Today’s album is a broken record because TMD is gonna be me talking about expensive electric cars again. Why? There’s a lot of news on that front that happened to break in the last 24 hours from various sources.
Right up top we’ve got Mercedes-Benz CEO Ola Kaellenius stating that Mercedes-Benz is still committed to supporting combustion engines as the EV market is starting to stall in Europe and the United States.
Is he wrong? Well, both Lucid and Rivian came out yesterday with their respective financial reports and forecasts and the plan is for pretty much no growth this year for either of them.
The market will ultimately get to be the judge of all those automakers and, in a different way, the market will determine the fate of the EV-focused Lotus Technology division on Friday.
Benz CEO: EV Cost Parity ‘Is Many Years Away
Mercedes has quietly been growing its EV offerings here in the United States and elsewhere, but the reality is there seems to be a hard cap on how many people are willing to make the changeover until prices come down. How far away are prices from coming down?
According to Benz CEO Ola Kallenius, in a Bloomberg interview, it’s a ways away.
Variable cost parity between EVs and traditional cars “is many years away,” CEO Ola Kallenius told Bloomberg Television. “You can see that in the pricing.”
Mercedes on Thursday toned down expectations on EV demand and said it will update its combustion engine lineup well into next decade, becoming the latest carmaker to flag a slower than expected appetite for electric cars.
The luxury automaker said fourth-quarter net profits fell 21 percent to $3.4 billion while revenue dropped 1.8 percent to $43.7 billion. For the full year, Mercedes said net profit slipped 1.9 percent to $15.8 billion while revenue rose 2.1 percent to $166.3 billion.
Yeah, that’s not great, but it’s probably honest. Also, I think BMW might do better over the next year as I think BMW generally has a better EV lineup and a better plan for EVs.
Rivian: We’re Cutting Staff And Forecast Flat Production
Do you have a money guy/gal? I have a money guy. I need someone to help me make the hard decisions, keep track of the various taxable impacts, and otherwise pay attention so I don’t have to. Also, I don’t invest directly in any individual security I might write about for ethical reasons, so having another layer between myself and my investments is pretty convenient (Is there an auto supplier in a mutual fund? Maybe? I don’t know, that’s the point).
I say this because my investment advisor very excitedly bought a Rivian R1S SUV. He was so psyched about it. He’s still psyched about it. He drove it up to me and watched as I poked around the interior.
I like the Rivian and I get the enthusiasm. Unfortunately, there’s probably a limit, so Rivian is cutting its salaried workforce by about 10%, shutting down its Normal, Illinois plant for a few weeks to save money and retool a bit with new suppliers according to Automotive News.
Rivian CEO RJ Scaringe said the company is facing headwinds as U.S. consumers balk at high interest rates for new auto loans.
“Our business is not immune to existing economic and geopolitical uncertainties, most notably the impact of historically high interest rates, which has negatively impacted demand,” Scaringe said on Wednesday’s earnings call.
I think the high interest rates have, for sure, impacted sales of anything expensive. It also makes borrowing money harder. It’s tough. But “geopolitical uncertainties” is, as my favorite economics/finance podcast likes to point out, a buzzword that means everything and thus almost nothing.
Rivian thinks it’ll make about 57,000 vehicles this year, which is basically what it made last year. If there’s hope, it’s the 2nd gen R2 vehicles the company thinks will cost less than $50,000.
Lucid: We’re Making 9,000 Vehicles This Year
The recent price drop for the Lucid Air sedan makes the vehicle a much more attractive offering, which is good, because it’s currently the only offering the company has until the production of the Lucid Gravity later this year.
How are things in Lucid-ville?
Lucid thinks it’ll make about 9,000 vehicles this year, compared to 8,428 vehicles produced in 2023. That’s not great. What’s going on here?
This is a long-EV, short-oil play by the Saudis so I can imagine a scenario where the Saudi PIF keeps plugging money into the company until it has an affordable product at some point in 2026, maybe.
Lotus Technologies Could Be Worth $5.5 Billion At Listing
For the second time in the company’s history, Lotus will be a publicly traded company. Or, at least, the EV-focused Lotus Technology will be when it lists on the NASDAQ tomorrow.
