vans at that point and can supply them with cheaper options.
Rivian is spending $220,000 per unit while selling it for an average of $81,000 and taking a loss of (-$139,000) per truck. (Feb 13, 2023). The company lost $6.8 billion last year (2022). It reported in Dec. 2022 that it had $11.56 cash on hand, but the burn rate has increased so that'll support survival only through the current year, perhaps part of 2024. The question is how much money Amazon is prepared to pour into Rivian. Increasingly it looks like a sinkhole. Last year Amazon grudgingly coughed up $2.3 billion more money to keep the firm afloat. Bezos won't fall for the sunk-cost fallacy, won't keep throwing good money after bad. In fact, the cheap way out for Amazon would be for it to let Rivian go bankrupt, then buy the assets for a song. The problem with that is it would require Amazon to do what Rivian has thus-far been unable to accomplish: figure out how to build EVs AND scale, profitably. And since no one else (anywhere on the planet) has been able to do this, Bezos probably won't try. Rivian makes a good product. Not better than Tesla's, but (so far) brilliantly in two model categories Tesla has neglected: pickup trucks and vans. So Rivian lacks competition. Read that again: Rivian lacks competition. Even without competition and with a guaranteed buyer for everything it can produce, it still can't figure out how to build profitably. It loses $140K on every vehicle it builds. As soon as Tesla or someone else offers a good van alternative, Amazon will cease support & Rivian is doomed. Tesla will likely introduce a van 2024/25; it's teasing it now.
Yes alot will go out of business but car manufacturers need too cut down on models and stick with 4 or 5 models, i.e., Tesla model and produce them in scale too be profitable. The old gm Ford model will not fly, I think there in trouble more then newer companies. Gm and Ford seem like they don't have a clue in making evs that are profitable and desirable on mass scale. I love what vw, polestar, and rivian are doing, I'm betting big on them!!
MG did not make money while they are selling ICE. But looking at bigger picture. Its parent group can suck up the lose because except MG 4. Other MG model are bage engineering
Not sure about Ford, to much debt , by far the biggest recall bill of any manufacturer and behind in ev race, and ice legacy to deal with once full ev World
Do you know which car company I want to see succeed, it’s the one that builds an EV that I can afford!
Tesla.
That would be Tesla// they are trying hardest to reduce costs and scale
@@remoteportal well, BYD seems to be doing a better job.
@@remoteportal
Not really. BYD sodium batteries means everything EVs cheaper. Plus cheaper cars like seagull for the masses
@@ciybersal9833 That's the point. They that cater to the market always win
Agree with most of your list.
Sad but many potential loosers still do not realise the EV transition speed is only accelerating.
My hope is some minor ones will go bankrupt very soon(as banks withdraw) which becomes a last wake-up call to go drastic in trashing their Ice plans.
JPN is in deep shit
@LafeiAr You live in China in 2002?
There are hundreds of PHEV to choose from in China.
@LafeiAr You said in a previous comment that you live in Indonesia. Here you said you live in China.
Monthly registration data shows that plenty of BEVs are selling in China. As a matter of fact that number keeps growing every year.
There are many reasons why many people would prefer an ICEV over a BEV there is no need to lie about it. If you have to lie in an attempt to prove that ICEVs are better, that means that you don't have a strong and valid argument against BEVs. And the truth is that there are many valid arguments against BEVs.
I am 55 years old. The exact same was said over 30 years ago..
I hope Xpeng will make it. Their updated P7 is a good car with a good price, and the G6 could be at least as good. My impression is that one gets a lot for the money with Xpeng.
You mentioned Fiat and Jeep separately to Stellantis, which they're actually part of.
And Ram.
They will break away from the group before Stellamtis go under. You shall see.
@@netgnostic1627 And Peugeot
Sam..saw your piece on "invisible" solar panels. Sounds like a good idea. Hope it comes here. The ones that are out today are just plain unsightly. Using panels in the materials your roof is made from is a great idea!
Solarcity has had that for over 6 years ago. Too expensive...
The CEO might have meant international companies. There could still be several regional players as well that don’t export their vehicles.
Sam, with all due respect, you can improve your preparations for this video. You talk about debt for all major groups but you forget to dig into Stellantis financial health and the last years of over performing the rest of the auto industry in terms of profits Their break even level is at 60% their production at present. They have zero debt and have the best margins after TSLA. Even if the CEO makes negative statements about EVs, their EV sales are decent and improving across most its brands in Europe. They should also speed their EV sales in the US as well. Stellantis is also partially owned by the French government and too big to fail in the US for the US government not to mention in Italy. Concerning Renault I don't agree with your statement as they are partially owned by the French they follow the same rational you apply to VW. The question for most of the groups, is more if they won't shrink or be absorbed by other groups.
I agree Stellantis may survive. One piece of good news is Chrysler has announced they will produce only EVs by 2028 (maybe the end of the year?).
I'm not seeing zero debt. "Stellantis net long-term debt for the twelve months ending June 30, 2022 was $34.610B, a 1828.45% decline year-over-year. Stellantis annual net long-term debt for 2022 was $-6.827B, a 240.54% decline from 2021." Then they further shrank long-term debt: "Stellantis long term debt for the quarter ending June 30, 2022 was $19.460B, a 116.51% increase year-over-year. Stellantis long term debt for 2022 was $20.513B, a 23.36% decline from 2021. Stellantis long term debt for 2021 was $26.766B, a 37.54% increase from 2020." (Stellantis Net Long-Term Debt 2014-2022 | STLA - Macrotrends).
MarketWatch reports long-term debt at the end of 2022 as $19.5 billion, $7.7 billion of it short-term due. No other short-term debt noted, but there must be rotating lines of credit to fund current operations, unless that's the $7.7 B - which is expected for any industrial firm of its scale. So Stellantis paid down debt by over $15 billion as the world lurched into higher interest rates.
That's a massive pay-down of debt which reflects incredibly well on the firm's management. I hadn't realized how completely they'd bucked the trend of all other auto makers, who are saddled with vast amounts of unsustainable debt now while interest rates are going up, orders are plummeting & they all claim they're going to invest many tens of billions in new plant & equipment, new R&D - all to build EVs & (they hope) scale production, before they go bust.
At its worst Stellantis' debt was nothing like the debt still being carried by VW, Ford, GM & Toyota. But it isn't zero.
Think it would be wise for Xpeng to look at Brazil. 1.5 Million annual vehicle sales, only about 2K of which are BEVs, & Tesla has not arrived. If there's 20% demand for well done BEVs in Brazil at this point, that's 300K per year. Even if BYD is moving in too, at 300K demand, 50K units sold would be only 15-20% market share, with others getting the rest. I think the P7, G6, and G9 could do at least that well, and that would be about a 50% boost to Xpeng's current sales run rate.
