Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

The demise of the OEMs

This site may earn commission on affiliate links.
#543
adiggs said:
By 2030 it will be widely obvious that gas engine cars are more expensive, cost more to operate, perform less well, and provide less utility.
Click to expand...
Long range BEVs will still cost more than same size ICE in 2030. They'll just have a $6000 fuel tank instead of $12,000. They'll still require longer, more frequent stops on road trips and will still be a PIA for typical renters and condo dwellers.

China has forced NEV sales to almost 40%, but now seems content to grow ~2.5m/year. That's 100% around 2030, 2/3 BEV, 1/3 PHEV.

Europe forced EVs to 20% in 2021 and will step up to 30% in 2025. They used to be half BEV but new regs moved them to China's 2/3 mix. Look for another regulatory step up to ~50% in 2030.

US is way behind. 50% by 2030 is a stretch. ROW even further behind.
adiggs said:
What will those consumers that currently want 70M car units a year going to do, when their simplistic choices are (1) buy an EV when there aren't enough available to sell to everybody that wants one, or (2) keep the current car / buy a used gas car instead of buying EV, or (3) buy a new gas engine car?
Click to expand...
They'll buy ICE. Mostly HEV. $29k Camry Hybrid @ $900/year fuel cost vs. 39k Model 3 @ $600/year.
 
  • Like
Reactions: CarlS, cwerdna and EVCollies
#544
adiggs said:
www.statista.com

Global car sales 2019-2023 | Statista

Global car sales fluctuated over the past years amid disruptions in the industry. In 2023, car sales worldwide grew past pre-pandemic levels.
www.statista.com www.statista.com
For round numbers can we agree that the world wide car market is 70m units?
Click to expand...

Close enough for the discussion at least, sure


adiggs said:
From the point of view that the world has been demanding 70M cars a year, and has been doing so for a long time, it seems like minimum future demand will continue to be 70M. I can think of reasons for it to grow and for it to shrink - none of which are our point here today. From this point of view I am 100% in agreement with you that EV units will not have reached 70M by 2030. That does not mean that meaningful numbers of ICEV will be purchased new in 2030.
Click to expand...

I think going from "~0 new ICEV" to "no meaningful number" might be a bit of a goalpost move? What # is meaningful?




adiggs said:
There are at least 2 additional big factors (that I can think of) that will have a major impact on the size of the auto market in 2030 and the mix of gas cars to EVs that will be sold (I'm ignoring robo-taxi / fully autonomous vehicles).

The first has to do with consumers. What will consumers actually be willing, and even eager, to buy? Can't remember where I saw it (maybe earlier in this thread) where the central point the person was making is that by 2030, the consumer that wants to buy a gas engine car needs to be brain damaged. Admittedly that description was going for humor and is a bit over the top, but the idea is not. By 2030 it will be widely obvious that gas engine cars are more expensive, cost more to operate, perform less well, and provide less utility. It will also be widely obvious that those gas engine cars have lower resale value. They will be worse in every dimension except the thrill of the rev and engine noise.
Click to expand...

Something like roughly 1/3rd of the US population has no option to charge their car at home (they don't live in detached single family homes)... another chunk are renters in those single family homes and may have nothing but 120v available and driving habits that makes that not good enough.

And the % of people in detached single family homes in the US is almost 2x what it is in Europe so the problem will be even worst there.


People who CAN charge at home usefully, or who drive little enough they can get by without home charging, can likely get you to 50% of all cars sold worldwide without much issue.... (though I'm dubious we get to 35M BEVs produced by 2030)

Everyone else will still be buying a gas car in 2030 if they need a car.

Charging infrastructure continues to improve-- it's not going to be REMOTELY there in 2030 for 100% all EV fleets in even the most developed nations... and in less developed ones not even close.

Further there's entire segments where BEVs have basically 0 penetration right now (vans for example-- plus semis and pickups... there's niche players right now, but it's not going from 0-1% of the segment to 100% of the segment in 7 years.... because again nobody is making REMOTELY enough of them in that time.




adiggs said:
What will those consumers that currently want 70M car units a year going to do, when their simplistic choices are (1) buy an EV when there aren't enough available to sell to everybody that wants one, or (2) keep the current car / buy a used gas car instead of buying EV, or (3) buy a new gas engine car?

The easy answer is to do whatever they can do to avoid #3.
Click to expand...

Keeping their existing ICEv running has almost always been the MUCH more sensible economic choice.

Yet 70m new cars sell every year.

Most people make economically dumb choices all the time

Not sure why you imagine they'll magically turn smart en masse by 2030.



As I say there'll be consolidation, if the demand for ICE (note I'm including anything that runs on gasoline here, I expect hybrid % will be quite high near the end) drops down to say 40-50M (because there's still demand for 70M cars, but only 20-30M EVs are being made in 2030) you can still easily support half a dozen ICE car companies or more... just not quite as many as can be supported at 70M ICE a year.

Further, it'll be decades before most existing ICE vehicles are off the roads-there's 1.5B on the road today.

