Bosch CEO says they can't move to EV's quickly because too much is invested in gas and diesel. Very interesting interview.
Bosch CEO says diesel technology remains crucial to meeting climate goals
This is the problem with all these "CEO"s. Not in touch with anything but what they are doing right now. No idea of what is coming, why, the economics, the demise of oil. DUH! I've been watching the EV movement for two decades. Where was this CEO?? Oil is getting more expensive to "mine" and process every day, but don't write off diesel! Be the last on your block to move to the future!
Great link. That sentence said it all:
"In our factories, we are currently investing billions of euros in machines, tools and systems, especially for diesel and gasoline engines. These investments will become worthless because they cannot be used for electromobility."
I had to read this trice ! Because they are investing Billions today in Diesel they cannot move faster in electro mobility!
They should fire him right away!
That sentiment Mike referred to, which is evident in the quote avoigt selected, does really raise the curtain quite a bit on what we've only been able to speculate on circumstantially, and
it's not necessarily about being "stupid" or "incapable of comprehending where the industry is going"... effectively the 15 or so major incumbent global automakers and their largest suppliers like Bosch have a cartel.
Why would these incumbents implode their cash machines any earlier than they have to if they are only considering "the bottom line"?
"Because that's how capitalism works, these backwards short-sighted fools are going to be Blackberry so fast they won't know what happened."
Nope. That's where the effective cartel part comes in combined with the massive barriers to entry/capital requirement of ramping up EV battery supply production and EV production. If Tesla knocks it out of the park they will be at 1 million vehicles per year in 2020 and ~5 million in 2025, or 1% and 5% of the global market... all the while that market grows 10-20% over the next 7 years or so (i.e. a net gain of about 10 million more gas vehicles sold by the incumbents). Whether or not there is explicit collusion, if these incumbents just watch each other and check that nobody is really turning full course for EVs, they continue to make the most of their massive carbon fuel vehicle production, talent, and way of life/ego/identity investments for as long as possible. Outsiders? How many total cars do you think Faraday Future, Lucid, etc., will produce in 2020 and 2025?
Yes, there are some caveats to this... the luxury makers, ~10% of the auto market by units, has been hit by Tesla at the top of their lines, and is about to be hit right in the middle of their lines. So, the likes of Daimler and Porsche can't move quite as slowly as Toyota or Ford. China has the capacity to grow native EV production capacity very sharply and they are looking to phase out ICE in 2030. As the article mentions, VW apparently was quite not in agreement with Bosch on some policy regarding whether to incentivize diesel or not. Yes, some consumers will hold out for an EV rather than buy a new ICE c.2022 onward, even if it makes keeping their old ICE longer because EV demand comes to strongly outstrips demand by around that year. But, guess what, another seismic disruption is happening. Autonomous driving will make cars 10X safer in the next 5 years or so according to none other than Elon Musk. What percent of consumers will push out buying a new car multiple years because they choose to wait in line to ensure they get an EV when that means driving an old car with 10X the risk of death or serious injury during the years they wait on line for an EV instead of buying an ICE with autonomous driving?
All that said, the auto incumbents are under nowhere near the time pressure that the likes of Blackberry was... Tesla (and the coming Chinese automakers that will start selling globally) will not have 50% market share in another couple of years.
Yes, it's all but certain that eventually they have to all switch to EVs, but, imploding their ICE business to switch to EVs is like jumping off a cliff. Some will make it and some wont. It may not be kind to the environment, but, if these incumbents don't see any of their peers jumping off the cliff, is it really "stupid" that they push off making that jump another 5-10 years? Kind of would be consistent with the
massive amount of gibberish we see in the media giving the public a fun house distorted view of Tesla Musk, and EVs generally. A bit like some people with very deep pockets and friends in high places wanting to influence the public's perception as to whether Tesla/EVs are the future, or beyond a niche little more than an industry maybe, possibly a decade or more out, but, for today, propped up by government programs.
Yes, to some extent, jumping off the cliff in 5 to10 years will be more risking than doing it is today, but, it's already very risky today... if they don't see the "other guy" jumping off the cliff, they'll keep making ICE money for years to come. Even so called front runner VW is talking about something only on the order of 25% EVs in 2025, and I'm not sure if they are committing to that being BEVs vs. plug-in hybrids, etc.
Much longer detailed discussion of this here,
The Fractured Tipping Point Moat
