Tesla BEV Competition Developments

[RobStark]

It all sounds fine without any context. But if we're talking crossovers, SUVs, and pickups for more meaningful sales than the Bolt, their average battery size is going to be higher than Tesla due to lower efficiency. 100 kWh? So 30 GWh covers about 300,000 vehicles? That lines up reasonably well with 270k/year from Hamtramck and some more Lyriqs and whatever from Tennessee.

And GM sold 7.7M vehicles last year?

So congrats, let's throw GM a big party, if all goes totally as planned (not, of course, a given), they're planning to shift NEARLY FOUR PERCENT of production to EVs in the next few years?!? Boy, they've really caught this electric wave.

This doesn't include GM China.

It is more than what Daimler,BMW,Toyota,Honda,Nissan,Ford,Mazda,Subaru,Suzuki,Hyundia-Kia are doing.

GM in 2025 will also probably sell more EVs than Rivian, Lucid, and the Chinese startups. Probably more than Volvo-Polestar.

It is debatable whether VW will actually be able to acquire enough cells for 1M+ BEVs in 2025.

 

[RobStark]

I sure HOPE they can make a profit on a $112k vehicle!

The real question is whether they can make a profit on a more Bolt-like crossover, at a price/features combo that’s attractive enough to sell in increments of 100k not 10k.

The Hummer EV will eventually be sold at $80k. The fully loaded $112k version will be a small percentage of sales.

The Chevy full size electric pickup will eventually get down to $50k or less.

GM only makes money selling Pickup trucks, SUVs based body on frame pickups, and the Chinese Buick Minivan. Maybe it makes a bit on Corvette, analyst dont' think it is important enough to do a deep dive into.It literally loses money on everything else. Everything else is a compliance play,halo vehicle, or bait to get young buyers into the GM family.

More EVs means they don't need to sell money losing ICE sedans and sedan based unibody crossovers to comply with CAFE. Or the Chinese equivalent.

A Bolt using Ultium cells making $250 per vehicle is a win for GM. Better than losing $1500 per Cruz/Spark sold.

Once GM sells enough BEVs they will drop base model ICEv. And only sell well equipped/fully loaded versions. That actually make money. So ICEv sells will drop. BEVs as a percentage of total sales will be far greater than 4% for GM in 2025.

 

[ammulder]

BEVs as a percentage of total sales will be far greater than 4% for GM in 2025.

That would be great. But there are some big BUTs.

First, there's the products. So far, they haven't built an attractive EV (by which I mean, combination of features, price, body style, etc.). It's lovely that they plan on an $80K Hummer some day, but it remains to be seen whether what they're offering at $80K is a success (for instance, that's a lot of money for 250 miles of range). I've heard someone say that the current money-losing Bolt is like $20K more than the equivalent ICE. I'm not sure where that came from, but for sure they need to change a lot before they actually earn $250 profit on every Bolt. So one issue is getting the offering right. It's fine to go top-down by leading with the Hummer and Cadillac and etc... just not clear when they'll reach the mass market that way, and definitely not obvious they'll get there by 2025.

Then, there's the batteries. This JV in Ohio is great, but it won't take them much past 4% with the 30 GWh capacity target that's been provided. You (or someone) said they've bought more land for potential future expansion... but I'm not even clear on when they'll actually complete the initial capacity. From what I can tell the goal is 2023. If it takes 2019-2023 to get enough batteries to convert 4% of the fleet to BEV, is it realistic that they'll make dramatically more progress by 2025? It seems unlikely that they'd, say, triple the battery capacity in another two years.

And either one of these things not going well could derail the other.

I mean, then there's the dealers. And the finicky nationwide charging network. There are other challenges out there. It's not clear to me that even 4% by 2025 is a given.

 

[mikevbf]

If in the future cities start banning ICE vehicles on their streets, this would be a cool option: electric conversion in 4 hours:
Transition One Will Convert Your Old Gasmobile To Electric Power In About 4 Hours

 

[RobStark]

That would be great. But there are some big BUTs.

