102 replies to this topic

[mariner]

Ford has just annoucced big price cuts for its flagship F 150 Lighting and , of course Tesla recently cut prices in China and in Europe. 

 

https://abcnews.go.c...s-due-101336460

 

Whether this is genuine cost volume benefits being passed through or reality I don't know but it does remind me of how Henry Ford kept cutting ModelT prices and got volume to pay for it.

 

Of course it is differernt now but if one thing is going to boost EV sales i think it is lower prices vs IC models . 

 

Interestingly the big European OEM's like Renault are screaming foul at Tesla for ruining their EV profit margins!

 

Here in UK  the tax benefits of EV's are actually being reduced in April 2025. From todays nil annual tax EV's will pay £165/year like IC cars but with a stinger, all cars over £40K have an annual " luxary" uplift of £390 so total  annual tax is £555. 

 

Neow the snag is that many EV's, even volume ones like Kia's are over £40K but the hybrid equivalent may  be under £40K , so if you buy an EV in 2025 it might cost an extra £390 per year! .

 

[gruntguru]

This was inevitable. What you are seeing now is the tip of the iceberg.

[GreenMachine]

Normal.

 

It's price discrimination, where sellers/manufacturers charge high prices at introduction, mainly to take the cream from the early adopters prepared to pay a premium.  The price then drops as volume increases, competition emerges and strengthens and sales are more hard-fought.

 

I hope so GG, current prices are outside my budget. 

[gruntguru]

Its a lot more than economies of scale and competition. Its innovation. We are at the very tip of a very big iceberg.

 

Sandy Munro "Don't bet against Elon Musk cause you're always gonna lose"  https://www.youtube....h?v=wmPliRnQhU8

Some interesting discussion on the move from 12v to 48v - at last.

Also glimpses of the pathway to Elon's $20k EV.

Edited by gruntguru, 18 July 2023 - 22:45.

[ARTGP]

What Ford list as MSRP, and what a dealer will let a lightning go for are two different things. 

[gruntguru]

Ramping production to meet demand and/or competition entering the marketplace will soon fix that.

[Ross Stonefeld]

Some of it is production efficiencies and competition, but some is also discounting to respond to buying habits. 

[404KF2]

I remember a Bellingham WA Peugeot dealer selling Peugeot 405s in 1988 with "Market adjustment values" tacked on to the already high MSRP.

 

I laughed. Firstly I was not going to buy a car there, being from Canada, and secondly, they sold fewer that 6000 405s in the USA (under 500 in Canada) throughout the 4 years they tried to sell them. At the very end in late 1991, early 1992, they were literally giving them away for 40 cents on the dollar. The "market" soon corrects that sort of nonsense.

[just me again]

Tesla has disrupted the car market by using their cheaper production price to lower their prices.
Many legacy car brands are having trouble lowering their EV production price.

Vw: have slashed their EV production by a lot. They have before sold EV at a loss and probably can't lower their prices.

Stellantis: have complained about their EV production price, so are probably selling at a loss already.

Kia: last year it was nearly impossible to get an EV6! Probably because they will not raise production of a loss making car!

Mercedes and BMW: I think they for now are doing ok because they can charge higher prices!

Japanese brands: in big trouble because they have nearly no EV to sell!

Tesla Y is the most sold model in China and Europe in the first half year of 2023!!

Producing a car with fewer, but more expensive parts is apparently the way to go, even though I think making a car on Europe in a non unionised factory is not ok!!

Also making one without parking sensors is to cheap!

Because of the cheapness of the Y it is not only the EV market Tesla disrupt.
A lot of car buyers is changing sooner to EV, because an Y makes sense for them!

Edited by just me again, 20 July 2023 - 08:34.

[flatlandsman]

I think eventually cheaper cars have to come, as currently at least in terms of costs you have to be fairly well off to own one and in my eyes the vast majority of people who do own more than one other vehicle.

