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EV Market Share

Discussion in 'TSLA Investor Discussions' started by jhm, Jul 26, 2018.

  1. jhm

    jhm Well-Known Member

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    EV Sales: PSA - FCA merger deal

    We have anticipated that part of the transition to EVs is that the rest of the industry will likely consolidate. So it should surprise no one that PSA and FCA would countenance a merger.

    As Pointes frames it, "This deal exists basically because with it, PSA will have finally its door open to the US and Canadian market, while FCA will have the EV platforms and technology that it needs to make the transition from the ICE to the EV era."

    Certainly, automakers must band together to get the scale to invest properly in EVs. So mergers do this. But the flip side to bring ne EV models to market is that there are simply too many ICE models on the market. Pointes could dress up his blog just by adding reporting that would be a sort of death watch for ICE models set for extinction. Mergers create opportunities to cull out lesser models. My hunch is that increasingly the ICE market will be driven by nostalgia. Classic models that speak to what customers love about a particular brand are the ones to keep. For example, short, stubby Fiats is what that that brand is all about. Lengthening Fiats dilutes the brand value. Double down on quintessential and slough off the rest. Let the marketing department milk value out of public craving for nostalgic yesteryears, and free up engineering and design resources to create the next generation of EVs.
     
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  2. ReflexFunds

    ReflexFunds Active Member

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    I think these large mergers will be great for the EV transition primarily because it will lead to discontinuation of models and ICE production lines. Once merged it will make sense for these companies to discontinue models which compete with each other and increase utilisation of the remaining production lines.

    I wonder which merger will be next?
    A proper Nissan Renault merger?
    BMW merging with Daimler?
    VW buying Ford?
    GM joining in the Nissan Renault merger?
     
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  3. jhm

    jhm Well-Known Member

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    Hmm, if Ford were to merge with GM, the combination could own the coming government bailout of US ICE industry.
     
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  4. RobStark

    RobStark Well-Known Member

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    This is no longer unthinkable.

    2019 GM + Ford US market share is less than 1960 GM market share.

    I think depending on the US administrating, the DOJ may have a bigger problem with VW Group buying Ford.

    Maybe in a few years GM+ Ford won't have ~70% US pickup market share.
     
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  5. jhm

    jhm Well-Known Member

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  6. FlatSix911

    FlatSix911 Porsche 918 Hybrid

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  7. jhm

    jhm Well-Known Member

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    IMG_20191206_014350.png

    This is fascinating Tesla and BYD have been neck and neck in cumulative sales. Tesla is just now pulling out ahead.

    This makes me think about how experience curves are based on doubling cumulative production. So it looks like BYD and Tesla should be about equally far along on their respective experience curves. However, only half of BYD's EV experience is specifically with BEVs. The other half is PHEV experience. How transferable is that? So Tesla could be close to a full doubling ahead of BYD specifically on BEV experience.

    Could that mean that Tesla is about 15% more efficient than BYD? It's hard to compare costs because manufacturing may be cheaper in China than the US. I guess we'll see how Shanghai GF can compete head to head with the domestic competition.

    I do think that the experience curve perspective is important for understanding the value of market share. Those that dominate market share for a long time can have several more doubling of cumulative sales than the rest. Even just to double experience as quickly as the rest, require holding market share steady. If Tesla is just 1 doubling ahead of the top competitors, it could have more than a 15% cost advantage over the rest of the field. That's pretty significant.
     
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  8. Doggydogworld

    Doggydogworld Active Member

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    BYD has half the experience in BEVs, roughly the same experience in EVs and more than twice the experience in cars.

    The big legacy carmakers of course have a hundred-fold more experience with cars. The powertrain (including battery) is less than half of EV COGs, so who has the overall advantage? And who will gain more quickly?
     
  9. jhm

    jhm Well-Known Member

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    It can be hard to unlearn stuff too. (I appreciate that more after having had my 50th birthday.) For example, when Tesla produced the Roadster, it learned the hard way that they needed to design the whole vehicle from the ground up. That may be easy to come up with when you are trying to work with stuff made by other for ICE. But I think it will be much harder from some legacy OEMs to unlearn the models they once built from the ground up. They will try harder to recycle older designs rather than start with a fresh page.