First, there's the products. So far, they haven't built an attractive EV (by which I mean, combination of features, price, body style, etc.). It's lovely that they plan on an $80K Hummer some day, but it remains to be seen whether what they're offering at $80K is a success (for instance, that's a lot of money for 250 miles of range). I've heard someone say that the current money-losing Bolt is like $20K more than the equivalent ICE. I'm not sure where that came from, but for sure they need to change a lot before they actually earn $250 profit on every Bolt. So one issue is getting the offering right. It's fine to go top-down by leading with the Hummer and Cadillac and etc... just not clear when they'll reach the mass market that way, and definitely not obvious they'll get there by 2025.

Then, there's the batteries. This JV in Ohio is great, but it won't take them much past 4% with the 30 GWh capacity target that's been provided. You (or someone) said they've bought more land for potential future expansion... but I'm not even clear on when they'll actually complete the initial capacity. From what I can tell the goal is 2023. If it takes 2019-2023 to get enough batteries to convert 4% of the fleet to BEV, is it realistic that they'll make dramatically more progress by 2025? It seems unlikely that they'd, say, triple the battery capacity in another two years.

And either one of these things not going well could derail the other.

I mean, then there's the dealers. And the finicky nationwide charging network. There are other challenges out there. It's not clear to me that even 4% by 2025 is a given.

Well, in fact nothing is a given.

Much like Tesla, future specs are placeholders. Various GM execs said they will be competitive. As the market changes so will GM specs.

Much like Tesla, GM can buy cells outside of their JV. This guarantees them a base supply so it does not leave them at the whim of Asian battery cell suppliers.

It is clear for many years now that GM isn't chasing market share but profitability. The obvious candidate to go are ICEv that don't make money. They are a drag not only on profitability but also CO2/CAFE compliance.

Again worst case scenario globally is GM is in third place behind Tesla and VW. Best case is they are in 2nd place.

 

[ammulder]

Again worst case scenario globally is GM is in third place behind Tesla and VW. Best case is they are in 2nd place.

I'm not sure what time frame you're looking at.

If it's between now and 2025, I think you're a bit on the optimistic side to think GM could surpass VW. I understand the ID.3 is getting a good reception in Europe (Norway sales numbers, etc.), and there's little reason to think the ID.4 won't as well. I expect those cars will sell way more than the Bolt, Hummer, and Lyriq, and VW still technically has the eTron, Taycan, and so on. Not sure what else GM will bring to the table by 2025. But to your point, I have not idea what they're doing in China, nor whether we should really count that. I mean, if they have a JV selling super-low margin $10K cars really well... is that really meaningful? Do they have some kind of good business in China? Does VW?

Anyway, if the horizon is 2030, I think you're WAY too optimistic, and GM will be doing well just to be a going concern. I do believe EVs will truly hit their stride by then, sending ICE sales off a cliff. I don't personally think GM can turn it around fast enough. If by 2023 they've got 2 EV factories and 1 battery factory, that still leaves more than 30 ICE-related factories in the US alone. I don't think they can convert even half of those facilities to EVs between 2023 and 2030 (rough cost: $2B ea, $30B total?), much less swap out half their current union employees for EV-skilled employees, find an EV sales and service model that works for their dealerships, and put the right products in place. Even if they have a number of solid EV offerings by then, I think they'll still be heavily dependent on ICE sales in 2030, and with sales taking a nosedive, I think their situation will be, at best, grim.

Finally, for you to say "Much like Tesla, future specs are placeholders" is disingenuous. First, as Elon was recently quite clear about WRT the Cybertruck, Tesla generally plans to exceed the teased specs. And I think they've earned our trust there. Did they really jump bump the Model 3 range to 350 miles? Whereas I don't recall a lot of (OK, any) non-Tesla EVs where the actual EPA range was a positive surprise. (Taycan? eTron? Polestar 2? Bueller?) And second, I'm not even talking about "specs." I am willing to give GM the benefit of the doubt that the Hummer will have 350 miles of range and 0-60 in 3s and whatever approach angle and blah blah blah. I'm talking about PRODUCTS. Let's look at GM's 10 best-selling vehicles (2019, total of 2M units across the top 10) and their starting prices, and you can tell me where GM has a competitive offering with ANY ANNOUNCED SPECS at all in their EV lineup:

#1/#3/#6: pickups, $35K, $30K, $26K starting prices, respectively
#2/#9: compact crossover, $24K/$25K starting prices
#4/#10: 3-row SUV, $30K/$49K starting price
#5: sedan, $22K starting price
#7/#8: subcompact SUVs, $22K/$23K starting prices

Note that only one of those has a starting price over $35K, and it's still under $50K. Granted, people buy more expensive versions of these cars -- I think I've heard the average selling price in the US is on the order of $40K, though at a quick look the published numbers are all over the place.