Hmm, maybe the P5 would be the car to try to bring to Brazil. Sam basically says it's a far better car than a Camry at effectively Camry prices. P5 has done little to nothing in China after Xpeng invested in making it happen... seems like trying to find a market that may give it new life makes sense.
fwiw, I did some quick Googling on car prices in Brazil. Apparently they are quite high... some reasons put forward would just push up Xpeng's prices as well (ie, high taxes), some would not (ie, high labor cost of production in Brazil and status consciousness having large sway, ie, desire for more expensive vehicles). Just some quick reading, not claiming to have any real grip on the pricing realities there.
If you are not a member of Mercosul, the import duty on cars is 100% in Brasil!
Having lived in Brasil for a long time, i would disagree about jumping full tilt into the Brasilian market. Firstly the consumers are poor, and secondly, you have to build a very simple, repairable product that can survive the massive potholes that Brasilian roads have. You need a customized product for Brasil, with high ground clearance, and Fiat and VW have been doing this for decades.
A better strategy is to build in Mexico which has a free trade agreement with Brasil and other countries. That is the Neutral Zone for car manufacture, which is why so many firms have factories in Mexico. Ford and other firms have recently quit Brasil. It's a tough market.
Brasil has huge distances to cover, and near zero charging infrastructure. EV's will take decades to become common in Brasil. However delivery trucks, would be a great market as there are a ton of small trucks in Brasil and they don't go very far each day. A cheap EV delivery van would be a smash hit in Brasil.
@@edwarddejong8025 Appreciate the insights Edward! Sounds like somebody will do great with a delivery van in Brasil.
Brazil is an interesting case. Traditionally the #2 market for firms like GM. The difference is (again, prior to 2000) the vast majority of Brazilian car owners could afford to buy multiple cars. So the overall market as percentage of the public was smaller, but they bought more cars, more frequently. The reason, of course, is massive inequality.
That's something the US is headed towards: it's becoming much more like Brazil over time. Complete with the impoverishment of the poor, decreasing living standards for the middle class & massive increase in wealth for a dwindling wealthy few. And complete with increasing political graft, corruption & ultimately, both economic & civil instability.
Meanwhile, catering to the wealthy works fine. Xpeng is familiar with that kind of market in China. The big difference though is that the smaller market (number of potential purchasers) probably dooms roll-out of charging networks in Brazil. That'll stall EV sales for some time. Concentration of wealth means sales in a more geographically-bound area to fewer people; widespread charging networks require ubiquity in sales both by population & geography. So private firms won't pay for it. Tesla (eventually) might, but in limited areas (areas around the cities of Sao Paulo, Rio, Brazilia - that's about it).
Brazil's government won't pay for a massive build-out of charging infrastructure. And existing government graft depends on Brazil's (nationalized) petrochemical industry - not on its electricity utilities or auto makers. Brazil committed to huge amounts of ethanol in its fuel, & the politically-connected sugar industry is hooked on producing that ethanol for fuel: government won't give it up.
China's CCP is committed to monopolizing EVs & batteries worldwide, the way they've done so with low-grade iron, lithium & rare earths, wind & solar manufacturing... so the CCP has been willing to bankroll &/or support the rise of many EV firms (though that's beginning to fail). Brazil won't do that.
Brazil - and other Latin American companies - will build & buy the last ethanol-gas internal combustion engine vehicles on the planet. They continued making the VW Bug long after it had died everywhere else, & VW remains dependent on similar models in Brazil. The latest replacement (the Gol) looks like a cross between a Bug & a Golf.
@@jamesthompson7282 it's a thankless task, being a manufacturer in Brazil. In the USA when you buy a screw for resale, making a car, you don't pay sales tax. Brazil, you have to pay sales tax at every step of production and Track it all very carefully. If your product has lots of parts in it, it's really expensive to keep track of it. its a nutty, archaic aspect of brasil's tax system.
brasil govt owns some of the electric companies though, like electrobras
using plants for.l fuel is Stupid beyond belief, but americans are doing the ethanol boondoggle also
You greatly underestimate NIO. Laughable.
For now it’s too early to count chickens in the spring thinking those you counted will be grown up hens and roosters by fall.
I used to think GWM would survive and even thrive in the EV sector but they left it too late it seems.
They may stick around by taking over smaller players.
I think only BYD and Geely will survive in China. Rest will go bankrupt.
I was having a horrible day and then I saw this video. Thanks Sam more life to you and your family.
When talking about car makers debt, it is important to specify what type of debt. If they sell vehicles on credit to individuals through a finance arm, the debt may be safely covered by repayments.
Is it though? 🤔
Don't expect Tesla fans to understand simple facts.
@@TroySavary if ice cars are being legislated out of existence, which they are between 2030-2035(this will accelerate again here soon.
And losing market share of 3-5% or MORE globally per year now to evs ever since 2017, which they are.
Plus mostly all legacy oems make is new ice cars, which most of them currently do(merc&BMW along with Volvo are all solidly 10-20% ev atm.
Why is it so hard for even simpletons like you to put all the pieces together and come up with the simple answer? 😀
Nevermind considering the sum total debt of the existing ice oems, their junk credit and bond ratings making raising capital expensive.
Decades old outmoded factories not ready to build modern connected evs in. Lack of tie ups for ev cell supply, inverters, motors chips etc.
Their current outdated ev architecture is easily 3-7+year's behind all the ground up evs of tesla, nio, byd, xpeng etc.
They suffer from the extremely entitled legacy entrenched gashole mindsets of their workers and c level execs. See Jim farley latest candid interview about how team Edison who made the mach e, lightning&e transit got treated within fords own workplace halls for more.
I mean it's all plain as day to see. And you think dismissing us as just tesla fans is a mark of intelligence. 🤔
I've owned almost a half a million dollars worth of Ford's in my life. The next one if I ever buy another is gonna be a ground up ev with the nacs plug or not at all. Who knows if Ford can survive and build one worthy of my $.
The cell phone manufacturers analogy is spot on.
as an Estonian I will give you a list of automakers who are in PIG trouble
You are right about who will fail but there will be probably dozens of new ones and one may make todays equivalent of the Volkswagen Beetle. History is all about the improbable making a big difference
Unlikely to have any new car makers. You need scale to compete.
Tesla is an anomaly. China has subsided their car industry into being.
