I have a friend who knows I'm a Tesla fan and routinely refers to Elon as "your boy" when bringing FUD to the discussion. He sent a link to an article titled "Cheap Electric Cars Won't Happen in America Until We Fix the Federal Tax Credit" which seemed to sort of offer the Hong Guang as an example of where the USA needs to be.
I responded with:
Well, cheap electric cars won't happen for a couple of years, and the most significant reason is the current level of battery production, not the tax credits. Though those will certainly help once manufacturers are actually producing vehicles. After batteries, the production volume is the next biggest problem. There is only one car company producing BEV cars in sufficient numbers to make an impact, and without tax credits they are sold out months in advance on the Model 3 and Model Y (the most affordable models) despite doubling production year over year. People are having no problems buying Teslas without tax credits as fast as they can build them.
The tax credit will help, however, it can only be applied when there is an actual vehicle produced to apply it to. The legacy OEMs need to step up to the plate if they want their share of that action.
My boy's company is tracking at or ahead of targets that were made public back in 2014 or 2016, when he stated how the company was projected to grow at a rate of 50% per year, and, that they would produce 500,000 cars in 2020. Everyone laughed at him, back then. (like they did when he said he would make reusable rockets) The laughter got kinda quiet at the end of last year when the target production reached the stated goal on time.
A couple of years back Tesla revealed plans to offer a $25K car in ~2023. It will likely be produced in China first, Texas will probably get another factory built in Austin for that model alone, as will Berlin. Each may have their own version of it designed by each country's local design teams. If the tax credit does come, this quite affordable $25K Tesla car will be a steal at $15K for a full-featured battery electric vehicle.
As opposed to the sub-standard go-kart like the Hong Guang in China. Anything like that car would fail on the US standards for safety. The top five spots at NHTSA for safest cars tested are currently held by Tesla models. Though there is the
Arcimoto, if bare-bones is what the US customer is wanting.
The $25K Tesla ($15K after the proposed tax credit) ought to be a perfect example of the "Cheap electric car" that will also
actually be produced in sufficient volume. This will happen with or without the tax credit.
As battery production increases, the cost of producing batteries is lowered (based upon
Wright's Law), Tesla have traditionally passed that savings on to the customer. If the rate of reduced battery cost continues to follow the trend over the past five years or so, by the time that car is in production it might be sold for $15K before tax credits. Imagine a $5K full-featured BEV after applying the tax credit. Would that be cheap enough?
This aspect of how Tesla operates is why so much FUD exists in the media regarding Tesla's profitability. They put all they can back into growing the company, rather than paying share holders dividends, purchasing advertising, etc.
Tesla’s mission is
To accelerate the world’s transition to sustainable energy.
Consider the numbers for a little perspective. Ford is offering ~50K of the Mach-E this year, and likely about the same volume of the F-150 Lightning next year or the year after. They don't have the batteries to build more than that. The plans they have for battery production won't come to fruition until 2024 or 2025. Plus, they are grappling with the fact that every BEV they sell takes away a sale of an ICE car that they are also producing. I don't envy the old guard OEMs, they are between a rock and a hard place. Search on "Innovator's Dilemma" for a good explanation of what these OEMs face.
Tesla has 1 Million orders for the Cybertruck on the books and may deliver that many over the next two or three years while "the competition" is delivering only tens of thousands of BEV pickups. Tesla are also very likely to (mind-boggingly) double their overall production and deliveries from 2020 in 2021. The Tesla Model Y is expected to become the best selling model on the planet in the next 12 to 18 months. Not just among EVs, the best selling model of all cars.
Tesla's long-term target has always been an unbelievable 50% production growth each year, which they have consistently met or exceeded for a decade. With Austin and Berlin coming online, 2M is very likely next year as they ramp production. Once they are up to speed, those three factories could put out 2M cars per year, each. Austin and Berlin factories will have their own battery production facility on site and each of the China, German, and Texas factories total cost to build was less than either GM or Ford's annual advertising budget, and takes about a year to do. The huge building in Austin has claimed status as the largest building in the USA. I think this means they beat out USAA HQ in San Antonio for that honor.
When will Ford and GM (and all the others) bring similar BEV production numbers to the table, so that there are more vehicles for the tax credit to be used on?
Cheap Electric Cars Won't Happen in America Until The Manufacturers Build Them.