So, that's cool. Where's the GM EV (other than the Bolt, which has already proven to be unprofitable AND unpopular), that will address any of those top 10 markets, with a price approaching $40K (if not near the actual starting prices of 9 out of the 10 of those models)?

And if there's not even a plan announced for that, how is GM going to turn that around between the $80K Hummer/$60K Lyriq (which are $31K/$38K more than the corresponding top 10 base models) in 2023 and disaster in 2030? And not just put the offerings out there, but make them profitable enough to fill in for even 1M units of lost sales off that top 10 list?

 

[RobStark]

I'm not sure what time frame you're looking at.

If it's between now and 2025, I think you're a bit on the optimistic side to think GM could surpass VW. I understand the ID.3 is getting a good reception in Europe (Norway sales numbers, etc.), and there's little reason to think the ID.4 won't as well. I expect those cars will sell way more than the Bolt, Hummer, and Lyriq, and VW still technically has the eTron, Taycan, and so on. Not sure what else GM will bring to the table by 2025. But to your point, I have not idea what they're doing in China, nor whether we should really count that. I mean, if they have a JV selling super-low margin $10K cars really well... is that really meaningful? Do they have some kind of good business in China? Does VW?

Anyway, if the horizon is 2030, I think you're WAY too optimistic, and GM will be doing well just to be a going concern. I do believe EVs will truly hit their stride by then, sending ICE sales off a cliff. I don't personally think GM can turn it around fast enough. If by 2023 they've got 2 EV factories and 1 battery factory, that still leaves more than 30 ICE-related factories in the US alone. I don't think they can convert even half of those facilities to EVs between 2023 and 2030 (rough cost: $2B ea, $30B total?), much less swap out half their current union employees for EV-skilled employees, find an EV sales and service model that works for their dealerships, and put the right products in place. Even if they have a number of solid EV offerings by then, I think they'll still be heavily dependent on ICE sales in 2030, and with sales taking a nosedive, I think their situation will be, at best, grim.

Finally, for you to say "Much like Tesla, future specs are placeholders" is disingenuous. First, as Elon was recently quite clear about WRT the Cybertruck, Tesla generally plans to exceed the teased specs. And I think they've earned our trust there. Did they really jump bump the Model 3 range to 350 miles? Whereas I don't recall a lot of (OK, any) non-Tesla EVs where the actual EPA range was a positive surprise. (Taycan? eTron? Polestar 2? Bueller?) And second, I'm not even talking about "specs." I am willing to give GM the benefit of the doubt that the Hummer will have 350 miles of range and 0-60 in 3s and whatever approach angle and blah blah blah. I'm talking about PRODUCTS. Let's look at GM's 10 best-selling vehicles (2019, total of 2M units across the top 10) and their starting prices, and you can tell me where GM has a competitive offering with ANY ANNOUNCED SPECS at all in their EV lineup:

#1/#3/#6: pickups, $35K, $30K, $26K starting prices, respectively
#2/#9: compact crossover, $24K/$25K starting prices
#4/#10: 3-row SUV, $30K/$49K starting price
#5: sedan, $22K starting price
#7/#8: subcompact SUVs, $22K/$23K starting prices

Note that only one of those has a starting price over $35K, and it's still under $50K. Granted, people buy more expensive versions of these cars -- I think I've heard the average selling price in the US is on the order of $40K, though at a quick look the published numbers are all over the place.

So, that's cool. Where's the GM EV (other than the Bolt, which has already proven to be unprofitable AND unpopular), that will address any of those top 10 markets, with a price approaching $40K (if not near the actual starting prices of 9 out of the 10 of those models)?

And if there's not even a plan announced for that, how is GM going to turn that around between the $80K Hummer/$60K Lyriq (which are $31K/$38K more than the corresponding top 10 base models) in 2023 and disaster in 2030? And not just put the offerings out there, but make them profitable enough to fill in for even 1M units of lost sales off that top 10 list?

2025. I think you may be optimistic in VW being able to source the cells they need to meet demand for their BEVs. In the US VW is depending on SK Innovation building their GFs. The US government may rule they stole LG Chem IP and not allow them to sell their cells in the USA. In Europe VW is in part depending on North Volt going from startup to mass production.