The ease of making an ev will mean there’s probably going to be a cottage industry boom
Nice summary, we are entering a period of natural selection, an evolutionary process. A reality check, it is going to be a blood Bath as you said.
Laughed out loud though at 10:15…..😂….there speaks the wisdom of Sam.
Good topic Great content as a potential electric van buyer my wife’s the driver
However I found the audio content difficult to follow I am a blind subscriber so perhaps there were on screen lists I didn’t appreciate
Principally I’m interested in the LDV MIFa nine MPV or perhaps a Peugeot Electric van which company do you think more likely to be around in 10 to 20 years when I may need parts batteries etc
Any observations on LDV quality?
Unfortunately neither company is going to be using lithium iron phosphate batteries or offer vehicle to load Shane
Cheers
NIO. Let’s go.
I think there needs to be a caveat in the ‘10 left’ statement….that it’s 10 mass market automakers. There will always be low volume niche manufacturers making a living.
Sorry, but I don't believe there will be 10 auto makers surviving this transition in 10 years, there will be less probably. These gas powered auto makers will all be stranded assets with massive debt sinking them. Keep up the good work Sam
Thanks for doing this! I have long wondered who would survive and it is nice to have your opinion. Nobody else I know of put out such a comprehensive list, they just concentrate on one or two OEMs.
Few remarks: Japans debt is internal, not external, meaning they’re in a better position then meets the eye. It’s debt is owned to… itself. Second remark: JLR is going completely electric, isn’t that a good starting position? Yes, maybe late to the game but freed of the burden of fossil cars. I think it will be more or less like a start over for them but one that might very well succeed.
Why would Europeans pay €45k for a car that competes with well known brands at the same price when they are 25% the price in their own country. Lots of european brands tried to break US. Its not easy break established markets. Japan did it somewhat but did so by manufacturing in US and price nearly being the same in both markets.
As Tony Seba says about cars replacing carriages, what happened to the horses?
We ate them.
Did we? We cant eat ICE car that is for sure. Tsk, tsk, what a waste...
How much will it cost to build recharging networks for 8 million cars in Australia
What will the Government TAX with out Fuel tax?
Xpeng is very good quality
Tavares is an outstanding leader. His stance about electric is more political towards internal.
Love the Altman Z score!!
Great Video! Bet the super lux will be fine - Porsche, Ferrari, etc. No?
@Thomas Kievit BUT PORSCHE SALES ARE WAY UP?
@Thomas Kievit lol. Porsche will dominate the premium segment. Easily the best cars and brand in the world.
GM AND FORD WILL LIKELY NOT, NOT, NOT MAKE IT.
Agreed, far too much legacy debt for GM and Ford. In my opinion, Chinese companies will fair better than he is expecting. China is largest ev market followed by Europe.
I assume Lucid joins Rivian in bankruptcy, yes? BTW, if some automaker (or one of their invested battery partners) should somehow come up with a significant technology battery breakthrough that is patent defensible, all bets are off. Considering how every automaker to my knowledge has vested interests in small tech companies, it's like rolling the dice.
BEIJING/SHANGHAI (Reuters) -Chinese electric vehicle giant BYD Co. (BYDDF) posted a fivefold jump in its first-quarter profit on Thursday as the company consolidated its leadership in the domestic market.
Net profit for the first three months of the year was 4.13 billion yuan ($596.56 million), up 410.9% from 808.41 million yuan a year earlier, on revenue up 79.8% at 120.17 billion yuan, the company said in a stock market filing.
The Shenzhen-based company, whose investors include Warren Buffett's Berkshire Hathaway (BRK/A), outsold Volkswagen-branded cars in the first quarter of this year in China, according to a Reuters analysis of data from the China Association of Automobile Manufacturers. Buoyed by its Dynasty and Ocean series of plug-in hybrids and pure electric cars, BYD sold 552,076 new energy vehicles in the first quarter, a surge of 92.81% year-on-year, according to the company. The company sold more than 1.86 million vehicles in 2022, mostly in China. BYD has joined many other Chinese brands in a price war started by Tesla, with the offering of discounts for its Song Plus and Seal EVs in March. The price cuts have eaten into automakers' earnings, with Tesla reporting a 24% plunge in first-quarter net income. Last week, BYD unveiled its Seagull electric hatchback at the Shanghai autoshow, stunning visitors with a price from just 78,000 yuan - around half the level of the cheapest new energy vehicles available elsewhere.
($1 = 6.9230 Chinese yuan renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Brenda GohEditing by David Goodman and Sharon Singleton)
The thing is that Tesla cut prices everywhere more so in the US by upto 13000usd so that if any car company exports cars out of China, they'll have to sell at the same price as in China to remain competitive. I mean take a look at Norway, Denmark and other Scandinavian countries that are going electric they are dominant and yet they are cutting prices further.
@@sneid3936 The thing is, we don't know what the subsidies are in those Scandinavian countries, what the charging infrastructure is, or the penalties for driving an ICE vehicle, etc. I'm sure those governments are subsidizing those that buy EVs. And, really how many annual miles do those folks drive? It's nothing like here in the United States.
BYD gross margin is higher than Tesla now, even with the lower price point and faster growth
Net margin rate is significantly lower for BYD I think I saw.
@@larryevans6739 Sorry: that's incorrect - the statement you've made is completely wrong.
1. BYD gross margin was ~14% in 2022; it's net margin was
Respectfully disagree with Toyota being under any existential threat. Please note that 43+% of Japan's national debt is owned by its central bank. That means left hand owing money to right hand. Interest burden on that debt is extremely low, and BOJ will keep buying bonds to keep it that way. Printing money has little impact on inflation due to extremely high savings rate (corporations, individuals); As a whole Japan is a huge *net creditor*. It can bail outs its whole automotive industry many times over. That does not mean it will! But Toyota will 100% make it. Remember their experience making hybrid cars. Their strategy has been garbage but they have the tools.
Toyota will be like Sharp Corp.
Sharp Corp. went bankrupt, bought by Taiwan.
Toyota will go bankrupt, then bought by China
Japan has no money. All debt. Japan couldn't save JOLED.
I heard some Japanese TV manufacturers already had been sold to Chinese companies. Anybody know?
Last time I looked Toyota was the biggest car maker and the most profitable, I think EV is the wrong strategy Hydrogen makes better long term sense and far greener, just my opinion
@@martinaston1715 I say that it's more likely that we get a battery weiging less then a full tank of gas made of benign materials then that we get a hydrogen system with half the energy efficiancy of an electric system.
Even tesla will have a problem in the near future if they don't get a less expensive car to market sooner than two years away.