Is this a SPAC? Yes. It’s a SPAC.
This is Lotus + L Catterton Asia Acquisition Corp = NASDAQ: LOT.
From a press release:
Since the transaction was announced, the Company has raised more than US$880 million in pre-closing and private investment in public equity (“PIPE”) financing commitments from global investors, existing shareholders, and strategic partners, representing one of the largest amounts of additional financings raised in connection with a de-SPAC transaction since 2023.
“We are thrilled to announce our upcoming debut on the Nasdaq as we complete our business combination with LCAA,” said Mr. Qingfeng Feng, Chief Executive Officer of Lotus Tech. “This is a pivotal moment in our journey. We look forward to accelerating our growth as a listed company, leading the electric transformation of the global luxury BEV market together with L Catterton.”
That puts the company’s value at $5.5 billion when it launches, but it should be noted, as Autocar does, that was not the original goal.
Lotus Technology originally pushed for a valuation of $12bn (£9.5bn) but instead settled on $5.5bn “due to growing concerns around volatility of global capital markets and the general economic outlook”, according to the filing.
Lotus Technology is separate from the sports car maker, with more ownership resting with Geely, rather than Malaysia’s Etika Automotive – the parent company of Lotus’s previous owner, DRB-Hicom. Etika owns 26.5% of Lotus Technology, compared with 49% of Group Lotus.
A lot of the value of this company might come down to the success of the Lotus Eletre and Lotus Emeya electric cars. Is there still some luxury demand left for the Lotus brand?
What I’m Listening To While Writing TMD
Could anyone else have been cast as the star of the video for Father John Misty’s “Hollywood Forever Cemetary Sings”? No, it had to be Aubrey Plaza. The whole “Fear Fun” album is a great listen, though I’m still uncertain if I’d really get along with Father John Misty (aka Josh Tillmann) or not. He seems like a lot. Oh well, great album.
The Big Question
Does the Lotus stock price end up higher in a year or lower?
We were told for years that price parity would come at $100/kwh. It’s now fully possible to build a battery at that price yet price parity is still years away. What gives? Is it just to pay for the factories?
Also, that sucks about Rivian. I really hope they make it. I absolutely love their products.
Price parity is possible. As much as I hate to say it, look at Tesla: the Model 3 and Y are priced right inline with a C Class and GLC while somehow netting Tesla larger margins. Sure, Tesla certainly made a lot of compromises – that I hate – to hit those prices, but so did Mercedes with their creaky interiors, unrefined powertrains, etc.
That’s because they are built to Fusion/Escape standards, not C Class/GLC standards. They are not luxury cars, they are cars with luxury prices.
They may only be making 9000 cars but damn the Lucid Air Sapphire just looks so good. It sits over its wheels perfectly.
Lucids are soooooo pretty.
I say Lotus stock ends up lower. Lots Of Trouble, Usually Serious, you know.
Okay great for more understanding of how car sales work and how Ev sales are going to work search my comments in Jalopnik and here. Then pay attention too the idiots who said I was an idiot and wrong and everybody would be buying cheap EVs and loving them. Yeah didn’t work that way. I said ICE was going to maintain the lead, hybrid was going to be successful and EV a loss. Overv5 years ago predicted it butbi am the idiot.
“Lotus Technologies Could Be Worth $5.5 Billion At Listing”
And then after the first set of quarterly numbers get published, the shares will tank
“Does the Lotus stock price end up higher in a year or lower?”
Given Lotus’ long history of flirting with bankruptcy, my vote is ‘lower’.
And I say that as someone who likes their vehicles and would love to have an Elise for myself.
I think the key word in the headline is “Pricey”…….who didn’t know that would be a problem? Raise your hand…..
I want whatever the execs are smoking where they think that resisting wage increases with a heavy dose of greedflation, coupled with a lack of action from the government to support working families that can’t afford a politician’s vote is a recipe for selling expensive vehicles.
Principal Skinner meme:
Am I out of touch with my luxury EV prices?
No its the interest rates that are out of touch!
Interesting that the Stellantis guy (Mr. Morgan Fairchild) said the opposite to Benz guy. He said all his EVs will be profitable.
