Tesla BEV Competition Developments

[RobStark]

"Production at Ultium’s $2.3 billion manufacturing plant in Lordstown is scheduled to begin in less than three weeks. Capacity will ramp up as demand for electric vehicles increases."

Ultium Cells Receives $2.5B Department of Energy Loan Commitment

The U.S. Department of Energy’s Loan Programs Office announced today a conditional commitment to Ultium Cells LLC for a $2.5 billion loan.

businessjournaldaily.com

 

[Knightshade]

Holy cow, I guess we can add "getting DOE loans" to the long list of things GM is 10+ years late on!

 

[30seconds]

That is not what it is looking like on the ground. Tesla makes healthy profits. Rivian does not.

Ford said they where profitable with Mach-e until recent commodity price increases. Given Mach-e and Lightning demand they have the ability to raise prices.

The legacy automakers have large amounts of unprofitable ICEv sales. Essentially compliance ICEv. GM didn't make money on Cruz or Malibu nor Ford on Fusion or Focus. But GM will be profitable on Lyriq,Blazer EV, Equinox EV, and Silverado EV. Ford can be profitable on Lightning based on which trim levels it choses to make and same with Mach-e. Or they could raise prices. In short Legacy OEMs can replace unprofitable compliance ICEv with profitable premium BEV. And remain CARB CAFE compliant. And equivalent in Europe and China.

I have read Honda loses money on Civic and breaks even on Accord. They start making big money on Pilot, Odyssey and Acura models.

Ford carefully worded their comments about MachE profitability. Seemed to say that if you ignored all the R&D costs it was profitable

“Hackett specified that the car’s cost of production will be lower than the revenue gained from its sale (“contribution margin”) right from the beginning. The vehicle line will still have to cover the initial cost of R&D before it becomes “profitable” for the company, but this is true of any vehicle line.”

Ford Mustang Mach E will be immediately profitable, says Ford CEO

Ford’s newly revealed Mustang Mach E will start producing profit “on vehicle number one,” said Ford CEO Jim Hackett in...

electrek.co

That’s a very very different place to be than Tesla or even the way Rivan would calculate profit and loss.

I guess we shall see who really gets to EV profitability- legacy or non Tesla EV dedicated.

 

[RobStark]

Ford carefully worded their comments about MachE profitability. Seemed to say that if you ignored all the R&D costs it was profitable

“Hackett specified that the car’s cost of production will be lower than the revenue gained from its sale (“contribution margin”) right from the beginning. The vehicle line will still have to cover the initial cost of R&D before it becomes “profitable” for the company, but this is true of any vehicle line.”

Ford Mustang Mach E will be immediately profitable, says Ford CEO

Ford’s newly revealed Mustang Mach E will start producing profit “on vehicle number one,” said Ford CEO Jim Hackett in...

electrek.co

That’s a very very different place to be than Tesla or even the way Rivan would calculate profit and loss.

I guess we shall see who really gets to EV profitability- legacy or non Tesla EV dedicated.

Did you expect Mach-e profits to pay for all developmental cost from day 1?

Accounting experts here keep saying cost of labor and materials is below price of trucks for Rivian.

In 2021 Ford record net income of $18B.

In 2022 Q1 Ford recorded a $3.1B loss including a loss of $5.4B on its Rivian 12% stake.

Ford reports Q2 2022 earnings Wed.

But clearly selling BEVs isn't killing their ICEv profits and overall profitability.

 

[MP3Mike]

Accounting experts here keep saying cost of labor and materials is below price of trucks for Rivian.

No accounting experts here keep telling you that the Rivian financial documents don't say that. That level of detail just isn't there. All it shows is that the cost of goods way exceeds what they are selling them for.

 

[DrChaos]

Don’t know if this is the right thread. What is the best small car EV? Something very small for cities, short drives and easy parking for my girlfriend. Like Fiat 500e, Mini Electric etc. Something that is most like a Tesla, but a lot smaller…

MIght not be quite small enough (it's very small for USA, small for Germany/Nordics, but not small for Spain or Italy), but BMW i3 should be fantastic for this. I drove one for 4 years.

 

[RobStark]

GM has secured enough battery minerals to make 1M BEVs per year by 2025.

 

[willow_hiller]

GM has secured enough battery minerals to make 1M BEVs per year by 2025.

And instead of making 1 million standard size battery packs, they've chosen to make 5 Hummer EVs with it instead.

 

[RobStark]

And instead of making 1 million standard size battery packs, they've chosen to make 5 Hummer EVs with it instead.

or 5 500 mile quad motor Cybertrucks? or 5 620 mile Tesla Roadsters with SpaceX package?

 

[AndrewZ]

Rivian's vehicles are so underpriced for what goes into them and this sentiment is echoed by the people over at Munro following their teardown and seeing the quality of materials and workmanship

@ 46:35. These things are built and finished like a Lamborghini or Ferrari but the price doesn't reflect that, early buyers got an even crazier deal. I'm personally not too concerned about the stock price or profits there, I care about value for the consumer and it's a'plenty with Rivian.