Tesla problem outside China will be the other way around. The will likely get hit by antitrust law in Europe and North America. I will say, North America will happen sooner. If you look at the fast charge infrastructure. You will find out Tesla EV will be the only viable choice in that market.
BYD Sold about 85 cars in Germany so far. Not good
1000 per month in Australia Israel Thailand India and several hundreds in Brazil Costa Rica. Just entered Mexico Spain Jordan. Dolphin only about to be released globally .. Then seagull
Its just the start my friend tesla start similarly they are not that far
It's all very well legacy companies being bailed out by their governments, but if they don't produce products that customers want they will just go bust again, even quicker next time.
For US company? No, they will get feed on whichever corpse of foreign compamy struck down by DC. It eill be any of the European company and some smaller player from China. XPeng, Nio are prime candidate.
I don't disagree with you but I suspect that mergers and acquisitions will take place allowing certain brands to continue. For instance Jeep remains a strong brand in the US and most buyers believe that they are buying an American product. Most people believe that Mini, Jaguar and Land Rover are British (yes I know that they have different owners). I also expect that some acquisitions will doom the buyers. You are right that there will be a financial blood bath. In no way would I invest in the Auto industry but it will be interesting to follow.
As always a fair evaluation, and good info
The Chinese brands also will get aid from the government, but the consolidation on the Chinese market is inevitable
This is a brilliant change. It may now fit my garage. Easier to park. Even looks better. 😊
A guy on youtube is telling me BMW and TOYOTA are going to get bankrupt? What are you smoking?
Can you picture Kodak going under in 1995? Can you imagine nokia will no longer relevant in consumer cell phone in 2002? Can you imagine RIM/blackberry will close out their hardware division in 2010?
There will likely be consolidation as well.
What's yr revised take on Xpeng?
What about MG? Wuling?
Foxconn owns the Lordstown motors factory now.
Japan cannot afford to allow the core of their economy to disappear. So they won’t. Consolation is coming.
Going to be interesting to see how this all plays out. ICE still has a wide majority share of the world's auto market, but how are they going to deal with the obvious EV revolution train? It's arriving fast & furious (no relation to the movies.. 😉).
This means choose your next car carefully, or your car will not be supported by its manufacturer.
Irrelevant, Tesla model means EOL once OEM support is discounted. You may still get some salvage part for noncritical components, but you will have very limit support from 3rd party aftermarket supplier. Tesla designed are highly integrated and it is very difficult to rebuild those components without factory support. This stament is more true to newer models.
@@林振华-t4v Pointless, Tesla has enough vehicles on the road that there will be third party aftermarkets suppliers lined up long after even if were to say Tesla company is gone.
I’m in a different view point here. The fate of the car companies are related to the fate of their nation states. The world will bifurcate to regional markets with global south under BRICS+ as one and the west. I am here to say all legacy brands will survive in one form or the other as BRICS+ car brands will be banned for sale in the west and western brands will exit the BRICS+ area. The CEO is speaking about the domestic car brands, if that is the case I agree. There will be a lot of mergers and consolidation while some will belly up. In the end there will be 11 Chinese car brands standing strong. BYD, FAW, Geely, SAIC, GAC, Chery, Li Auto Group (yup they will merge with someone), JAC (Nio will be sold to them), Huawei (they will be a car conglomerate), Tencent and Alibaba. These companies and their car brands will be the players in BRICS + area serving the 85% of global population. The key here is that these countries are de-dollarizing therefore there are no dollars to buy other brands. Other car brands in this area will include Iran, Middle East and Russian brands. The legacy companies will concentrate on 15% world market and with US being its main consumer market. But with the financial crisis and Europe facing an energy crisis, well hard to say what happens to these car brands.
I believe the car industry is going to return to "COACH BUILDERS" here in the US there was a time when Example: Body by Fisher was on the rocker panel of GM built cars. Coach builders will due the purpose built body and drive train will be the stuff you don't see! And supplied by whomever builds a good power unit.
Body by Fisher, more like rust by Fisher.
What about lucid? Not on either list. They are like rival and fisker and these on list?
They eill remain as a niche manufacture like McLaren and Ferrari. Being part if a bigger group
FIAT, Peugeot and RAM are all Stellantis
and Jeep. Guy doesn't know what he's talking about
This guy talks nonsense so expect amateurish mistakes
Some RUclipsrs intentionally make mistakes to get more comments and drive up the algorithms. I'm not sure which is worse, intentionally making this mistake or unintentionally doing it.
SAIC is not doing well, even their EV sales are not taking off. It seems a bit lazy to assume all Chinese car conglomerates will weather the storm when SAIC has lots of sales from GM and VW partnerships that are cratering with nothing to offset those sales.
At the same time you seem to ignore the strong position NIO has in the upper market and how they do have a unique product. I agree they are in a fragile and difficult situation right now but the building blocks for future succes are there.
You seem to think all the major players will surve this transition to EV with only two new major players entering (Tesla and BYD). This seems a but too much coasting on current trajectories. I'm seeing at least one of the chinese conglomerates going into restructuring and probably take over and SAIC is the most likely candidate, in spite of their huge sales today.
If you are bearish on Toyota which is Japans pride i dont see how SAIC is in a better position.
Mercedes will survive?! I think that deserves a video
They are actually very well positioned to keep going for a while if BYD is doing well. There are some badge engineering they can play with.
Interesting that you think KIA has got it wrong and Hyundai has it correct. Would like to see a video on that.
Aren't they the same company?
@@MarkXHolland - Yes they are.
In fact this is just one group together with also Genesis and shares in Rimac-Bugatti also. I do not see Kia making anything wrong or Hyundai or Genesis doing better. Not because I am a Tesla fanboy too but because the Koreans have understood DESIGN and TECHNOLOGY as to be USP in a melting away market. Most problems have legacy that are not flexible and burning money in power games, outdated structures and a lot of useless old factories they never will or can invest to.
I don’t see Toyota, Honda or Mazda going anywhere. Struggle? Right now yes. Mazda the most, but they will figure things out.
Fiat and RAM are parts of Stellantis...
Think your wrong about xpeng.
People Are waiting for the new updated P7and the new P9 think this wil hammer all in that segment.
Think there sales wil go up.
Well, your list makes sense. I think Renault will survive though. The next war will be on the field of affordability. They are just having fun now with all these 60K$, 70K$ and 80K$ toys (at that price point, that's what they are: toys for the wealthy). Life and death will be the game when the wealthy has been fed and the car makers will have to feed the regular folks.