And Tesla sells a somewhat premium car for a price below the average ICE vehicle, and does so with some of the highest margins in the industry. So, it can be done if you think differently about how you build and market a car. Of course those are two difficult things for established automakers with existing manufacturing plants, dealers, and branding. So, instead, they will just complain that THEY can’t do it and so the rules should be relaxed.
There is also the factor of when the given automaker started with BEVs, how much they’ve amortized their investment and how good they’re at reducing the cost.
Tesla has been at it the longest. So they have figured out more ways to reduce BEV costs than most. Plus they have been able to amortize their investments in BEV tech more than anyone else.
So the statements from Mr. Stellantis and Mr. Benz can both be true at the same time… for their respective companies.
**cough cough** carbon credits **cough cough**.
“Tesla Hits Record High Sales from Carbon Credits at $1.79B”
https://carboncredits.com/tesla-hits-record-high-sales-from-carbon-credits-at-1-79b/
that’s still only roughly 10% of their EBITDA, so they would still be very profitable without those credits.
Tesla EBITDA – 13.6B
Ford EBITDA – 13.8B
GM EBITDA – 15.8B
Stellantis EBITDA – 8.4B
Honda EBITDA – 12.7B
Toyota EBITDA – 49.0B
VW EBITDA – 51.9B
(DANG, Toyota and VW are seriously huge aren’t they?)
Wow.
How is Stellantis so far behind? Don’t they have 50 brands in 500 countries?
It also might not be that bad. They recently released new earnings and the site I used to pull the data looks to be behind on them.
From the Stellantis investor site:
But they don’t list EBITDA specifically, so hard to say. They might be doing well.
Automakers Are Starting To Admit That Demand For Pricey
ElectricCars Is LimitedYup.
Nothing will change until banks stop offering longer loans. Is your interest rate driving* the potential monthly payment up? Just tack on another year to the life of the loan.
*Did you see what I did there? Did you get my joke? It’s a pun. Driving in this context means “having force” but also we are on a website about cars and driving is a thing you do with cars. Did you get my joke?
Maybe if you explained it one more time.
I think I’m going to start using “geopolitical uncertainties” a lot more.
[Texting]
Wife: Can you pick up tortilla chips on the way home?
Me: I’m not sure I can considering the geopolitical uncertainties we are experiencing.
Wife: Just pick up the chips.
She almost never uses the period when texting, so that’s her way of saying ‘just do it and stop using excuses’
That’s a great one. That’s exactly how I see a text exchange with my wife going.
Notice since the tax credit is disappearing on some cars (hey ford) they are offering 7.5k off magically?
These OEM’s are all assholes and have been abusing the shit out of us for almost 5 years now. I hope they burn and the ones left take notes.
Also, they need to start talking to the Fed’s and be realistic about expecations and what tech is available, and what it will cost to develop all these super fancy no smoke cars. It ain’t cheap, and they are using some of that to pad the price and say “it ain’t our fault”
The whole USA needs a “come to Jesus” moment. Religion not needed, just common sense and the ACTUAL punishment of companies instead of constant “slaps” that do nothing to them but tell them to keep abusing people.
“The whole USA needs a “come to Jesus” moment”
I don’t see that happening. Nor do I see a mass of universal common sense hitting people.
If that was the case, then as a starting point, the whole MAGA/Trump thing would come to an end.
And people would stop buying vehicles and other stuff way in excess of their needs.
For this to get fixed we need good public transportation because then people would have an alternative to buying cars, but they don’t, so we are stuck in the cycle. No one builds public transit because no one rides it and no one rides it because it doesn’t go anywhere.
I am seeing a lot of bigger automakers get around this “high interest rate environment is killing sales” BS by offering loans far below the market rate. That’s because most of these automakers operate as banks too and they pretty much offer whatever rate they feel like as long as they are willing to eat into their profits a bit. I’ve seen TONS of ICE, EVs and PHEVS these days advertised for less than 4% APR (sometimes 0 or 2%) or zero down leases. VW and Nissan lately have insanely good offers on their full EVs that it almost makes me want to check them out (advertised prices of under $200 a month with little to no money down). Problem is that I really dislike the design of the ID.4 and the Ariya isn’t much better.
