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Tesla BEV Competition Developments

Knightshade

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During a PANDEMIC GM is having a trouble building trucks because of chip and other parts shortages. Pandemic required rules etc.

Weird... Tesla sales during the pandemic nearly doubled.

GMs are down ~20 percent.


"competition"


Tesla has a privileged relationship with the Shanghai government which has protected them from many of the pandemic effects.

How does that explain Teslas record sales everywhere else compared to GMs declining sales everywhere else?


Tesla is smaller and more nimble. Being able to substitute a variety of chips and write firmware on the fly. As a result Tesla production has been the least impacted from the pandemic.

This doesn't inform us about GM prospects 5-30 years into the future.

It really does.

On many levels.

dataonething.gif
 
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RobStark

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Weird... Tesla sales during the pandemic nearly doubled.

GMs are down ~20 percent.


"competition"




How does that explain Teslas record sales everywhere else compared to GMs declining sales everywhere else?




It really does.

On many levels.

Already explained.

GM is production constrained not demand constrained for North American trucks and China. Especially GM China's money maker the Buick GL8. It is a sensible strategy as GM transitions to a BEV automaker to stop selling unprofitable compliance ICEv only made to satisfy CAFE and Chinese equivalent.

Tesla is increasing sales from a small base. It has been better able to navigate pandemic problems. This doesn't inform us about GM performance after the pandemic.

GM has sales decreases from a very large base during a pandemic.
 
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Knightshade

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Already explained.

GM is production constrained not demand constrained for North American trucks and China.

So they can't manage to keep up production rates on stuff they've already known how to make for 100 years.

But they're somehow gonna magically produce a worthwhile number of entirely new tech vehicles they know relatively little about, and rely even more heavily on 3rd party suppliers for.

I don't think that "explanation" helps your argument much.

Tesla is increasing sales from a small base. It has been better able to navigate pandemic problems. This doesn't inform us about GM performance after the pandemic.


It informs us about their ability to navigate anything other than BAU. Badly.

And nothing about the next 5-10 years of the EV transition is gonna be BAU.


Were you also thinking Nokia would be just fine when the iPhone came out? I mean they had a HUGE base! they can TOTALLY adapt!

See also- Blackberry!
 
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Doggydogworld

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Is GM getting that huge markup profit? Are they making a profit because of dealer markups or is it because they stopped offering discounts?

I would really like to know what GM's cut is on that MSRP markup.
In normal times there are all kinds of incentives, dealer holdbacks, volume discounts, etc. When supply tightens the OEM can slash those to zero, increasing net wholesale price. The OEM can also adjust the wholesale price itself upward, though this is pretty rare.

Tesla will have nearly doubled vehicles built since last year. And it's likely they'll see another 50-100% growth in units next year too (and ~50% CAGR every year through at least 2030).
So 35 million cars in 2030? Sounds legit....

Weird... Tesla sales during the pandemic nearly doubled.
GMs are down ~20 percent.
Tesla ordered at least twice as many parts for 2021 as they used in 2021 to supply the ramp in Shanghai plus a little growth in Fremont and Berlin startup. If you increase orders 2.5x and only receive 80% of them you can still grow 2x. Tesla merely slow-rolled the Berlin factory a little and used their limited part supply elsewhere.

GM ordered 1x as many parts as prior years. Receiving only 80% of them means a 20% drop in sales.

Tesla can also outbid the legacy OEMs for highly constrained parts because they have customers willing to pay 5-20k more for a car with the T badge than they would for the same car with any other badge. It's a huge advantage.
 
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ammulder

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So, @RobStark and @Doggydogworld … in all seriousness, how many EVs should we expect GM to deliver (to dealers, but whatever) in the US in calendar year 2022?

I have the impression that it will be 10k or fewer Hummers and 10k or fewer Lyriqs and a larger but not very large number of Bolts? But that could be wrong; I don’t have any specifics.
 
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RobStark

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Neither GM nor Ford are in a death match with Tesla. Where 2 companies enter the Arena and only 1 can leave.

Tesla's success does not require the annihilation of GM or Ford. Tesla can be much better at software than GM or thermal management engineering than Ford without resulting in the bankruptcy of either GM or Ford. Toyota is the low cost ICEv producer combined with the best reliability. It is also the most capital efficient. It has 10% Global market share. Not 50% or 100%.

The best prepared legacy OEM for the Transition is VW,GM, then either Ford or Stellantis. It takes a legacy OEM roughly five years to prepare to mass manufacture a new vehicle. Maybe 3 years for a low volume vehicle like the Mach-e. The numbers you see today are based on plans from 5-10 years ago. Taking shots at plans from 5-10 years ago and not what the OEMs have told their investors the last 4 years is pot shots.