 

Having worked in the industry I can tell you motors and the drivetrains are not cheap, mass production is obviously where it has to be to keep costs down and most of that will be done in Asia, it was in my company so much so that in the space of 6 months all production here pretty stopped and was shipped out to a barely built facility in India, it really is the only option to make stuff cheap enough to warrant people spending the money.

I also know a lot of people have moved around in the industry, there is a lot of money, investment and wild speculation, for instance I know a few people involved with Arrival!!

 

But for a huge percentage of the population this is a pie dream owning an EV, millions of people live in flats, millions more in housing with no driveway making local charging a very difficult problem to resolve.  I think local investment and councils are doing a great job in trying to build in temporary infrastructure, the town I live in has twice now added more chargers in an area near to a hotel (prime area) near the M40 so it is coming. 

 

But personally I cannot see myself owning one in the next 10 years or so, mainly due to cost and infrastructure issues. 

[mariner]

Looking at Tesla's Q1 23 results they don’t actually have a lot of room for more price cuts unless it can get serious cost/volume or learning curve gains in production

 

Their automotive revenue was $21.23B for 466K units produced. That is $45.5K per unit with a 19.3% gross margin. so $8.8K gross profit per unit.

 

Another $4-5K price cut would wipe out half their gross profit and whilst you get absolute profit back with more sales 19.3% isa pretty low gross margin so it would be silly for Tesla to let it go lower I suspect.

 

BTW the revenue per unit for Tesla of $45.5K is much lower than the Detroit three’s average  ( remember it’s at retail whereas the D3 quote factory gates revenue), .The basic reason is one word TRUCKS

 

Gm's Arlington plant made 345K units in 2020 at an average price of $72K vs a bit less than $45K for Tesla.

 

So the new pick up Tesla must be key to Tesla getting both full US volume and profit as about half the US market is trucks.

 

It will be interesting to see if Tesla can beat theD3 at their home game of 30 years, trucks, when they have EV ones already in production well before Tesla and the few variants model Tesla use for efficiency is unlikely to work in the light duty truck market.

Edited by mariner, 20 July 2023 - 16:32.

[just me again]

Tesla have put their prices at a level where they still earn a little. But a lot of competitors either can't sell or is selling at a loss.
It will be interesting to see what will happen to VW. They are indepted and can't sell their EVs

[MikeTekRacing]

one thing to look at the results is the hard decline in cost per unit. That is happening with Giga Berlin and Texas still not fully ramped up.

There is more to take the cost down on this generation of cars.

 

The next generation, that will probably start to be built in Mexico will attempt to cut the costs again.

 

The thing with the traditional manufacturers is that they are slow and barely manage to keep up right now. Tesla is not slowing down on driving costs down

[cbo]

But for a huge percentage of the population this is a pie dream owning an EV, millions of people live in flats, millions more in housing with no driveway making local charging a very difficult problem to resolve. I think local investment and councils are doing a great job in trying to build in temporary infrastructure, the town I live in has twice now added more chargers in an area near to a hotel (prime area) near the M40 so it is coming.

But personally I cannot see myself owning one in the next 10 years or so, mainly due to cost and infrastructure issues.

Even if I lived in a flat, I would not need to charge at home. I may do 100-200 km a week driving for work, groceries etc. I could charge somewhere in town for 20 minutes and drive for a fortnight.

On longer trips, I would just charge along the road.

The real problem is charging cost (some charging companies overcharge to an insane degree) and the charging jungle leaving you with 20 different charging apps for a 1000 kilometer trip through Europe. Oh yes, and the hassle of charging if you tow a trailer.

But things already works a lot better now than, say, three years ago, and Tesla have shown everybody how to do it.