I also don't know how Hyundai / Kia / Genesis are making money on some of their models considering the apparent quality relative to price, the value is nuts. Some of the Genesis interiors are giving Bentley a run for their money at a fraction of the price, there's some kind of wizardry going on here.

 

[Knightshade]

FWIW I've heard similar things about how nice Rivians are. The problem is how do they stay in business long term like that? They're losing $ on every truck they deliver for at least the next couple years, and by the time they have filled all those loss-locked-in orders there'll be half a dozen other EV trucks on the market....

 

[AndrewZ]

FWIW I've heard similar things about how nice Rivians are. The problem is how do they stay in business long term like that? They're losing $ on every truck they deliver for at least the next couple years, and by the time they have filled all those loss-locked-in orders there'll be half a dozen other EV trucks on the market....

If I had to guess, I'd say Rivian is/was attempting a "loss leader" type of model. They want to offer an insane value up front to make an impression and bring people in, and then honing in the financials will come later

Pretty sure Hyundai / Kia / Genesis are doing something similar right now in trying to turn around their brand image, the value you get in some of the latest models is just so good

 

[Knightshade]

My impression was they grossly underestimated what it'd cost them to make these- hence why they tried jacking up the price for even pre-orders, but the backlash was so bad they had to reverse course and just eat huge losses for a couple of years as a result.

I've not seen anything suggesting Hyundai/Kia/Genesis are taking remotely similar losses on their EVs (AFAIK they just posted their best profits in like 7 years and cited both Genesis and the Ioniq 5 as among the reasons for it)- but if you've got a link or two showing otherwise would be quite interested in reading it.

 

[Gauss Guzzler]

Rivian is not trying to sell "Rivians", they are trying to sell "RIVIAN". They have a great product but no path or possibility of organically growing into a profitable company.

Meanwhile, Geely has no path toward entering the coveted 'merican truck market....

 

[JRP3]

A Munro intern takes a look at the Rivian Amazon van and discusses some of the shared components with the R1

 

[AndrewZ]

My impression was they grossly underestimated what it'd cost them to make these- hence why they tried jacking up the price for even pre-orders, but the backlash was so bad they had to reverse course and just eat huge losses for a couple of years as a result.

I've not seen anything suggesting Hyundai/Kia/Genesis are taking remotely similar losses on their EVs (AFAIK they just posted their best profits in like 7 years and cited both Genesis and the Ioniq 5 as among the reasons for it)- but if you've got a link or two showing otherwise would be quite interested in reading it.

Isn't the former similar to what Tesla did with the 2008 Roadsters? Right down to increasing prices for existing pre-orders through options that were previously included in the cost but were now adders, and they just straight up attributed it to increasing margins to stay viable.

Hyundai cited the new models including Genesis' boosting revenue, that doesn't necessarily mean it drove profits. From what I see, much of the increased profits seem to be attributed to international sales with favorable exchange rates to South Korea's won.

If Hyundai/Kia/Genesis were able to actually keep costs down for all these models that blow away reviewers with their apparent value relative to price, that's even more impressive. But I doubt that's the case, I'm sure they're not taking a loss anywhere near Rivian but these recent vehicles are too good for the price when compared to rivals.

 

[wws]

A Munro intern takes a look at the Rivian Amazon van and discusses some of the shared components with the R1...

Looks nice. I wonder if they are able to sell them to Amazon at > COGS?

I do wonder about that "125 mile" range. Winter time overhead from cabin heating might be brutal, as the doors will be opened/closed a lot. And AFAIK, Rivian hasn't implemented heat pump tech yet.

 

[Knightshade]

Isn't the former similar to what Tesla did with the 2008 Roadsters? Right down to increasing prices for existing pre-orders through options that were previously included in the cost but were now adders, and they just straight up attributed it to increasing margins to stay viable.

Before my time.

But the key difference as has been noted pretty widely-- Tesla didn't try scaling to mass production on a vehicle they were inherently losing money on.

Tesla launched the Model S in June of 2012.... and had positive gross margin on it by Q4 of the same year.

Tesla in its first quarter of mass production has a total of -8.7 million gross profit. In its second quarter of mass production it produced POSITIVE 23.8 million. And that # kept going up because they kept making more money MAKING cars.

Rivian had -383 million gross profit its first quarter of mass production- and -500 million dollars in its second quarter of mass production- and that negative # is going to keep getting larger as they make more money losing cars.

 

[Discoducky]

I've not seen anything suggesting Hyundai/Kia/Genesis are taking remotely similar losses on their EVs (AFAIK they just posted their best profits in like 7 years and cited both Genesis and the Ioniq 5 as among the reasons for it)- but if you've got a link or two showing otherwise would be quite interested in reading it.

Seems like they are doing well from Q2 earnings, but I don't see where they call out profits specifically for EVs. If they are making profit from EVs then good for them!

 

[Knightshade]

Seems like they are doing well from Q2 earnings, but I don't see where they call out profits specifically for EVs. If they are making profit from EVs then good for them!

Bloomberg - Are you a robot?

Hyundai Motor Co. posted its biggest profit in seven years, helped by sales of luxury Genesis cars and Ioniq 5 electric vehicles

Could just be shoddy bloomberg reporting of course