GM has a very good business in China. They make almost as much money there selling their Buick Minivan as they make selling pickups here. A Chinese GM BEV Minivan is coming. Of course selling BEVs in China counts. It counts to the bottom line and global decarbonization.

I think you are way too optimistic about ICE pickups and body on frame SUV taking a sales nosedive anytime soon. Many people still have landlines phones or oil heaters even though they are technologically inferior. The rest of the ICEv don't contribute to profit. It doesn't matter if they don't sell money losers. I think it is far more likely Ford fails and GM takes most of their profitable ICE truck business. Ditto FCA or Stellantis in America.

I think your whole thesis is disingenuous. That anything that is not Tesla sucks. Any automotive CEO not named Musk is a moron. That unions and dealers can't react to reality. Unifor in Canada certainly is adjusting. The are demanding a strategy for the BEV transition. Half the GMC dealers willing to invest $200k plus to service Hummer EV and any future EVs are certainly adjusting. That is far different than investing $200k when you know GM is only making a compliance Volt with low margins in low volume.

GM has announced their Ultium EVs will be profitable from Day 1. Scale lowers cost. You start with $112k go down to $100k, then $90k and so on. Just like Tesla started with Roadster, Model S then Model 3.

GM has showed investors and EV journalist dozens of EV models. These aren't all $60k plus vehicles. Or $50k plus vehicles. They will be selling BEV Chevys. GM isn't planning on becoming Lucid or the electric Mercedes Benz. EV journalist just couldn't take pictures or release specific details. Once Ohio is producing ~15 GWh of batteries I think $30k compact crossover BEV should be as profitable as a RAV4 is today.

Toyota in the 90s and 00's didn't take 100% marketshare or drive everyone else into bankruptcy.
Some people will buy an inferior car versus the consensus "best car out there" in order to just be different. Other than possibly VW, I think GM has the best chance of anyone else.

I have no doubt Tesla will be the BEV leader. But there will be others. If for no other reason that Governments will demand competition.

 

[DanCar]

... Because Elon is not stubborn and changes philosophy all the time. ...

I would say he is stubborn, except when he is faced with real competition.

 

[ammulder]

I think your whole thesis is disingenuous. That anything that is not Tesla sucks.

To be clear, I don't think the Hummer or Lyriq (or Taycan or etc.) "suck" -- I just don't think they'll sell in the numbers needed for GM to make this kind of transition. I wouldn't say the Bolt sucks either ("Look, I have a friend with a Bolt"). And as I said, I don't know much at all about GM in China, though if they had super BEV capabilities in China, it would be odd that we hadn't seen that manifest in their US operations.

Anyway, perhaps this would be a good time to agree to disagree? I expect the next few years will be instructive, one way or the other.

 

[wdolson]

Does sound strange... and it's not even that impressive. It's 200 miles.

260 miles EPA range seems to be the Rubicon most of the industry is struggling to cross. There are a few cars coming to market with better than 260 miles range this year, but only Tesla is doing much better than that.

It really does demonstrate how far ahead Tesla is on tech and efficiency.

If in the future cities start banning ICE vehicles on their streets, this would be a cool option: electric conversion in 4 hours:
Transition One Will Convert Your Old Gasmobile To Electric Power In About 4 Hours

It would be foolish for any government to ban ICE until there are enough cells on the market to convert enough cars to make a difference. Banning ICE when there aren't enough batteries out there to electrify the world's car fleet would probably lead to a lot of politicians losing their jobs and economic turmoil.

Though perfecting conversion tech now is a good idea.

 

[mikevbf]

It would be foolish for any government to ban ICE until there are enough cells on the market to convert enough cars to make a difference. Banning ICE when there aren't enough batteries out there to electrify the world's car fleet would probably lead to a lot of politicians losing their jobs and economic turmoil.

Good point about cells, but there still are a lot of places planning in the future to ban ICE vehicles and ones already making it really difficult for ICE vehicles. Plus once electric cars drive themselves, it will take a lot less electric vehicles to accomplish a reasonable level of transportation convenience. But at that point you would probably no longer own a car to convert anyway.