I do remember when the CD (music) first came out. 25$ for my first David Bowie CD. The same LP, in vinyl format, was 13$. I remember thinking: prices of CDs will go down slow and steady, no problem. Well, the did go down, VERY slowly, while the vinyls went up. They met at 16$. And that was it. Vinyls died, CDs became the norm. The SAME thing will happen with EVs. Their price will lower ever so slowly, until they meet the price of ICE cars. That will be around 40K$ I think, in 5 years I think.
Is that a scenario that brings affordability to the masses? Can't tell, but I think it won't be better than that.
Agree about Renault. They have been in the EV space for a while and the Renault 5 EV is shaping up to be an awesome little city car.
Peugeot is Stellantis, Renault + Nissan + Mitsubishi is one Group
Xpeng positions itself the same as Tesla while the company is still too young. People love technology, but not many people are willing to premium price for additional tech other than the actual needs for transportation.
I'm glad to see BMW in that failure list. I owned two of their broke down cars I purchased new. I missed work because my BMW's kept breaking down. They are always in the shop. BMW can go to hell for selling unreliable cars.
"The CEO of XPeng is an ocean full of Shhh...."
Oh, "sharks".
competition is good. many will go belly up, that is natural, not the end of the world. survival the fittest!
this happened when the model t changed the i c e industry ,hundreds of smaller auto manufacturers disappeared leaving mostly the oem s we see today ,history most probably will repeat as it tends to do , great video as usual so refreshing to see your take on the e v revolution kee up the awesome work
😂 only people will lose their job, nothing will happen to any real car "maker" as they will stay as shell company and just sell the same car with little flavour added to it and lots of marketing....
Skoda, seat from vw are dead just shells and can be changed at will by vw😅
Building a car is moving from being a hardware challenge to being a hardware/software challenge. Most companies are taking their eye off the software challenge. This is like the cell phone market changing to the smartphone market. Tesla has a huge lead on the software side. I just don't see how anyone can catch up. Google helped the smartphone companies by creating Android. I just don't see that happening.
That is because car required a more emerging knowledge of bith world. In fact, it is still possible to have a dedicated solution for two separate sphere. You can have mechanical+ simple software control on driving sphere (which will be mission critical) and add on the smart software on top of it. The legacy auto makers include BYD, HongQi, SAIC etc are going this route. Tesla, Xpeng, NIO are taking one suit contols all.
And what happens if china-us relations deteriorate and China cars are in an
embargo? Or some superior battery developed by a start-up?
What if hydrogen ICE works out
Most predictions simply extend today's reality into the future
There are innumerable variables which can upset your prediction. Especially when things are changing so fast
The embargoed will be the only applicable case to work in your case. The battery case may not stand. The problem for start up battery break through will be a very paradoxical situation. First, a start up will struggle to ramp up. By the time they deployed to market, CATL, LG, BYD will quickly catch up. If the native country (e.g. US, Korea or China) place tech export control. Oh, fine, what ever the market the battery allow to sell will not have enough scale to drive down the price to phaee out the existing battery solutions. So at the end, the tech will likely everyone have it then start up go under or their is not enough market, the startup go under. Hydrogen.. well, it wont take off in foreseeable future. It is the future, make no mistake. But may not be something we can live to see
I think what’s misunderstood here is that not only are the car manufacturers cutting costs but so are suppliers. Once a proper EV supply chain is established across this new industry, things will not appear so dire. Maybe I’m wrong but that’s my opinion.
I am curious to understand why you think Mercedes will survive, but BMW may not?
I really like Mazda but I think they are in trouble.
Interesting that you are confident that GM and Ford can survive. I think that is a good thing if they can manage the transition.
They will survive because the US government will protect them from competition in the form of tax breaks, tariffs and made local incentives.
They will survive not because the manage well in transition. They will survive because they are too big to fail. They will get the might of federal reserve. If you know what I means. The Fed will keep Ford, GM and Chrysler alive till DC to clear all the obstacle for them. Another WW maybe. 😂
The car company that sells affordable electric cars to the world will win.
B. Y. D
@@ciybersal9833 I doubt, BYD has a long bad reputation in building cars that last.
Don’t agree that Toyota will go bankrupt while Ford and GM surviving. No way.
I don't know why XPENG simply fail to 'pull their collective fingers out' & get on with building cars with less emphasis on 'self driving' & Lidar, etc... Stop trying to sell customers things they do not want. Just build good CARS! Get away from Lidar & cars like helicopters. These things take their eyes off the main game.
Like tesla, amd NIO, Xpeng is believing autodriving solution is the real disruptors and where the gold mine is. There is lot of money to be made here. If im a marketring company, real estate developer. I will definitely want Tesla, Xpeng and Nio to sell me the pie chart showing what will attract people to go to certain place. Do you really think Google making money out of searching service and android? No, it is each click and each tap we made that help them make money
@@林振华-t4v You totally miss the point, and the sales XPENG should be making. ---Dream on, the boat will sail without you.
I believe one of them is Hyundai.
Sam tell me what you think about tesla's fuiure go to "waiting for tesla" check out the big inventories?
He Xiaopeng is correct. Not a new observation though. He's quite realistic claiming the auto market will shrink to 10 suppliers. There would be fewer, but nations will insist on supporting their own problem children.
- In Germany VW will survive, & probably Mercedes or BMW. But not all three: the German government won't pay to bail out everyone, so one or two will survive & the rest will be merged in. It comes down to which firms are best connected politically.
- In Japan Toyota is already absorbing Subaru; it's unlikely that 4-6 automakers will survive. Mitsubishi, Suzuki are definitely toast; probably Nissan too. Honda might actually fare better than Toyota.
- Hyundai is probably well-enough connected in Korea to receive necessary bailouts.
- China will definitely support 3-5, but not dozens.
- America's Ford is worse off financially than GM at present but is much better run; my money's on Ford to survive (though not literally of course: I wouldn't invest a dime in Ford stock). GM OTOH: GM is toast. It's better-connected politically than Ford but I suspect the US taxpayer is fed up with paying to bail out GM. They might do it one more time. In fact, they're doing it now with the various subsidy acts: Build Back Better, Build America Buy America, Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL)... the list goes on & on, but all told the US Government has announced & enacted Acts providing over $1 Trillion USD in subsidies, grants, loans, tax incentives... all to reverse 50 years of offshoring US manufacturing to (mostly) China.
Tesla claims it expects to own no more than 35% of the world auto market. That might be pessimistic. At present it looks more likely its market share will be closer to double that.
The shakeout isn't abnormal: it's par for the course in a new disrupted industry.
- Number of US buggy manufacturers that survived disruption & made the transition to auto manufacturing: 0. That's zero; nadda; zilch; bupkas. NONE.