The legacy OEM at the front of the Guillotine line is BMW. Their demographic almost perfectly aligns with Tesla. Then it is the Japanese. Toyota, Nissan-Mitsubishi, Honda, Mazda, and Subaru. They refuse to plan to transition. Toyota is hoping for a home run in solid state battery tech or a grand slam in new hydrogen tech. My guess is eventually all the Japanese automakers combine into one company and mostly sell cars in Japan and low end cars in southeast Asia. Suzuki won't be able to hide forever selling low end ICEv in Japan and India.

Japanese automakers have roughly 40% US market share and 25% global market share. This perfectly aligns with my prediction for Tesla market share. Inside the US Tesla does best where Japanese automakers do best; on the East Coast but most especially on the West Coast. This is where Tesla will take most market share in the US. Then the Germans. Then to a lesser extent the Koreans. And then to an even lesser extent Detroit because it does best where Tesla does the worst. The Midwest and the South.

In China GM has less than 10% market share and is not a direct competitor to Tesla. GM's money maker here are pimped out executive minivans. Ford has tiny share here. In Europe Ford has 6% market and is not in a direct battle with Tesla either. Ford's money maker in Europe are Ford Transit commercial vehicles. And GM virtually has no presence in Europe. Tesla has much bigger pigs to slaughter than Chinese luxury minivans and cargo Vans in Europe.

Mercedes and Renault are also ahead of GM and Ford on the Guillotine line.
 

heltok

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Like Apple’s success didn’t require the annhilation of Nokia, Blackberry etc.

Even today without the massive disruption the companies are not thriving. With Tesla entering their markets they are quickly losing the profit in said market. And Tesla are quickly expanding. Sure right not it is not obvious, but once 1.5M Model Y/year are unleashed into the SUV segment expect a lot of companies to report decreasing earnings. Once Cybertrucks are flooding the pickup market expect more decreasing earnings. And then when Tesla floods the $25k segment expect the final nail in the coffin for these companies. It will not happen next year, but in 5 years the bleeding will start and in 10years I expect most of them to be anemic.

Even government subsidizes will not keep the zombie companies alive as customers are not stupid, they can tell the difference between an iPhone and a subsidizes Nokia.
 

RobStark

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BTW Hyudai Kia has some cool BEVs coming but no announced JV with battery makers.

I guess they are depending on Korean Bro's allocation from the Korean cell makers at Korean Bro's prices.

BTW II Cars aren't smart phones. GM is not Nokia. Ford is not Blackberry. Heavily regulated heavy manufacturing industry is not lightly regulated light manufacturing industry.

This is reasoning by analogy to the idiotic extreme.
 
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ammulder

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For starters, I don’t think any US citizen concerned about wealth gaps should truly wish the Big 3 to go out of business. Ideally, they’d adapt to the future… somehow. I’m OK if they play second fiddle to Tesla and others, but I wish they’d at least show up to the party.

Not in the Big 3, but VW has been putting real effort in. However their BEVs just don’t seem that good. Adequate, at best. Someone said the Tesla Semi has better acceleration than any ID model! Not sure whether they really struggle with software and performance or want to milk ICE more or what. They’re canning their head of China sales, but honestly, they didn’t give him that much to work with. Still, at least they have BEVs on the road.

Ford produced a great first effort serious EV in the Mach-e and has at least been upping the production plans again and again… even if they’re still press releases at this point. My biggest concern is that they may Osborne the ICE F-150 with the Lightning (”the best F-150 ever!”) before they can ramp their battery supply, and then they’ll be in a pickle. They may not be able to control the speed of the transition and it’s a knife edge to ride.

GM… I feel like they’d be doing well to sell 50k BEVs in the US next year across 3 models (4 models if the Bolt and Bolt EUV are both sold). Looking forward a bit more, their plan to produce 30+ models years before having reached 40% BEV share of total sales seems nutty — low volume of a lot of models doesn’t seem like a good way to either put their engineering talent to work (spread too thin) or capitalize on economies of scale. Low volume, spread too thin, with politicians patting them on the back… it just doesn’t seem like a serious plan. I feel like they’re just going to wait until it’s economical to make long range giant semi-luxury electric SUVs for $79k and then go balls to the wall… but I’m not convinced their current path is going to get them there, like, ever.

Stellantis… I just have no idea what they’re doing.
 
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heltok

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BTW II Cars aren't smart phones. GM is not Nokia. Ford is not Blackberry. Heavily regulated heavy manufacturing industry is not lightly regulated light manufacturing industry.
Even if it is heavily regulated, clearly it is open to competition. And we saw what happened with mini mills in the rebar industry etc. Once a new way of doing things comes that is cheaper and better it replaces the old and the old often struggle to adapt. I doubt Ford/GM will catch up with Tesla’s resource management system, agile manufacturing, deep learning in manufacturing etc. My strong conviction is that Tesla will be able to sell cars at 20-30% margins at prices that competition will struggle to reach with positive margins. Direct sales, vertical integration, software, larger scale of batteries, insurance, lack of ads etc. This is probably enough already. They just need to scale, then lower prices and suddenly there is no way for the competition to make profitable cars in any way their organization supports. They are structurally unprofitable in competition with a fully scaled Tesla and Chinese competition.
 

wdolson

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Anyone can crash and burn.