This is all to say that ALL new cars are too expensive right now. Automakers got way too comfortable juicing the base price of all their cars during the low interest rates the USA had for so long. They are now desperately trying to make up for MSRP inflation by subventing leases and loans, or hoping the Federal Government keeps letting them take a tax credit as a capital reduction on leases of EVs and PHEVs. One example of this inflation is the base price of the exact car I own, and Audi a4 allroad, purchased in 2018 stickered for 51k before negotiation. The same car is 55k base after 6 years. and ten years ago an equivalent car would have been more like 42k base.
“Historically high interest rates” is such BS. People used to get mortgages at like 15-20%
I think it’s just a cover for running out of people who want to buy a compromised BEV for $60,000. Expensive ICE pickup trucks are selling just fine.
When your business is primarily manufacturing and selling stuff, you’re not even lending the entire MSRP , just fronting the cost to build and bring to market. Obviously there’s more to it than that on paper, but the point stands.
Hell I can get a 0% loan on a fricken $20,000 snowmobile right now if I wanted. We are hardly in a “historically high” lending environment.
Exactly. If interest rates were so bad, nobody would be moving metal and there’d be a lot more competitive price reductions out there.
You guys read these reports fairly regularly? I’m pretty sure Matt has recently stated that Rams have some of the highest levels and oldest vehicles on dealer lots.
Its been my understanding reading here and other sources that full size trucks sales are stalling, inventory is building and incentives are increasing.
Hybrids and CUVs in the 20-40k is my guess where the bulk of volume lives these days.
Automakers are playing from the same playbook every time consumers don’t want the high margin junk they want to make. It happened with Chevy and Ford sedans, it happened with the Maverick, and it’s happening now.
Automakers to buyers: You want an electric SUV? You can wait in line for months/years for whatever the factory decides to send us or you can get whatever ICE vehicle you want, made however you want, and have it delivered within a week.
Automakers to the press/governments: Nobody wants these cars so why are we being forced to sell them?
There’s a massive flaw in your reasoning.You’re assuming electric SUVs are easy and cheap to make
I could never get in to Father John Misty personally. There’s just such an overt pretentiousness to the music that rubs me the wrong way. I’m a musician myself and, not to brag or anything, but a pretty proficient one. I had some scattered opportunities to pursue it as a career that I ultimately declined.
Suffice to say I love music deeply and have a pretty good idea of what goes in to making it at the higher levels. While I’m not going to sit here and argue that less is always more/bands like The Ramones are the peak of music or anything, I will say that if you’re going to go with a “more is more” approach you need have some restraint and sensibility when it’s appropriate.
A good example of that for me is Pink Floyd. They have a lot of ridiculously long songs with lots of layers to them and several very ambitious, highly conceptual albums…but somehow they never feel like a chore to listen to. A more modern example for me would be Radiohead (yeah yeah I know, city dwelling white dude with multiple degrees likes Radiohead, more at 11) or if we want to talk about other genres I think Kendrick Lamar makes a lot of really ambitious music that rarely feels contrived.
Polyphia does too. Even as a guitarist I think shreddy wanky panky stuff gets old quick, but they somehow make progressive instrumental music that’s downright fun to listen to. How they do it I haven’t the foggiest. And no, I can’t play any of Tim Henson’s shit. No one can…
Wow this got out of hand. Anyway, FJM’s music just always feels really overblown and overwrought to me. It’s an exercise in excess for the sake of excess and that’s just not really my jam personally. He also, as you suggest, seems to have a personality to match. Where were we again?
Oh. Aubrey Plaza. She’s the perfect intersection of beautiful and slightly scary. I like women who scare me a bit. Your imaginations can fill in the text. But Aubrey and Kat Dennings are my ultimate goth GF crushes.
A +1 for the Pink Floyd reference.
A side note here: As a dog owner we learned that almost any Floyd song would calm their butts down, and usually put them to sleep, fast.
My current mutt has separation anxiety issues. So whenever I have to leave, I just put Dark side of the Moon on the CD, and press the repeat button. Upon returning the mutt is always crashed.