    So sure, it's hard to tell who has a decisive advantage with whatever experience they've got. But so far I'm pretty skeptical about one of the legacy OEMs being able to start from behind and actually catch up with Tesla, short of serious underperformance on Tesla's part. They don't really have the luxury of time that Tesla had to learn from one model to the next. Instead, many of them want to blast out many models in parallel. They have to cover most of their segments in very short order. But attempting to learn in parallel could mean making the same sort of mistakes across multiple product lines. in the second half of the coming decade, they'll be into second and third generation attempts. But I suspect in the early 2020s, they will mostly be first and second generation. Where would we place a car like the Bolt? GM had good success with the Volt, but did that solidly position GM to make the Bolt as a solid second generation vehicle? Regardless, it has be eclipsed by the Model 3 which is a very solid gen 3 vehicle. Model Y should also be a good gen 3 with maybe a little more refined than the Model 3. But Cybertruck, Roadster 2, and possibly Semi are into gen 4 territory. So looking at VW for example, they seem to just want to electrify their existing models all in the next 6 years or so. I hope they get it right because they might not get very many second chances.

    So we'll see how they all do in the next few years.
     
  10. RobStark

    RobStark Well-Known Member

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    VW isn't modifying their existing ICEv platforms into BEVs the way Nissan modified their compact car B Platform into the LEAF platform or how GM modified their Cruze platform into the Volt and later Bolt.

    The MEB are entirely new BEV pieces or what they call a toolkit. Like lego pieces that can be mixed and matched for different sized BEVs with various specifications. You can't make an MEB ICEv or PHEV. It is BEV specific.

    Whether they did them right or not remains to be seen.
     
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  11. Doggydogworld

    Doggydogworld Active Member

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    IMHO Tesla's main advantage is marketing. Musk alone can sell EVs in the volumes required to justify integrated designs. At 25-50k units/year you have little choice but to use off-the-shelf parts for almost everything. Combine that with the fact that legacy carmakers went horizontal decades ago and forgot how to engineer anything besides engines (useless) and body in white and it's a problem.

    Regulation in EU and China should drive legacy volumes high enough that component makers catch up to Tesla. We're already seeing it with batteries -- e.g. GF3 will soon use off-the-shelf cells. Not quite as good as Pana's, but close enough. Drive unit and power electronics suppliers could pass Tesla on the experience curve in two years. That would never happen without regulations forcing volumes up.
     
  12. jhm

    jhm Well-Known Member

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    Those are great points about component makers scaling up. This is important for both price and volume. The advantage Tesla has by doing most of this in house is that they can switch over to outsourcing anytime it is advantageous to do so. They have been largely forced into insourcing because many suppliers could not give them the volume and quality at the price they could obtain in house. But as suppliers step up their game and offer Tesla competitive pricing, Tesla should switch over. This will actually free up more capital and talent for Tesla to redeploy to high value uses while enabling Tesla to reduce cost structure.

    Experience curve gains are not just what an individual producer obtains, but the efficiency gains of the whole upstream supply chain as well. Other OEMs will benefit from the experience of the upstream supply chain as well, but this does not mean that they can surpass Tesla on this basis alone. But what it means is that costs for all EV makers will decline, and this hastens the crossover point where EVs are cheaper to produce than comparable ICE vehicles. So I'm inclined to see this development as a much bigger threat to legacy ICE OEMs than to Tesla. Making affordable EVs is not just about driving battery pack price down to $100/kWh as the media seems to fixate upon, but in optimizing all components in the EV supply chain. Even little things like new lubricants optimized for EV application are part of this bigger picture.
     