Phase-out of fossil fuel vehicles - Wikipedia
Low-emission zone - Wikipedia
low emission zones – Sustainable Transport in China

 

[wdolson]

Good point about cells, but there still are a lot of places planning in the future to ban ICE vehicles and ones already making it really difficult for ICE vehicles. Plus once electric cars drive themselves, it will take a lot less electric vehicles to accomplish a reasonable level of transportation convenience. But at that point you would probably no longer own a car to convert anyway.

Phase-out of fossil fuel vehicles - Wikipedia
Low-emission zone - Wikipedia
low emission zones – Sustainable Transport in China

The places that have announced banning of ICE may have to soften that as the deadline nears. A lot will depend on how widely available EVs will be at that point. I have seen that some car makers are planning on PHEVs to allow their cars to drive on electric in urban cores where ICE will not be allowed, but then to switch to ICE outside the core. That would make the battery supply stretch further, but they won't have much range on just batteries either.

I'm also not as convinced that autonomous robotaxis are going to be the next big thing. There has been a lot of talk that younger people don't want to own cars and Millennials were much later to get driver's licenses than Boomers or Gen X and many were not that thrilled with the whole idea of driving. But as they have started having kids and moved to the suburbs, they are now driving a lot more. Additionally Gen Z are back to wanting cars like their grandparents at their age.

In an urban area where owning a car may be a hassle and most people get around by public transport now, robo taxis might replace trips on public transport. But outside of urban cores I don't see it really taking off much. Uber and Lyft have done OK in closer in suburbs, but out here in the outer suburbs I never see ride sharing vehicles.

When Tesla started giving people Uber's instead of loaners I figured out how much it would cost them to send me home in an Uber. It was something like $70 and to get picked up I'd probably have to wait an hour. A robotaxi would be cheaper, but probably not much faster.

I don't have kids, but I watch my neighbors with kids and the ones with small kids have the backseats of their cars permanently set up for car seats and all the gear to keep the kids entertained on the road. To get their kids in a different car every time they went anywhere would be a nightmare.

Having a car is also far more convenient than any kind of other transport. Especially if you live a little further out from an urban center. Because of the pandemic we will probably see more jobs move home permanently or semi-permanently, which could allow families to get rid of a car, but outside of urban cores I doubt the reduction in car ownership is going to be all that extreme. Especially in the US.

 

[samppa]

The places that have announced banning of ICE may have to soften that as the deadline nears. A lot will depend on how widely available EVs will be at that point. I have seen that some car makers are planning on PHEVs to allow their cars to drive on electric in urban cores where ICE will not be allowed, but then to switch to ICE outside the core. That would make the battery supply stretch further, but they won't have much range on just batteries either.

I don't have kids, but I watch my neighbors with kids and the ones with small kids have the backseats of their cars permanently set up for car seats and all the gear to keep the kids entertained on the road. To get their kids in a different car every time they went anywhere would be a nightmare.

I have friends who have small kids, and don't have a car. When they need a ride, they can order a taxi that has a kids seat at the backseat. They just need to order it a bit before, like a couple hours. I don't know if uber provides this kind of service, but it's not that hard to implement. Many Teslataxis offer this, because they can fit the kids seat in the frunk when it's not used.
So it's not a nightmare, far from it.

 

[mikevbf]

@wdolson I tend to agree with you that outer suburbs and rural areas will be the last to have enough robotaxi density to make it convenient. But from an air quality perspective, when you look at the maps the benefit will be huge to have almost all electric robotaxis in urban and near suburbs. People have already got a taste of what it is like to have less air pollution in their cities from the pandemic. It will become more and more obvious we don't want ICE vehicles in our more densely populated centers and surrounds.

People traveling to these cities will park their personal cars at the outskirts and enjoy robotaxis that know exactly how to safely, cheaply, cleanly in a low stress manner transport people around the city. It will be so nice for visitors and people who live in the cities alike. People living in these cities can also own or share cars parked on the outskirts to travel to the country side. The amount of real-estate freed up in cities not needing all the space for parking will create an urban economic boom. People need to have more imagination envisioning a better future. It is this imagination that has guided me to Tesla and rewarded me handsomely for investing in the future I want for myself and my children.