[flatlandsman]

I doubt many people have that luxury, I certainly do not and could not charge at home without walking a fair way, and there is no charging at work.  Not sure if you wold be able to reliably charge in town for 20 mins when you want to, I am sure some cars charge that fast, but at considerable cost I would guess

[Greg Locock]

I live off grid. In winter I would be able to drive for 10 km a day. The nearest public charger is half an hour away. My local town is considering going off-grid, I suspect in winter all the EV owners are going to get rationed.

[cbo]

I doubt many people have that luxury, I certainly do not and could not charge at home without walking a fair way, and there is no charging at work. Not sure if you wold be able to reliably charge in town for 20 mins when you want to, I am sure some cars charge that fast, but at considerable cost I would guess

I drive past a group of 12 Tesla chargers every day, there is always an available charger.

I know that not every part of the world is like that, but it goes to show that it is possible, simply a matter of investment.

Hyundais and Kias can charge at that rate. Not the chapest models, but I'm sure others can or soon will as well.

[flatlandsman]

The trouble with that is that the vast majority of people that own them are leasing. The second hand Tesla market will probably remain out of reach of the lower part of the population. 

 

it is coming agreed, but a long way to go before it is as reliable, simple to use and not rip off as normal fuel, hence the vast amount of population will not cross over until probably they are priced out or forced. 

 

This is basically what Just Stop oil are pushing, to force people to do things, and they do have a point but a naff way of going about it. 

 

And let's be honest that space, all those chargers, if you owned it, what would you do?  Stick 10 overpriced, miserable flats on it and make millions like 90 of landowners do or do that!

[gruntguru]

. . . hence the vast amount of population will not cross over until probably they are priced out or forced.. . . .

. . . . except of course for the other "vast amount of population" who are able to charge at home.

[flatlandsman]

Is that really leveling up as modern politics says?  No, it is the rich get richer poor get poorer, which as we know is what always happens, but in reality you need at least to be seen to be offering a cheap alternative right now that is still not an option. 

[cbo]

The trouble with that is that the vast majority of people that own them are leasing. The second hand Tesla market will probably remain out of reach of the lower part of the population.

it is coming agreed, but a long way to go before it is as reliable, simple to use and not rip off as normal fuel, hence the vast amount of population will not cross over until probably they are priced out or forced.

This is basically what Just Stop oil are pushing, to force people to do things, and they do have a point but a naff way of going about it.

And let's be honest that space, all those chargers, if you owned it, what would you do? Stick 10 overpriced, miserable flats on it and make millions like 90 of landowners do or do that!

It is comming, I see it every where I go on a daily basis. But the pace is obviously different, depending on where you live. Where I live, EVs are becomming ever more prominent in driveways, at the supermarket parking lot and more and more people I talk with are buying EVs. And they are not particularily wealthy. Some charge at home, but even some of those who have the opportunity, choose to charge at public chargers, using a flat rate subscription of some sort.

The used EV market is very much alive, offering anything from old Zoes to newish Kias imported from Germany and other countries.

The point I'm getting at, is that some people see insurmontable problems for EV, where the emperical evidience is that these problem have already been dealt with in many places.

The main problem is that the charging market is not sufficient regulated, but the EU and some countries have started to look at that.

As for land, I would convert my run down petrol station to a charging station with toilet facilities and a small shop. 20 chargers with an almost guarantied 24/7 100% use by people having time on their hands 🙂

[cbo]

Is that really leveling up as modern politics says? No, it is the rich get richer poor get poorer, which as we know is what always happens, but in reality you need at least to be seen to be offering a cheap alternative right now that is still not an option.

I thought that "levelling up" was a British Conservative hoax to get the unwashed masses to vote against their own interests?

😁😉

[Magoo]

Ford was losing money on every Lightning before the most recent price cut. 

 

Another scary piece of info: Ford found $6500 in per-unit cost savings on the Mach-E, and is still selling at below cost. 

 

CEO Jim Farley said they were shooting for Ford to turn profitable on EVs by 2026, but that seems doubtful. 

 

Here in the USA, a Bank of America analysis in spring of 2022 got a lot of attention. It said Ford and GM will exceed Tesla in US EV market share in  2026.