- Number of telegraph operators that made the transition to phones: none.
- Number of typewriter companies that successfully made the transition to computer manufacturing: none.
- Number of cell phone manufacturers that survived transition to smartphones: none.
We could go on; the story doesn't change much in any disrupted industry.
So what's weird this time is the number of previous giants who (just maybe) survive on the strength of repeated government bailouts. Absent that, they'd all be toast. They're all carrying vast amounts of debt before considering the equally vast amounts they'll require to launch EV production - & survive the learning curve as they scale. VW, for instance, doesn't make enough profit to pay the interest on its current debt load - & it says it'll add another $150-200 billion in debt to build EV & battery plants. How?
THAT is why I think Mr. Xiaopeng is being generous. The majority of surviving auto firms in 10 years will be new entrants to the market. Starting with Tesla, obviously (& maybe including XPeng - Mr. Xiaopeng's company - but that one's a long shot).
It's very unclear that we've seen ANY of the other new entrants that will survive. Lucid, NIO, Nikola, Rivian, Arrival: they're all walking dead, zombies. None has yet figured out how to manufacture at a profit (NIO comes closest, but still loses 3K/car minimum) & (other than NIO) none has figured out how to scale. Odds are, they won't.
.
.
Last thoughts: neither consumers nor investors have yet realized this problem will snowball. There's a feedback loop:
1. As people switch to EV, the logistics of gasoline distribution networks will fall apart. You don't need 50% of the market to switch before the economics of gas distribution fail. Gas industry majors have already discovered this: they're selling & closing gas stations across the continent. Very soon "range anxiety" will describe drivers of legacy vehicles realizing they have to drive 30 min. or more to fill the tank.
2. The ONLY charging network with ubiquity will be Tesla's. Other cars will get some access to some of it; other than that you'll be limited to charging slowly where you can find a station, or limited to charging pretty much only at home.
3. Consumers will soon realize none of the current EV offerings - OTHER than Tesla - are going to stay on the market. New models are all doomed to be replaced as their makers either fold, or realize the designs are crap, & build better (maybe). Do you want to own an orphan car with no one to service it, no parts available? Do you want to gamble that the model you purchase will be supported, if the manufacturer somehow stays afloat? Most makers will be merged out of existence or go bust. But all makers' new EV models are doomed in this year or next. Buy knowing you won't find support. Unless you purchase a Tesla.
As gas vehicle drivers suffer range anxiety they'll increasingly buy EVs.
As purchasers realize they can't fuel up anything painlessly, anywhere, except in a Tesla, Tesla market share will climb.
As consumers realize other EV makers & models won't last, they'll gravitate towards Tesla.
So far, it's shaping up to be very nearly a one-company market in the long term.
I like your reasoning: 2 problems though, both to do with batteries. BYD make batteries but Tesla don't really have total control of their battery supply (tho they appear to be working on it). So I see a 2-company market in the long term. The other problem is that success in EVs is hugely dependent on the batteries, which are still in a relatively early stage of development, and if someone else (not BYD or CATL) comes up with a genuine breakthrough, it could again disrupt the industry. (I'm thinking LG, who might come up with something to give Hyundai a real boost)
Your comment on the negative feedback loop for the ICE is often overlooked or shrugged off, when in fact it is far more serious than you realise: I did an article for the 'Independent Australia' online newspaper explaining that ICE s involve critical parts, such as valves, which are always made by outside suppliers, who are totally dependent on high volumes for their relatively low cost. As ICEs reduce in number, demand for valves drops and the makers will charge much more or go out of business. Either way, the ICE enters its death spiral.
And speaking of valves; they require a lot of nickel, and some are provided with a hard seat surface, usually cobalt alloys. So people who talk of EVs requiring lots of exotic materials are ignorant, or are deliberately defaming EVs at the expense of ICE.
@@davidinkster1296 I think tesla will get hit by antitrust in the west. It is funny Tesla will least likely get hit in China. The Chinese spec. Tesla are actually using standard GB plug. The supercharge network is big enough but not the biggest one, the national grid and another one have bigger present. And the car they sell, are selling every well. But the amount of market share in EV still keep them far away from monopoly. So, all this curses appears to become blessing in the long run.
@@davidinkster1296 Thanks David. I wasn't aware of the issue with engine parts, but it doesn't surprise me. I think there are a lot of such issues we'll discover as the transition progresses. If the transition were going the other way we'd likely find ways around such problems: trust engineers to find a way. But the direction & speed of the transition means there'll be little incentive for hard work to overcome bottlenecks that develop in ICE manufacturing, and existing suppliers will own their little monopolies (winning ever more profit) as production drops. That valve manufacturer will do well.
Exxon is counting on this. We'll always need oil (one third of world production is a feedstock for chemical, pharma, lubricants, fertilizer & food manufacturing...) but the two thirds that Tesla has targeted (transportation & utility energy production) will dwindle fast. Meanwhile Exxon counts on owning an ever-bigger slice of the petro pie as other firms exit the field (or are acquired by Exxon) & will squeeze larger profits from it as it shrinks. They're doing that already. Business loves an oligopoly.
Tesla is removing cobalt from batteries. There'll be more innovation like this in batteries. Perhaps in metallurgy too, but cobalt won't ever be removed from the industrial supply chain. We could try to cut off the Congo from markets but China buys it & won't stop because of something as trivial as child slave labor (a western boycott is necessary but will just make that supply cheaper for China to purchase; we're seeing that effect now as India buys embargoed Russian oil for cheap). What we can do in the West is get better educated (thank you for educating me) & refuse to purchase tainted products. That'll require vigilance, constant regulatory effort & a lot of public input & pressure. Also expansion of refining in the West: China has a near-monopoly on many metals refining.
I'll watch for your posts.
@@林振华-t4v Anti-trust action against Tesla? Anything is possible, & businesses that previously dominated fields then get disrupted have been known to try to weaponize law. But it's hard to see that working in this case.
1. Tesla isn't acquiring other firms to dominate a field;
2. Tesla isn't using predatory pricing: there's no dumping going on. The Chinese use that to kill foreign competition, dumping product below cost until competitors go broke to take over an industry. Tesla is not selling below cost - in fact it's making record profits in auto manufacturing even after recent repeated price cuts. It isn't illegal or an unfair practice to manufacture at lower cost than a rival. If they can't keep up, too bad for them.
3. Tesla has bent over backwards in attempts to goad ICE firms to catch up, start making EVs in volume. It's thrown open the patent bin, encouraging rivals to use its patents for free. It's told battery suppliers they're free to sell its 4680 batteries to competitors once it has satisfied Tesla's needs. No other firm IN THE HISTORY OF BUSINESS has ever been so helpful to competitors. Tesla doesn't want to dominate the field: it wants to move transportation & energy production from fossil fuel use ASAP, worldwide.