Here is a nice illustration of how much better it will get with less ICE vehicles in urban polluted areas:
NASA Satellite Data Show 30% Air Pollution Drop over the Northeastern US – Climate Change: Vital Signs of the Planet

 

[Doggydogworld]

All Waymo vans have a pre-installed child seat in the 3rd row plus a moveable booster seat. That's easy to do in a large van, not so much in a sedan. I don't know their plan for the Jaguar i-Pace. I imagine they'll have a custom vehicle (e.g. Cruise Origin or Zoox whatever it's called) with seats that easily convert from child to adult by the time they hit 100k units.

Having a car is also far more convenient than any kind of other transport. Especially if you live a little further out from an urban center. Because of the pandemic we will probably see more jobs move home permanently or semi-permanently, which could allow families to get rid of a car, but outside of urban cores I doubt the reduction in car ownership is going to be all that extreme. Especially in the US.

I don't think Robotaxis will convince suburban families to go carless. But I could see a lot of families dropping from 2-4 cars down to 1-2. I think that's Waymo's plan, and I think that's one reason they focused so much on Chandler, AZ. The downtown/airport Uber market isn't big enough for them, they need to also get the suburbs.

Waymo's business model doesn't really work unless they can substitute for car ownership. Americans spend something like $5k per car per year. That's a $1T+ market. Most of that cost is fixed, e.g. monthly payment, insurance, registration, parking, etc. That's how you get to 60 cents/mile or whatever. Purely variable costs like fuel and repairs are in the 10-15 cent/mile range. You can't get ROI on a fleet at 15 cents/mile, no matter what Tony Seba says.

 

[wdolson]

@wdolson I tend to agree with you that outer suburbs and rural areas will be the last to have enough robotaxi density to make it convenient. But from an air quality perspective, when you look at the maps the benefit will be huge to have almost all electric robotaxis in urban and near suburbs. People have already got a taste of what it is like to have less air pollution in their cities from the pandemic. It will become more and more obvious we don't want ICE vehicles in our more densely populated centers and surrounds.

People traveling to these cities will park their personal cars at the outskirts and enjoy robotaxis that know exactly how to safely, cheaply, cleanly in a low stress manner transport people around the city. It will be so nice for visitors and people who live in the cities alike. People living in these cities can also own or share cars parked on the outskirts to travel to the country side. The amount of real-estate freed up in cities not needing all the space for parking will create an urban economic boom. People need to have more imagination envisioning a better future. It is this imagination that has guided me to Tesla and rewarded me handsomely for investing in the future I want for myself and my children.

Here is a nice illustration of how much better it will get with less ICE vehicles in urban polluted areas:
NASA Satellite Data Show 30% Air Pollution Drop over the Northeastern US – Climate Change: Vital Signs of the Planet

The trend since COVID hit is commercial real estate has been suffering. Companies are discovering that having white collar workers working remote works better in many cases and workers have more time because they aren't stuck in their cars for a couple of hours a day. There are some office jobs that require someone to be there in the office, but quite a few don't need someone there all the time.

In California it's causing a housing boom in places like Bakersfield, as Los Angeles based businesses realize workers don't need to commute, people are moving further out because they can get more house for their money. A 2 hour drive to work is livable when you only need to do it a few times a year.

In the future I think downtowns will become ghost towns as the suburbs become an even bigger thing. Office space in tall buildings will probably be converted to condos for single people and childless couples who want to be within walking distance of downtown activities, but people will leave the city when they have kids.

Less desirable buildings will be abandoned and eventually torn down. In cities where the entertainment is not near downtown might see their former business core go downhill like Detroit's factories did.

Inner cities today have a lot of ethnic poor people and they will probably stay in decayed inner cities, but I suspect robotaxis probably won't serve those areas very well. The poor always get screwed over.

The suburbs might still have high car ownership, but they will be more and more electric as time goes on. The subrubanites will electrify before the poor do. The place where ICE will remain in service will be the poorer areas where people can only afford older cars nobody else wants and are underserved by other forms of transport.

Electric cars are the wave of the future because they are both cheaper to run but also better than ICE in almost every way.

All Waymo vans have a pre-installed child seat in the 3rd row plus a moveable booster seat. That's easy to do in a large van, not so much in a sedan. I don't know their plan for the Jaguar i-Pace. I imagine they'll have a custom vehicle (e.g. Cruise Origin or Zoox whatever it's called) with seats that easily convert from child to adult by the time they hit 100k units.