We have a somewhat psychotic, highly training resistant dog ourselves. He’s not malicious or dangerous or anything, but if you’re not a dog person you absolutely do not want to be around him. He has absolutely no chill. Fortunately he’s only 30 pounds and you can just pick him up and carry him away when he’s being obnoxious, but still.
We’ve tried it all. The challenge is he doesn’t care about food at all so positive reinforcement isn’t super effective. We’re lucky if he finishes a single bowl of kibble in a day and the vet has him on fancy prescription stuff to try to make up for the lack of volume/his extraordinarily sensitive tummy. My wife is optimistic that he’s going calm down naturally with age but the little bastard is already 3 so I think we’re just going to have to live with some of his neuroses at this point.
You know what works? White noise. We have a white noise machine in our room since we both struggle with insomnia and if you turn that on he’s out within five minutes. It works like a charm, but maybe I’ll treat him to Dark Side next and report back.
2 1/2 yr old Rottweiller mix here. Shelter baby at 6 weeks old when we got her.
A sweet dog, but she is insane. After my wife passed she went nuts.
And started to destroy the house whenever I had to leave.
Like over 10K of damages. I wish there was a way to show you pictures of all the damage. To top it off my insurance adjuster says my policy does not cover animal damage.
The vet gave me doggie downers and they helped. But a stoned mutt was not a good thing. Thank God for the Floyd boys though.
Best of luck to you amigo.
Sorry to hear about your wife. And thanks! I still love him but he’s a piece of work. We’ve talked about doggie downers for when we have company but my wife is staunchly against it. I don’t like the idea of drugging out doggo either but I’m usually the person who winds up having to keep him in line when we have company and it makes it hard to enjoy myself.
Feel your pain friend. When company stops by I have to put her on the leash and hook her to a heavy object away from us as she will “kill” the company with her brand of affection. Good luck.
Heavily abused Chihuahua mix here. Can’t use food/treats, either as the first place he stayed must have offered, then hit him: he would whine, cringe away, then submissive-pee when offered treats for the first few years. Once the bandages came off (lost a front leg to abuse), and he became mobile, he started destroying duvets if I was gone for more than a couple hours. Eventually found that our local NPR station playing in another room kept him calm. He hasn’t chewed on anything other than his toys in years now.
I wish you the best of luck as they can be a trial
Holy crap! It’s beyond my mental capacity to understand how someone can abuse any animal. But then again, look at the world we live in…I am thankful for folks like you and your wife. And am certain your dog is grateful as well.
They truly never forget those who are kind to them, but as you already know it can be a tough process to teach an abused critter how to trust again.
I applaud you both. And hope there’s a special place in hell for the turds who hurt animals. Best of luck to you all. And thank you.
You deserve much credit for continuing to love your shelter-baby through thousands of dollars of damage during a time of loss yourself.
Whenever old Scruffy rolls over to present his belly for scritches, I’m again reminded that every bit of inconvenience & cost was well worth the result of him knowing that it’s safe to trust some people.
Kudos to all that take in those who were abused
Hmmm. Pink Floyd. White Noise. Pink Floyd = White Noise? That would explain a lot.
“Highly training resistant dog” takes me back. We got our second dog just over 5 years ago, a complete mutt, as the DNA test revealed.
Took her to the same trainer that we took our first dog to. I think it may have been because we were the only dog there, but in the end, the trainer gave up. Literally was on the ground trying to get the dog to listen to a command, sat back and said “I don’t know what to do here.”
Luckily, if you look up “aloof” in the dictionary, you’ll see a picture of my dog. She has learned to be obedient enough to not be a pain in the ass, but she’s not going to do what she doesn’t want to do! lol
That’s my mutt as well.
Super interesting
Don’t play Animals. “Sheep” might give them nightmares.
Huh. I always kinda figured you were a drummer.
I can keep a beat and do some basic fills but I’m nothing special. I’d like to learn how to actually play the drums but the wife doesn’t want a drum set in the house. Seeing as she supports my expensive taste in guitars and the fact that I have a hundred watt amp for “reasons”, I think this stance is fair enough haha.