 

That was never in the cards. 

 

All along, the presumption has been that once the legacy automakers are tooled up for EV production, Tesla will be a bug on their windshield. 

 

We are now into the second generation of EVs from the legacy automakers and that is not happening. They continue to stumble. 

 

My great fear is that after several stumbles, they could back away from the EV market and basically leave it to the EV startups and China. 

Edited by Magoo, 23 July 2023 - 12:57.

[GreenMachine]

 they could back away from the EV market and basically leave it to the EV startups and China. 

 

So where would that leave the legacy carmakers?  It sounds like the death knell, if EV and battery technologies are the future of the car industry, in the long term if not the medium term.

[Magoo]

Fortunately, China has its own problems. Its labor costs are shooting straight up due to the aging demographic and rising standard of living. According to some analyses, Mexico is now cheaper. 

 

Meanwhile, the current 27.5 percent tariff on Chinese cars to the USA is a tall obstacle, and it's not likely to change soon due to China's aggressive political posture toward the USA. 

 

There's an opportunity for China-U.S. joint ventures in the USA, but there are obstacles there too. Some U.S. politicians are blocking these efforts, fearing an intellectual property drain from the USA to China In truth, the information flow is likely to  be in the opposite direction where EVs are concerned. 

 

Meanwhile, Tesla's global production capacity is now 2+ million per year and it has two more gigafactories in the pipe. Total US market share (not just EVs) is now 4 percent and will probably hit 6 percent. in a year. It has blown past BMW, VW, and Subaru and Nissan and Honda are next. Musk's target of 20 million cars per year, while still crazy and ridiculous, is now quite not as crazy and ridiculous as it first seemed. Like a number of things he says and does. 

 

All this was foreseen. By me. And some people a whole lot smarter than me, and somehow I was bright enough to pay attention. To everyone who said none this would ever happen, too late. It already did. 

 

 

 

[cbo]

I would happily admit to have underestimated just how fossilised and incompetent the legacy carmakers have been when it comes to EVs.

I fear that the German car industry may have begun to withdraw into a e-fuel wonderland, where they can keep the investment in internal combustion engine technology alive in the realisation that they are screwed when it comes to EVs.

The insistence of the German goverment to have the EU Zero Emission agreement altered to include e-fuelled cars seem to suggest this.

It may end with me having to buy a Tesla simply due to the lack of decent competetion. 😐

[mariner]

Heree is a peice of auto news I never expected to see

 

https://www.autocar....ars-europe-2023

l

That is not just the best selling EV, its the best seller in all of Europe, and over six months not just one month.

Edited by mariner, 30 July 2023 - 10:52.

[desmo]

When I have been visiting my house in Italy, I've noticed that even rural Tuscans (who are the very definition of late adopters) have started buying Teslas. Long after they were common as dirt on the US West Coast, they remained unseen and apparently unknown in Tuscany. Not any more.

[just me again]

Tesla is still an Expensive car. But the current price reductions have together with the lower running costs made them very attractive.
I have just tried a Tesla 3. Compared to other EV's it is cheap! And spacious.
I can't imagine a better family car than Tesla Y. And now it comes with a hitch as standard.(a must for every Dane with a garden) it is even more attractive.

The most sold car in Denmark first half of 2023 is Tesla Y with 8655 sold. The second car is Peugeot 208 with 2661 sold!

[flatlandsman]

Mots of this will be company car based leases surely> it is a no brainer for most execs to do this. 

[just me again]

No. I think most in Denmark are private sales. A lot of people are buying the most expensive vehicle they ever have bought. When they buy a Tesla Y.
That is how popular it is. People are borrowing more than usual, just to get a Tesla!!

Edited by just me again, 30 July 2023 - 17:23.