I don't think Robotaxis will convince suburban families to go carless. But I could see a lot of families dropping from 2-4 cars down to 1-2. I think that's Waymo's plan, and I think that's one reason they focused so much on Chandler, AZ. The downtown/airport Uber market isn't big enough for them, they need to also get the suburbs.

Waymo's business model doesn't really work unless they can substitute for car ownership. Americans spend something like $5k per car per year. That's a $1T+ market. Most of that cost is fixed, e.g. monthly payment, insurance, registration, parking, etc. That's how you get to 60 cents/mile or whatever. Purely variable costs like fuel and repairs are in the 10-15 cent/mile range. You can't get ROI on a fleet at 15 cents/mile, no matter what Tony Seba says.

I've seen Tony Seba's work and that of other people predicting future trends. The behavior of corporate and government purchasing can be predicted because they follow cost much more than consumers. They will almost always go with the option that results in the lowest costs over the long haul.

Consumers aren't that way. Look at the fashion industry. People spend thousands on something that should cost less than $50 and many more people want those thousand dollar items. It's driving a big counterfeit market. If the most expensive purse on the market cost less than $100 and there were no strongly desired name brands, there would be no counterfeit market.

Same thing with cars. From a cost point of view a Mercedes is a stupid purchase and a Lambroghini is completely insane. But there is a market for them because people will spend more money for something nicer. Sometimes insane money. If consumers were all rational buyers, all Americans driving Mercedes S class today would be driving a Chevy or Ford that fits their basic needs and nothing more.

When the car was evolving, most American cities had decent public transit systems that most people used. But as people got the extra money to afford a car, they bought one. Part of it was because it was more prestigious to be able to afford a car, but it was also more practical. Driving from point A to B was quicker than going down to the bus or trolley stop and waiting for the transport to come, then transfer a few times and finally get to your destination.

Another thing happened as people got their own cars. They could customize them the way they wanted. In some ways that was a way to show off their interests, humor, style to others, but it also meant a car they owned could be made to fit their needs in ways something that wasn't theirs could never do.

Some people's cars become rolling skips with fast food packaging all over the backseat, while others become offices on wheels, and still others become ultra organized storage mobiles. One of my neighbors is kind of OCD and he has tricked out his Toyota 4Runner with cabinets in the back where he can store anything he might need. He installed an aftermarket roof rack with a ladder mounted to the back hatch as well as a full sized spare on the back hatch.

One thing people like about having their own place is they aren't traveling in someone else's germnasium. Their car may not be pristine or even all that sanitary, but it's their space with their crud and not someone else's.

I do think that people will own fewer cars, but I don't think that car ownership is going to go away to the degree that people like Tony Seba think it will.

 

[AudubonB]

Has anyone figured out this marketing campaign by VW yet? Just received this email marketing for the ID.4, and the "Beware" tagline just baffles me:

View attachment 601744

I got it!

But it took me a while.....

Beyond
Even

apor

are

 

[replicant]

In the future I think downtowns will become ghost towns as the suburbs become an even bigger thing.

This worries me. A lot.

We're having this discussion because we're taking climate change seriously. Tesla is becoming a giant because the world is finally switching the energy source of terrestrial transportation from fossil fuels to renewable. We can finally envision a world where mankind can move around without destroying its habitat.

But we're probably making a huge mistake by only thinking about the air part of the environment. Just as IPCC's findings gain acceptance, we're ignoring the catastrophe that IPBES has been warning us about for a while: the global ecological collapse caused by the degradation and over-exploitation of natural resources and the degradation, fragmentation and loss of natural habitat for the living ecosystems that threatens mankind's chances of survival: https://ipbes.net/sites/default/fil...ssessment_report_summary_for_policymakers.pdf

If we take advantage of EV to leave the cities for the suburbs, we're ****ed.

 

[scaesare]

Some would say Tesla dont really make a profit on selling EVs due to their profit being made with EV credits.
Obviously EV credits are part of Tesla's business model so its kind of a mute point.

"moot"

 

[Rarity]

This worries me. A lot.
...
If we take advantage of EV to leave the cities for the suburbs, we're ****ed.

I don't know how worried you should be. New York and San Francisco are taking a big hit. But other cities that are less expensive have not had such drastic falls.

We will see how this all plays out. Important to keep in mind that in the US already, the city cores have only a small fraction of the population of the suburbs. Maybe we will see just redistribution among the various parts of the suburbs.