I primarily play guitar. I’m a halfway decent bassist as well. One of my buddies who’s a funk and jazz player taught me some cool techniques way back in the day, but I can’t tell you the last time I played bass so I doubt I’ve still got much of it down. I also play a bit of mandolin. It’s a cheerful little instrument that I like quite a bit, but I only pick mine up every couple weeks. I mainly just rotate between my 4 guitars depending on what mood I’m in.
Aubrey Plaza and Kat Dennings are definitely in the running for the niche of “America’s hipster girlfriend.” Competition is a good thing, as Zoe Deschanel has held the title for too long (I have a total celebrity crush on Dennings…she has just the right amount of edge for me).
And Radiohead needs no apologies. They really are the closest modern thing to Floyd in terms of both their sound and how the approached the craft of their work. And like Floyd, how many rock bands successfully changed up their musical style like they did?
I’m a FJM fan, and while there is a thick fog of pretentiousness to him, a lot of his material tends to own up to his own bullshit. As much as I imagine he could be a bad hang that’s an infinite loop of ridiculous nonsense then analysis of said ridiculous nonsense, I Love You, Honeybear is about as honest of an album as it gets (at least for anyone who’s liable to get stuck in their own hipster bullshit). I dug it.
Moving on, Aubrey Plaza has got to have damn near a 100% approval rating.
How do you feel about KGATLW?
They’re not my cup of tea necessarily but I respect them quite a lot. Their sheer output is mind blowing and the fact that they manage to dabble in tons of different genres successfully is no small feat. Some of their stuff gets a little noodley for my taste but they’re certainly in the extremely difficult to achieve “progressive but not pretentious” zone.
Have you heard Gazpacho? Silly name, especially for Norwegians, but their recent records like Demon and Fireworker are really great. No instrument gets the spotlight the way e.g. Pink Floyd showcases the guitar or keyboards. It’s just really awesome, stimulating music with incredible production.
As a Dutch tulip merchant, I see no reason to ever lower prices. People say “Mathieu, the tulip market is clearly inflated due to a bubble market beyond your control. And you should consider diversifying your stock. As it seems improbable for zero interest rates and free money to continue.” and I say to them “I put the bulb in the ground, tulip pops up, and I sell for alot of guilder. Everybody loves the tulip, party will never stop.” Shame, it’s January 1638 here in a Holland, so we don’t have access to an economist as it hasn’t been invented yet and also heresy. Maybe we should invent that, like a major cooperation should hire one. You know, someone to tell them that violating one of the most basic tenets of Economics probably isn’t going to work out.
I enjoyed Tulipomania way more than I probably should have. It’s just such an improbable event—at least, that’s what I thought.
But, nope: it’s a very human thing, and it keeps happening in various guises
Just look at the bicycle market right now. You would think that multi-billion dollar cooperation would recognize that a renewed interest was clearly driven by a population experiencing a hopefully once in a life time event with extra capital due in large part to that event. Every single one of them continued to produce at peak pandemic levels hoping to ride the rapidly depleting wave. Now the entire industry is a burning garage fire of unmovable overstock. We’ve known about bubbles for what 400 years? and still a 11 billion dollar industry dove head first into the most obvious of bubbles.
“This time it will be different.”
So…you’re saying that I might actually be able to afford a Pivot??
-and, by ‘afford’ I mean, ‘not pay 15 old beater Subarus* for it’
joking aside, you seriously think prices are going to come down some? I really enjoy riding my bil’s bikes, but I can’t see paying more for one than I did for the wrx that would transport it
*$350ish 😉
Probably not to 350ish bucks. But if you were in the market for a mid to high end gravel, road or xc bike, it would be the time. Basically all the manufacturers got really into the high profit margin bikes and traded production of the lower end hybrids and stuff under a k that actually drove bike shop traffic. Retail has a real logjam of upper end bikes right now that their despite to off load, as they have minimums to order for this season or risk losing their license. And manufacturers don’t have an inventory that actually sells. Shimano, which is the canery in the bike industry coal mine, is down 85% profit this year.