  13. FlatSix911

    FlatSix911 Porsche 918 Hybrid

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    Interesting market trends... https://electrek.co/2020/01/17/tesla-model-3-disrupting-luxury-sedan-market-model-y/

    It looks like Tesla Model 3 might be seriously disrupting the luxury sedan market in the US, based on the sales data in the segment, and Model Y could do the same to the even bigger compact SUV segment. The publication added to the finding:

    “A sudden downward shift in all the vehicles can be clearly seen in the chart after mass production of Tesla Model 3 kicked off in 2018. The downtrend is further extended in 2019.” They listed the sales growth for 2017-2019 of the top vehicles in the segment:
    upload_2020-1-17_20-43-32.png

    • BMW 4-Series: -53%
    • Mercedes-Benz C-Class: -37%
    • Infiniti Q50: -36%
    • Acura TLX -24%
    • Audi A4/S4: -23%
    • Mercedes-Benz E-Class: -21%
    • BMW 3 Series: -20%
    • BMW 5-Series: -5%
    • Lexus ES: -0.12%
     
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  14. Silent Ludicrosy

    Silent Ludicrosy Supporting Member

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    Some interesting stats about Arizona EVs in this article Arizona ending energy-efficient plate program in March
    72% of BEVs in Arizona are Teslas
    40% of BEVs in Arizona are Model 3s
    90% of new BEV registrations in AZ are Teslas
    Median price of new BEVs in AZ is $60917
    Hybrids are being phased out of HOV lane access because of the huge increase in EV registrations
     
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  15. FlatSix911

    FlatSix911 Porsche 918 Hybrid

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    Posted on Electrek... Tesla (TSLA) market cap surges past $100 billion — triggering Musk's compensation plan - Electrek

    The company’s valuation has surged past several automakers to become the most valuable US automaker. Now it has surged past even Volkswagen, an automaker who produces millions of vehicles per year. At just over $100 billion, Tesla’s market capitalization is now second only to Toyota, which has quite the lead on everyone else (via Top 25 Automakers by Market Cap by u/brandude87):

    [​IMG]
     
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  16. mongo

    mongo Well-Known Member

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    Gave a disagree because Fred is wrong. Once the 6 month and 30 day averages are above 100B, Elon's award triggers, and then he has to hold for 5 years (beyond paying for taxes).
    At least the comment section of the article knows what they are talking about.
     
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  17. RobStark

    RobStark Well-Known Member

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  18. jhm

    jhm Well-Known Member

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    Wow! Tesla is more than twice its nearest competitor. What happened to BYD? It's fallen behind BAIC.

    I'm frustrated that EVs have not grown much in 2019. But as a Tesla investor I'm glad Tesla is grabbing so much share. My view before was that maybe Tesla could grab 20% of ultimate auto market. Now it looks like 25% is likely.

    I've also heard that engineers in China are concerned that they are not ready to compete with Tesla in the domestic market. Tesla looks to take substantial market share. Indeed Tesla may already be Osborning Chinese EVs. If the Chinese auto makers do not rise to the challenge, we could be looking at Tesla grabbing a half or more of the global EV market.

    This is not what I am rooting for. I want a world where the EV market is robust and competitive. If Tesla takes 50% it represents a massive failure of automakers everywhere.
     
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  19. RobStark

    RobStark Well-Known Member

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    Chinese incentives have been reduced by 2/3 starting second half of 2019 and now Tesla qualifies for the lower incentives for MiC Model 3.

    It seems the mid tier (BYD) and premium Chinese BEVs NIO and Xpeng have been hit harder than the mass market Chinese brand BEVs in China by the double whammy of lower incentives and MiC Model 3.

    With Elon presenting a roadmap to 2 TWh/year of batteries it seems that Tesla market share will constrained by government fiat rather than the market.

    I don't see Dems being kosher with Tesla have plus 50% US market share or EU/China being ok with Tesla exceeding 20% market share. So yeah, 25% global market share for Tesla seems about right.
     
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  20. jhm

    jhm Well-Known Member

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    Agree. One of the limits any company faces to high marketshare is political pushback. Right now the fact that Tesla has a 78% share of the EV market is overshadowed by how small that share of the total market is. So what happens as EV share grows?
     
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