Probably some major OEMs will be propped up by various governments. Companies may have to be built back up from almost nothing. But they won't be allowed to go without lots of effort. I hope so in a way. German and Japanese manufacturers could make compelling ev products once they get pointed in the right direction. We could use the competition.
i think both germany and japan might go bankrupt trying to help aal their companies that need to be saved. they wont be able to save all of them, will they be able to save any?
@@scottmcshannon6821Both countries will try hard, but there will be a limit to the help the governments might give. Cant see these Mercedes and BMW going down with the brand they have though.
@@scottmcshannon6821 One or two per country. Other than that, I think you're correct.
@@fernandopimentel5463 Those two (Mercedes/BMW) will likely merge. Question is whether the merged group stays afloat or merges into VW. VW has better political support, but financially is already a basket case. Mercedes/BMW would be financially better off, probably require less government support.
Absent massive support (literally HUNDREDS of billions of dollars) VW is toast. It's total profits don't currently cover the interest on outstanding debt. And it says it'll add up to $200 billion new debt to build batteries & EVs. Only way that happens is if the German state (federal AND Lower Saxony) cough up enough money to bail it out. So far, it appears VW is playing chicken, committing to bankruptcy & expecting a bailout.
@@scottmcshannon6821 Probably none should. Economically, its a losing game. But politically, they'll likely squander taxpayer billions - hundreds of billions - to support a couple firms in each country. The alternative is unpalatable. 1) Firms like VW, Toyota, GM, Hyundai have deep political support & influence. They'll use it. And 2) Disruption will hammer the entire economy; politicians will attempt to minimize that.
It's understandable. The Automobile Manufacturing industry - not just the major brands, but the enormous parts industry supporting each of them - is the biggest driver in manufacturing overall in Japan, the US, Germany & Korea. So it it's understandable why they'll try to rescue & maintain that industry in all countries.
It's a failed mission.
- Tesla has demonstrated that vertical integration is necessary, which eliminates much fo the secondary parts-supply market.
- Tesla has demanded that cars become reliable. The best maintenance is NO maintenance. So Tesla builds to last. The drivetrain in the Model 3 (its lowest-cost vehicle at present) uses much the same parts throughout, & the same motor, as its Semi. The Semi is intended to pull 100,000 lbs & last AT LEAST 1 million miles. The Model 3 has the same drivetrain & is built to last 1 million miles, easy. Largely maintenance-free, especially for the first 100,000 mi. That means the dealership model is DEAD. It means planned obsolescence - the guiding principle for all existing automakers - is DEAD. It means buying cars as a fashion product is DEAD. At some point Tesla has to consider polymer panels instead of sheet metal: the bodies of existing Teslas will rot out long before their mechanical parts or their batteries. Cybertruck will use aluminum: that's the other alternative.
- That means the overall auto market WILL SHRINK as a percentage of the total human population: fewer people will purchase cars. They'll overwhelmingly opt for an autopilot taxi service. Those that DO purchase a car will buy many fewer over their lifetime. Tesla intends to shrink the market (it'll grow worldwide though as more people in more countries become able to purchase one).
- VERY few car companies will be able to dance to that tune. None of them will commit to it at present: everything in Tesla's operating strategy & design philosophy is anathema to EVERY legacy auto manufacturer.
DO NOT count on GM to unwind its outsourcing strategy: it's committed to running a finance-led business, a brand, not a manufacturing company. DO NOT commit to GM or Ford renouncing planned obsolescence, selling cars as fashion items. Look hard at the ads for all major auto firms: they're ALL selling a feeling, a brand, a fashion statement. Not a vehicle. They were all doomed as soon as Tesla proved it could oppose that approach & make it work.
I don't see how they're not all doomed. Will government bailouts be enough to save firms committed to discredited strategies? What am I missing? ('cause I'm sure there's lots).
Nope, the horses are not dying when the stray dogs want. There will be a lot of "fusions" and "arrangements" but the Western world is aware and is not giving away this crucial industry. Stellantis CEO already talks about taxes for Chinese cars, and the Chinese cars already in Europe are not particularly cheap. This, in correlation with the world's domination preparation/takeover using BRICS, and the support for Russia's invasion... things are much more sensitive and dangerous than you think.
They can embargoed the Chinese car all they want. But the Chinese will find a way for their industry. BRICS or whatever. The ev evolution will continue steam ahead. The later you face competition, the worst off you are. The current European policy is ok, let the competition in. And force the local to adopt and evolve. North American on the hand. Once they struck tesla with Antitrust, the auto market will be eventually fxxk.
There will continue to be ICE vehicles manufactured for situations where EVs are not competitive with ICE vehicles.
This will be an ever shrinking market, however, it will not be non existent as some people currently assume will be the case.
You forgot Lucid Motors😂
As a long-term Tesla owner, I have to disagree on the extent of the bankruptcies. I suspect that sales penetration of BEVs will taper off at 50% by 2030. Toyota knows this and that’s why they are digging their heels in. They know what they are good at, and they intend to keep that slice of the pie. Not everyone wants an EV, even with all of their huge advantages and cost of ownership. I see it every day.
It will most likely get so somewhere about 60% globally (with higher % in more developed markets) before starting to taper off. In time it will be close to 90 though. Still, I don't think it will only be 9-10 companies, even if we disregards niche builders like Ferrari and the likes
I don’t think you’re right there….EV’s are so much better than ICE vehicles in so many ways and, if they’re significantly cheaper to buy and run, which they are becoming, who will want ICE cars? GM’s second biggest market is China where new pollution regulations will prevent ICE cars from being sold…so GM’s sales of 500,000 cars in China are going to vanish FAST with nothing to replace them! I love my Porsche Cayenne V8 but even it can get crushed in a sprint by a Tesla saloon … EV adoption is going exponential and ICE vehicle sales are doing the same but in the opposite direction….it’s inevitable
Just like film made a comeback after digital cameras gained traction? Technology disruptions and phase change transitions take no prisoners, my friend. I'm quite certain there will be no ICE industry left by 2030, probably even before than.
There's a feedback loop that'll drive faster switch to EVs than the market currently credits:
1. As people switch to EV, the logistics of gasoline distribution networks will fall apart. You don't need even 30% of the market to switch before the economics of gas distribution fail. I've had conversations with the people managing distribution for companies like Exxon & Sunoco in Canada: they've been worried about this for well over a decade. Gas industry majors are selling & closing gas stations across the continent. They're getting out of the business of retailing gas (they'll still own the refineries so profits won't suffer for some time). Very soon "range anxiety" will describe drivers of legacy vehicles realizing they have to drive 30 min. or more to fill the tank.