So there'll remain economic reasons for ICE-related parts to keep being made for decades. This will shrink to niche proportions eventually, but WELL after 2030....even if we pretend there's 35M BEVs being made/sold by 2030 you're still looking at something like >90% of all cars on the road being ICE that year.
 
  • Like
Reactions: petit_bateau
#545
Knightshade said:
I think going from "~0 new ICEV" to "no meaningful number" might be a bit of a goalpost move? What # is meaningful?
Click to expand...
Small enough that something that makes something like the current ICEV incumbents into a business where the economics no longer work. Let's use GM as an example: General Motors - global vehicles sales in 2022 | Statista

GM delivered 10M worldwide as recently 2017 and has been in constant decline since then, with just under 6M units delivered in 2022. Clearly the gross profit on the individual units matters deeply, but does GM still exist as a viable business with 1M units (whatever the gross profit) delivered annually (even the most profitable)? Does it even still work at 3M? I don't know the precise level, but a big part of why I see ICEV manufacturing largely gone by 2030 is that EVEN if consumers want to buy them in numbers bigger than bespoke manufacturing, those numbers will have stopped being profitable for a company to exist to make them (yes - making for a serious crunch).

Obviously I can be completely wrong - I'm guessing based on 2 interlocking and reinforcing trends that I see. Consumers will grow increasingly reluctant to buy an ICEV at any price for the reasons previously listed. In these capital intense businesses, reluctant consumers will lead to diminishing volume, leading to steadily worsening economics. Those worsening economics aren't all that obvious now, but in 5 years? Capital intense business don't shrink linearly.

Those worsening economics will reach a tipping point where those businesses will need to contract radically. I believe they'll be such a mess that bankruptcy court will be needed to get rid of big liabilities and reset the capital structures so that what's left (at that point) can again make economics sense. The ICEV business will then continue to decline and it'll happen again (reset the capital structure via bankruptcy).

Both GM and Ford refinanced 40B in loans last year - as well as the recent years in the financial reports I looked at (just a table of the financials). They also added a bit - 40B refinanced and 48B borrowed - stuff like that. 40B worth of loans can suddenly get difficult to find if the financial numbers start looking back iffy to the lenders, well then no borrowing and the capital structure doesn't work.

I don't believe that the Ford or GM (Volkswagen, ...) brands will disappear from the world. Nor will at least some of their manufacturing. The names themselves have too much value if nothing else. But shrinking a capital intensive business that can't borrow money - this is what I mean by even if there are consumers that have no choice but to buy ICEV this time around - will the businesses still be sufficiently economic to still be there to supply the vehicles?


Let's drop the absolute and agree that there will be at least 1 ICEV built and delivered in 2030, making that clearly silly. I apologize for making that seem like moving the goal posts.

Let me ask you the other side of the question. I've agreed with you that the EVs won't grow to fully replace teh current demand for ICEV int he world by 2030. That being the case - GM had 6M units worldwide in 2022, and I haven't looked for the 2023 numbers. How many units will GM be doing in 2030? Will they stem the decline and still be in business doing 6M? That would certainly be consistent with the current demand for vehicles.

I only see GM at 6M in 2030 if their ICEV to EV units ratio has flipped from today. Or at minimum it'll be clear that they're getting their fast. It won't be 6M ICEV, and yet that was what was needed in 2022. Are they still beating 3M ICEV units? I think the financials of the ICEV business have collapsed by then - there might be a reset company that can still build 1M units profitably by being really targeted, but that'll be a shrinking, not growing or even maintaining business.

Substitute any of the major ICEV manufacturers in the world for GM above. The details vary, but not enough to matter. All that will matter is who is seriously committed and progressing to turning their ratio of BEV to ICEV upside down from where its at today.
 
  • Like
  • Love
  • Informative
Reactions: EVCollies, Krugerrand, GleanerC and 4 others
#546
adiggs said:
Small enough that something that makes something like the current ICEV incumbents into a business where the economics no longer work. Let's use GM as an example: General Motors - global vehicles sales in 2022 | Statista

GM delivered 10M worldwide as recently 2017 and has been in constant decline since then, with just under 6M units delivered in 2022.
Click to expand...
Part of the reason for the decline from 2017 is because GM got rid of their entire European group which mostly sold under the Opel and (for the UK) Vauxhall brands:
GM completes sale of European division to PSA Groupe (from Aug 1, 2017)

Then FCA | Groupe PSA Merger --> Stellantis.
 
Last edited:
  • Informative
  • Like
Reactions: wtlloyd, Doggydogworld and CarlS
#547
#548
Couple of points on GM.

1)GM is re-entering Europe as an EV only company.


2) GM makes the vast majority of their profits on body on frame pickups and SUVs. Plus a little coin on specialty vehicles like Corvette and luxury minivans in China. Ford and Stellantis American division is similar.

3) GM unibody crossovers and sedans are essentially compliance ICEv in order to meet CAFE targets and similar in China.