[Bloggsworth]

No comments about the burning cargo ship in the North Sea? VW are apparently unaware of whether any of the 500 EVs cars were produced by VAG - Must have had their bar-codes hacked. Still, who doesn't like a toxic cloud of cobalt, hydrogen cyanide et al billowing over the seascape - Good thing it didn't happen in an underground car-park at a major entertainment venue, if the fire wouldn't kill you, the smoke surely would. I have no idea whether an EV started the fire, but the sure as hell it made certain it burns long and hard - No oxygen needed, burning batteries supply their own. if you see an EV on fire, make sure you retreat upwind...

Edited by Bloggsworth, 30 July 2023 - 20:52.

[Magoo]

A Tesla is not really such an expensive car anymore. The Tesla 3 now sells for $40,240 in the USA. The ATP of a new vehicle in March 2023 was $48,008. 

 

(ATP = Average Transaction Price. Trendy new buzzword in the Detroit car biz these days. All the cool kids are saying it. As automakers back away from high volume due to shrinking margins and sketchy supply chains, they seek to maximize every sale they can manage to pull off. So they are killing base models, decontenting, shifting marketing dollars to higher margin vehicles, etc.) 

[404KF2]

No comments about the burning cargo ship in the North Sea?

I expect it's not good to inhale the fumes of any burning car, no matter what powered it.....

[djr900]

I expect it's not good to inhale the fumes of any burning car, no matter what powered it.....

True, and I would agree that EV fires are rare , just like petrol/ diesel car fires are rare

BUT, with EVs , fires often start when the vehicle is switched off, parked & unattended.
Where as petrol & diesel cars are usually being driven, or at least the engine is running, on the rare occasions they catch fire.

This parked & switched off fire-starting mode on EVs will need to be considered more in the future with regards to car parks, integral garages at homes, that sort of thing.

[cbo]

A Tesla is not really such an expensive car anymore. The Tesla 3 now sells for $40,240 in the USA. The ATP of a new vehicle in March 2023 was $48,008.

Teslas aren't really expensive in Denmark either.

Cheapest Model 3 is about 330.000 dkr. That is less than the cheapest VW Golf (1.5 tsi) at 350.000 dkr.

[just me again]

Tesla is cheap for it's size. But the second most sold model in Denmark is the Peugeot 208. A car which cost half of a Tesla!. Some Tesla buyers is going a car class up when they decide for a Tesla. Because Tesla is the most value for money EV.

[DogEarred]

A bit long but worth a watch..

 

 

 

[Bloggsworth]

A bit long but worth a watch..

 

 

 

Cadugan's problem is that he never uses 10 words where a 100 will do...

Edited by Bloggsworth, 11 August 2023 - 15:40.

[DW46]

Depends on what you consider “well off” to mean. I live in a major UK city with hardly any infrastructure or plans to develop it.

EV’s are so expensive compared to a second hand ICE that I’m still of the mindset that I’ve another two ICE cars to burn through before going EV.

Finally, I note the excitement re Tesla, it’s the soccer mum and middle class car of choice at the moment. Could never bring myself to buy one largely due to finding Musk unsavoury but also cause it looks boring and costs a bomb.

[just me again]

I do think, that if you are looking for a new car in the Tesla 3 or Y size. The Tesla models are the cheapes when you include running costs!!!

[flatlandsman]

I think even though the entire industry is heading electric we might see a move to already move away from it, there simply are not enough natural resources to cope with all the stuff we need for air, land, sea and even stuff like mowers, building machinery.

 

it is I think almost inevitable that electric will be very short lived. 

 

UNLESS the world can find a way of building a battery that does not rape the world as much as oil already has, it seems idiotic to me that we are doing the exact same thing again with perhaps an even less accessible natural resource. 

[mariner]

As I have mentioned the UK car market is heavy on fleet/business purchasing but for EV's it is  79%, i.e private buyers dont buy many.