Kodak is not analogous to GM or Ford. But to ExxonMobil. Kodak sold film primarily not cameras. It is like XOM trying to shift to wind and solar energy.

Barriers to entry in highly regulated heavy industry is much higher than unregulated light industry.

Musk believes Tesla will end up with 25% global automotive share. I agree. Not 50% like some TSLA hyperbulls believe.

This gives room for others to make it. It will be just as difficult for legacy OEMs to transition as it will for well capitalized startups to cross the chasm. Some will make but most won't. All the Japanese OEMs look like laggards. Nissan blew an early lead and goodwill among BEV buyers.

Kodak's core business was not film, it was film processing supplies. The fact that digital required virtually none of those supplies is what ultimately drove them to bankruptcy. My parents had a Kodak wholesale dealership. They moved tons of film processing supplies every year and film was about 10-20% of their business.

Similarly, a big part of the automotive business is car service. The car companies themselves don't make their core profit from their parts side of their business, but service is a core part of their dealership networks' business model. The car makers are in a symbiotic relationship with the dealers. If the dealers end up losing money over the switch to EVs, their business will be in trouble too.

I think a number of European car makers have a chance to make it. VW being head of that pack, but Volvo has spun off Polestar and European governments are pushing harder for EV adoption than just about anywhere else in the world.

Though I do think if Stellantis survives it only does so without some divisions including Chrysler.

I think GM and Ford have a better chance of making it, but they will probably have to downsize to do it.

Ultimately there are many car makers with the Chinese learning how to make cars and coming up fast. If Tesla ends up with more than 10% of the world market share it will be a major success IMO. If they make it to 25% they will be the dominant car maker in the world for the next century.

I think it could be possible that once the shake out is done the mix of car makers building the bulk of cars may not be any name someone would have heard of 20 years ago. The mix might be some Chinese car makers, Tesla, and some other EV start ups from around the world with the traditional car makers that survive as mostly "also rans".

House of Muscle going Electric


As I said the other day, Chrysler is standing on the start line claiming victory when everyone else is partway down the track.

You sure that's GM or their dealers? Is GM getting that huge markup profit? Are they making a profit because of dealer markups or is it because they stopped offering discounts?

I would really like to know what GM's cut is on that MSRP markup.

How much GM makes per truck sold is a separate thing from @RobStark 's point. GM makes trucks and demand at the consumer level is high enough that all they make sells. The fact that they are rarely discounted is an indication of the demand.

If some consumer product is popular enough that people are paying more than MSRP at the retail outlet, the manufacturer is still making the same amount from wholesale sales, but the store shelves will be empty despite high prices because consumers want it.

GM trucks are popular with vehicle buyers. A large percentage of those sales are commercial and government sales, but quite a few are the general public too. Pickup trucks are extremely popular in the US and truck-like vehicles too. This popularity has been killing the sedan, which was the most common car in the US.
 

Knightshade

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So 35 million cars in 2030? Sounds legit....

20 million is the stated goal- they plan to AVERAGE 50% CAGR annually.

Which, BTW, they have every year since they began mass producing cars- something some "financial/industry experts" claimed was impossible back in 2014, decrying a target of 500k vehicles for 2020 insane.

Some years will be higher (this year is nearer 100% than 50%) others will be lower- 50% CAGR is the average.





Neither GM nor Ford are in a death match with Tesla.

No, they're in a death match against time and disruption.

They started to react way too late, and are still doing so way too slowly-- though less slowly than some others, which is the only thing they have going for em at this point.

. Toyota is the low cost ICEv producer combined with the best reliability. It is also the most capital efficient. It has 10% Global market share. Not 50% or 100%.

Yes- they're a leader in a fully developed, nearing end of its life, market.

When the industry gets heavily disrupted you typically end up with someone with a much bigger share for years- see Ford as we moved from horses to cars for example--- and relatively few in the old industry survive into the next.

Some will- some won't.

Toyota still thinks hydrogen is gonna be a thing and that BEVs aren't the future. That's not a good approach for being among those who stick around.

The best prepared legacy OEM for the Transition is VW,GM, then either Ford or Stellantis


That's probably, sadly, true.