4) An obvious strategy to transition is to replace the compliance ICEv with BEVs. This seems to be what the Detroit three are doing. Sell big heavy trucks at big profit and sell money losing BEVs to meet emissions/CAFE compliance until they scale and become profitable. From a compliance point of view a single BEV sale can replace several compliance ICEv sales. In other words, GM doesn't need to maintain 6M unit sales per year to maintain current profit level.

5) Most of the debt on GM and Ford's books is non-recourse debt to finance car purchases themselves. The lenders can repossess the cars but they have no claims on GM or Ford directly.
 
  • Informative
  • Helpful
Reactions: X Fan, Doggydogworld, EVCollies and 2 others
#549
adiggs said:
Let me ask you the other side of the question. I've agreed with you that the EVs won't grow to fully replace teh current demand for ICEV int he world by 2030. That being the case - GM had 6M units worldwide in 2022, and I haven't looked for the 2023 numbers. How many units will GM be doing in 2030? Will they stem the decline and still be in business doing 6M? That would certainly be consistent with the current demand for vehicles.

I only see GM at 6M in 2030 if their ICEV to EV units ratio has flipped from today. Or at minimum it'll be clear that they're getting their fast. It won't be 6M ICEV, and yet that was what was needed in 2022. Are they still beating 3M ICEV units? I think the financials of the ICEV business have collapsed by then - there might be a reset company that can still build 1M units profitably by being really targeted, but that'll be a shrinking, not growing or even maintaining business.

Substitute any of the major ICEV manufacturers in the world for GM above. The details vary, but not enough to matter. All that will matter is who is seriously committed and progressing to turning their ratio of BEV to ICEV upside down from where its at today.
Click to expand...

RobStark and others covered a major reason for the GM decline including prob 1.5-2M of it being getting out of certain markets.... But to address your question, as I say I expect some consolidation.

So if today there's say 15 legacy car companies selling ~60 millions non-EVs in 2023, by 2030 there might be only 6 or 8 of them selling ~30-40 million non-EVs (because there won't be more than 30M BEVs capable of being made in 2030 and demand will still be 10s of millions of vehicles higher than that)

At least a couple of those will probably have made SOME sort of not-fatal moves to get some of their production over to EVs (Hyundai/Kia seems to be doing a pretty decent job for a legacy company for example) and will keep existing long term.... the few left who didn't will die off over time as BEV supply keeps increasing and hitting more segments currently un or under addressed by them.

Plus you seemed to skim over the bit about infrastructure and there still being a LOT of car buyers for whom EVs simply would not work by just 2030? That problem will be a while to fix for everyone so I'd be shocked if there's not still significant #s of ICEv sold in at least SOME markets for some years beyond 2030.
 
  • Helpful
Reactions: adiggs
#550
BTW, regarding GM's unit sales decline since say 2017, it doesn't look like their (profit) net income has been doing horribly.

Take a look at these for Net income attributable to stockholders on:
pages 25 of https://www.sec.gov/Archives/edgar/data/1467858/000146785821000037/gm-20201231.htm
page 27 of https://www.sec.gov/Archives/edgar/data/1467858/000146785823000029/gm-20221231.htm
https://investor.gm.com/news-releases/news-release-details/gm-releases-2023-third-quarter-results for Nine Months Ended September 30, 2023
 
  • Helpful
Reactions: Doggydogworld and adiggs
#557
  • Informative
  • Like
Reactions: CarlS, navguy12 and EVCollies
#558
Doggydogworld said:
Long range BEVs will still cost more than same size ICE in 2030. They'll just have a $6000 fuel tank instead of $12,000. They'll still require longer, more frequent stops on road trips and will still be a PIA for typical renters and condo dwellers.

China has forced NEV sales to almost 40%, but now seems content to grow ~2.5m/year. That's 100% around 2030, 2/3 BEV, 1/3 PHEV.

Europe forced EVs to 20% in 2021 and will step up to 30% in 2025. They used to be half BEV but new regs moved them to China's 2/3 mix. Look for another regulatory step up to ~50% in 2030.

US is way behind. 50% by 2030 is a stretch. ROW even further behind.

They'll buy ICE. Mostly HEV. $29k Camry Hybrid @ $900/year fuel cost vs. 39k Model 3 @ $600/year.
Click to expand...
@Doggydogworld
i think you or someone using your name asked me a question on SA where i'm on permanent moderation due to a dustup with MS/LF
have driven MYLR 34,943 miles since june 7th, 2022
7,930kwh superchargers 29,196 miles 224 times 272watt hr/mile $2,82.27 around 9.7cents/mile 36cents a kwh
1,561 kwh Home PV 5,747 miles $41.83
83.5% supercharging
16.6% home charging
many long road trips (longest key west florida,USA to Buffalo, NY, to Wash DC & around (avoid hurricane Ian devestation & go to wedding) )
 
  • Informative
  • Like
Reactions: Doggydogworld and petit_bateau
You must log in or register to reply here.
Top
Back
Blog
New
Forum list
Marketplace
Menu