 

This is brewing problems for the lease companies 

 

https://www.autocar....e-fleet-dumping

 

As the big fleet EV guys, Tesla and Polestar are direct sale they do'nt have second hand retail outlets as much so the auction system will decide residual values 

Edited by mariner, 11 August 2023 - 17:51.

[MikeTekRacing]

I think even though the entire industry is heading electric we might see a move to already move away from it, there simply are not enough natural resources to cope with all the stuff we need for air, land, sea and even stuff like mowers, building machinery.

 

it is I think almost inevitable that electric will be very short lived. 

 

UNLESS the world can find a way of building a battery that does not rape the world as much as oil already has, it seems idiotic to me that we are doing the exact same thing again with perhaps an even less accessible natural resource. 

there is nothing to suggest what you say here other than rumors probably supported/sponsored by the companies that have a vested interest in selling oil for burning. 

The analogy with the limited resources is also very wrong, as first of all - there is no shortage or material resources, maybe a shortage of companies extracting them (which is normal, there was no demand), and secondly, recycling is a huge area for getting back precious materials. Oil you burn and that's it

[flatlandsman]

The big issue though is where this stuff is being mined and how it is being mined.  Utter exploitation to a degree far away from oil

[MikeTekRacing]

I am a bit confused. You went from " there simply are not enough natural resources to cope with all the stuff we need to "this stuff is being mined and how it is being mined"

There's plenty of stuff around. We just need to take care of the people that mine it

[Greg Locock]

With lithium, the stuff exists, but the mines don't. Lithium demand is expected to increase by 20% annually for the next 10 years. It takes 5-7 years to open a new mine. This year there is more being mined than is needed, but towards the end of the decade there is going to be a squeeze. Yes, I do own shares in a lithium miner.

[Catalina Park]

Next thing it will be slave children working in cobalt mines to supply the cobalt that oil refineries use to remove sulphur. Or the cobalt used in machine tools.

[Lee Nicolle]

Practicalities. On You Tube 2 blokes drove a patrol BMW and an EV BMW about 200miles on Bristish motorways. Retail prices from motorway service stations. The petrol car used less fuel in pound terms than the EV. And the EV only just got there. Wheras the petrol car had enough fuel to drive back to the start. Then they did it in two Peugout 308s. A similar result. And remember electric cars are not yet paying any taxes on their use of roads so being subsidised by liquid fueled vehicles. This has to change and change quickly. Electric cars are heavy and do more damage to the roads. This and the far more expensive pricing makes them useless. That and the inevitable queu for charging infrastructure

Even charging at home which will ofcourse be cheaper with electricity pricing and supply as it is currently will not be great deal cheaper. And the blackouts caused inevitably will mean no normal homelife or charging your electric toy.

And IF you have no parking you simply cannot own one. 

Another story I have seen is that used EVs have no market value,, or range.  And it seems servicing is more expensive. I do know tyres are a good deal more expensive and have less life. 

A 100 years ago electric vehicles were a bust and no better now. 

[flatlandsman]

I think in certain circumstances they are a perfect solution, inner cities, large suburban areas.

 

But to blanket introduce them is dumb in the extreme.  And let's be honest here we all know why, because car users are the easiest target to target.  They are the most populace and easiest to rob. Marketing is SOOO easy with this. They have been for decades now and we are being targeted by governments and big industry to PAY for this to save ourselves while the big decision makers do very little to address the real issues, population growth, third world development and peripheral stuff like farming, deforestation etc. 

 

Planes are just as much of an issue but that is afar harder nut to crack. Why?  because business can't survive without them, we can't have the rich people flying coach. There are double standards about, and you need to surely see the bigger picture here before making a decision. 

 

If you are working class as someone earlier said it is probably three or four purchases away before you can even consider an EV. the people doing it now, are just the Ipod "looks nice on the coffee table, look how rich I am and how much of a difference I make, look at my green plate" generation that always buys everything first. And the majority at elast in the UK are ding it for business, tax reasons, falsely inflating the need and market.