. It takes a legacy OEM roughly five years to prepare to mass manufacture a new vehicle. Maybe 3 years for a low volume vehicle like the Mach-e. The numbers you see today are based on plans from 5-10 years ago. Taking shots at plans from 5-10 years ago and not what the OEMs have told their investors the last 4 years is pot shots.

No, it's pointing out you can't survive as a business using 10 year old plans during a massive disruption of your industry.


BTW remember when you insisted GM was "already" making HUMMERs?

story dated yesterday said:
GM hasn’t started production on customer-ready Hummers yet, but those should start rolling off the line within the next few days

So when I mentioned GM was currently producing zero EVs- that was accurate.

In a few days they'll begin to produce a tiny handful of >100k ones. Maybe sometime next year they'll produce another one (if/when they restart Bolt, or start on the Lyriq). Still pretty damn distance from their claim of 22 new EVs by 2023.
 
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Doggydogworld

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So, @RobStark and @Doggydogworld … in all seriousness, how many EVs should we expect GM to deliver (to dealers, but whatever) in the US in calendar year 2022?

I have the impression that it will be 10k or fewer Hummers and 10k or fewer Lyriqs and a larger but not very large number of Bolts? But that could be wrong; I don’t have any specifics.
I don't expect GM to sell any more EVs in 2022 than required to meet ZEV/GHG. They exited Europe and thus can't leverage the forced demand there to achieve scale. It's a similar story in China, where the Hongguang Mini gives them all the NEV credits they need.

Hummer H2 peaked at a little over 30k/year. I could see the EV hitting that, but not the initial retrofit design. I don't see much demand for Lyriq. Cadillac customers aren't exactly forward-looking and their CUV/SUV models sell in low volume. Lyriq costs more than even the bigger XT6.

Some years will be higher (this year is nearer 100% than 50%) others will be lower- 50% CAGR is the average.
50% CAGR is 35m cars in 2030. That's simple math, so stop with the word games.

Tesla says 50% CAGR "over a multi-year horizon", not through 2030.

BTW remember when you insisted GM was "already" making HUMMERs?
They've been making them. The first couple hundred vehicles off the line go to employees who use them as daily drivers and provide feedback. Tesla (and apparently Rivian) count these as sales. GM does not.
 

ZsoZso

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50% CAGR is 35m cars in 2030. That's simple math, so stop with the word games.

Tesla says 50% CAGR "over a multi-year horizon", not through 2030.
Last full year known is 2020 at ~500k, if you multiply that 1.5^10 you get 28.83 million for 2030.
That is what simple math says, how do you get 35m ?
 

mongo

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Pretty sure Elon’s comments about 50% annual growth didn’t start with 2021 as the base year
"Well, Tell me what you want, what you really really want"

The question was "That is what simple math says, how do you get 35m ?", which I read as: 'how to get to 35m with simple math'. That's what I answered, 50% growth for one less year starting this year. Whether that math matches the scenario is a HoaDC.

Want to use 2020?
Q4 2020 * 10 years of 50% growth = 41.5m annualized
Q3 2020 * 10 years of 50% growth = 33.4m annualized (sans one quarter)
Actual data from 2021?
9 years of 50% growth from Q3 2021 is 36.6m annualized.

If being particular (not just simple math), the question need to be qualified: actual production in 2030, annualized production rate as of Q4 2030 (basically an extra year of growth), installed capacity as of the end of 2030 (extra year +10 to 30%). Setting the target as annualized capacity in Q4 2030 one could say the rate is 28m * 35% = 38m. Where 35 is 50% ^ (1/4) ^ (3), or three quarters of a 50% annual growth year.

2021 is ahead of the 50% rate without either of the two new factories online. Nor semi, Cybertruck, Roadster, Boring variants while in a pandemic with part shortages. If 2020 is what you want to use a basis, 35m is only 25% more than the 28m given. Over 10 years, that's an additional compounded 2.25% per year growth rate.

As to what Elon stated, it was 30 million EVs across all manufacturers in 2030 [by 2027, thanks @ammulder ] With Tesla at 20m before then [2030], if things go well. From the 2020 number, thst is basically a 45% growth rate. Caveat, on an exponential function, small shifts in time make a huge difference.

Tldr; simple math isn't simple?
 
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ammulder

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As to what Elon stated, it was 30 million EVs across all manufacturers in 2030. With Tesla at 20m before then, if things go well.

Wait, in the Twitter post you show he said 30M across all manufacturers is possible in 2025! (!!) And “for sure” by 2027. Sadly, it may be Tesla and the Chinese getting us there.
 
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wdolson

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New video from Munro on OEM competition:


Excellent analysis. My thinking has been similar to Sandy's for about 5 years now. One thing he didn't toss out there that I think could happen is the government might force mergers between viable car companies and the dying ones like they did with the banks and financial companies during the financial crisis. Elon would be livid if Tesla was forced to merge with GM or Ford.
 

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