2. Consumers will soon realize none of the current EV offerings - OTHER than Tesla - are going to stay on the market. New models are all doomed to be replaced as their makers either fold, or realize the designs are crap, & build better (maybe). Do you want to own an orphan car with no one to service it, no parts available? Do you want to gamble that the model you purchase will be supported, if the manufacturer somehow stays afloat? Most makers will be merged out of existence or go bust. But all makers' new EV models are doomed in this year or next. Buy knowing you won't find support. Unless you purchase a Tesla.
Meanwhile if you're going to purchase an ICE vehicle you have to ask yourself whether you're confident the company that made it - and the dealer that would support it - will be around in five years. Increasingly that'll be in doubt. Wanna buy an orphan? No - didn't think so.
As gas vehicle drivers suffer range anxiety they'll increasingly buy EVs.
As ICE manufacturers hit the wall, consumers will become risk-averse & flee their products.
As consumers realize other EV makers & models won't last, they'll gravitate towards Tesla.
The switch to EVs is being mandated by law in the EU by 2035. Ditto for Canada & a part of the US (California, to start) but that'll grow to include the rest of the US. Doesn't matter: the market WILL switch long before 2035. Long before 2030. Consumers will switch as fast as EV manufacturers can scale up to provide EVs.
It’s 90+% in Norway and everyone else is following their trajectory. There are always people who think that a new technology won’t displace an old one. I don’t see many flip phones around and yet most people thought smartphones wouldn’t take over the market when they first came out.
Fiat, RAM & Peugeot are all part of Stellantis, I disagree with you on Stellantis, they are safe for the same reason VW are safe, the French Government is (was? well at least they had a significant share in PSA, I expect that translated to a smaller but still significant share Stellantis) a major shareholder. I expect that if the the French Government needs to provide a bail out it will involve a change of company leadership.
Whoever makes an EV that doesn't explode will survive.
30% of jobs in the US are transport,.
If all transport goes Electric all those jobs will be gone, and gone to China.
Only Huge corporations will control transport.
Can we talk about all the pollution produced in making Rare Earth magnets?
XPENG is the one of the future
Maybe, or more likely their R&D office in US get confiscated by FBI and then end up become Oracle or Nvidia's asset. Same goes to Nio. So I guess each one of them will get one.
Nissan , Honda , Toyota , Suzuki , BMW , Jaguar. These are the ones going down in the next 10 years. At this rate ICE Vehicles wont survive , the price of EVs is getting closer to the ICE ones.
Sam should have added Porsche and Ferrari to the list of survivors. Those firms have status and can continue indefinitely at admittedly small (but steadily growing) volumes.
I lose money on each sale, but i make it up in volume, is the mantra of way too many companies. Mr. Peng is not accurate; Countries will protect their homegrown companies forever, and so the Japanese market will be 90% domestic product, and the Thai market will be controlled, etc. So you will have to manufacture locally. That means VW, and Toyota, and Honda will be around for a long time. The question is whether Ford and GM can survive without foreign sales. Both imploding outside North America.
T E S L A - GLOBAL DOMINATION!!! The Google of Transportation and ENERGY!!!!
What about Amazon and rivian partnership? I see lots of their delivery vans near me, seems like Amazon has the cash to push them through
Will unfortunately not help them scale to volume that makes them profitable. They can only reach break even point and eventually profits by scaling to big volumes, but untill then will need to burn through billions of cash, while hoping their demand increases incrementally and is sustained. I wish them the best and hope they pull through.
Amazon will also not "sustain" or inject cash into Rivian if it does not make economic sense, they would then rather cut their losses, pull out and move on to another manufacturer that has already scaled with electric vans at that point and can supply them with cheaper options.
Rivian is spending $220,000 per unit while selling it for an average of $81,000 and taking a loss of (-$139,000) per truck. (Feb 13, 2023). The company lost $6.8 billion last year (2022). It reported in Dec. 2022 that it had $11.56 cash on hand, but the burn rate has increased so that'll support survival only through the current year, perhaps part of 2024.
The question is how much money Amazon is prepared to pour into Rivian. Increasingly it looks like a sinkhole. Last year Amazon grudgingly coughed up $2.3 billion more money to keep the firm afloat.
Bezos won't fall for the sunk-cost fallacy, won't keep throwing good money after bad. In fact, the cheap way out for Amazon would be for it to let Rivian go bankrupt, then buy the assets for a song. The problem with that is it would require Amazon to do what Rivian has thus-far been unable to accomplish: figure out how to build EVs AND scale, profitably. And since no one else (anywhere on the planet) has been able to do this, Bezos probably won't try.
Rivian makes a good product. Not better than Tesla's, but (so far) brilliantly in two model categories Tesla has neglected: pickup trucks and vans. So Rivian lacks competition.
Read that again: Rivian lacks competition. Even without competition and with a guaranteed buyer for everything it can produce, it still can't figure out how to build profitably. It loses $140K on every vehicle it builds.
As soon as Tesla or someone else offers a good van alternative, Amazon will cease support & Rivian is doomed. Tesla will likely introduce a van 2024/25; it's teasing it now.
No upside for Amazon
What about Lucid lol?
Yes alot will go out of business but car manufacturers need too cut down on models and stick with 4 or 5 models, i.e., Tesla model and produce them in scale too be profitable. The old gm Ford model will not fly, I think there in trouble more then newer companies. Gm and Ford seem like they don't have a clue in making evs that are profitable and desirable on mass scale. I love what vw, polestar, and rivian are doing, I'm betting big on them!!
time proved otherwise. xpeng is doing fine
Don't u think that AUDI and MG make money selling their EVs?
MG did not make money while they are selling ICE. But looking at bigger picture. Its parent group can suck up the lose because except MG 4. Other MG model are bage engineering
We should keep up the tariffs on Chinese cars, unless they build in the US then it's fair game.
Yeah, build here then confiscated the asset due to national security threat. Lol, "fool me once shame on you, fool me twice, shame on me.*
Be really funny if something else replaced battery just as the ones start getting to break even. 🤣
GM amd Ford will go before Toyota does. If quality matters at all.
It’s all about manufacturing efficiency and innovation. Ford & GM have no chance.
Then there is debt….
Not sure about Ford, to much debt , by far the biggest recall bill of any manufacturer and behind in ev race, and ice legacy to deal with once full ev World