I meant 15 x $350. I wouldn’t really have issue with paying $3k or so for something as fun & capable as that Pivot, but I can’t justify $5k as I’m nowhere near hardcore about biking. I’ll have to ask my bil about the market as he’s always searching for the next one.
Or maybe a lot less depending on your circle of friends and family.
I was gifted an older Giant Propel Advanced and may have a similar TREK coming my way, both from folks who bought during the pandemic and are now riding much less.
“Just look at the bicycle market right now.”
Ha! I’m still riding the bubble surges of touring bikes that happened after the bikecentennial and the mid 80 surge of ATBs.
Tulips are a very interesting bubble since they have very little real utility, they are only available for a short period, they are easily replicated, and must be “utilized” immediately. They are purely decorative so they can’t be used to generate income like a car, and they can’t be stashed like a painting to anticipate future market scarcity. It says a lot about humans that we were able to create a tulip bubble.
But they can be infected with a virus that noticeably changes their appearance and reduces their ability to reproduce.
IDK, Tesla figured it out. Maybe ya’ll just can’t get away with doing things the same way that you’ve been doing it for decades? Shocking, I know.
At any rate, my soapbox for the current EV conundrum has been fairly steady: if everyone enters the exact same segment all at once ($60k crossover) then sharing the pie is going to be painful
Yeah I understand why manufacturers have naturally gravitated towards expensive crossovers for their first BEV- Lots of space for batteries, and a decent price point and margin to help cover the costs of R&D.
Unfortunately everyone seems to have had the same idea, and the segment is basically saturated.
Plus you’re competing with a ton of incredibly refined and capable ICE vehicles in that price point. Premium ICE cars are already fast, quiet and pleasant to live with. Many are quite reliable. Other than charging vs fuelling, the user experience is basically the same, and the practicality of the charging really starts to be the deciding factor.
While the average new car price is quite expensive, most lower income people stretching to buy their 40-50k family vehicle, really need it to do everything possible for them.
Everyone I know with an EV has it as an alternative to their ‘other’ vehicle:
Chevy bolt ~ Honda Element
Model 3 ~ Silverado 4 door
Model 3 ~ Highlander Hybrid
The market has exhausted the supply of people who consider 40-60k an acceptable amount of money to spend on a compromised vehicle. (Until charging gets better anyways) If manufacturers are serious about the proliferation of BEVs, it’s time to aim down towards the 20k mark.
I do think lots of normal people would be happy with an EV like that new Dacia Spring as secondary/ around town/ commuter car. You just need to sell it for a price that allows it to play second fiddle to their 2015 Chevy Traverse, or whatever.
I truely believe the cheaper you go on the cost spectrum, the more the reduced operating costs, improved performance and NVH begin to improve the experience Vs the gas competition. The Chevy Bolt for example, feels better than its ICE equivalents simply for being electric. Better torque, quieter, more of a ‘solid’ ride.
The first player who can sell to that segment and actually make a modest profit will be the next Tesla. (Maybe it will just be Tesla again.)
This NHV advantage of the EV allows even a bare-bones stripped-down lightweight racecar of an EV to be comfortable and quiet. With my electric Triumph GT6 conversion, all you hear is the wind rustling up against the windshield and the high-pitched hum of the transmission. It sounds like a futuristic race car. It’s a tin-can of an automobile and is not at all plush, and over bumps you can hear it rattling, but it’s much smoother and quieter than any car I’ve owned, including a cushy Mercedes 300 SDL.
A lightweight inexpensive EV of under 2,500 lbs won’t need much in the way of sound deadener, if any at all.
Great point- The sheer mass of the battery (even a small one) bolted to the entire bottom of the floor pan must make a big difference. A lot better than some layers of felt and Dynamat.
I never even thought about that- In an ICE the big heavy engine + 10-15ft of exhaust pipe is the thing vibrating, and must be engineered into isolation. In an EV, the heavy part works to your a favour, no special effort required.
Cost parity between EV and ICE was possible 30+ years ago. You have to design the EV as an EV from the ground up, and not as an ICE, and it must be designed in a way that it can be repaired, with open source software, and where the batteries can be easily serviced. Aerodynamics also make a massive difference.
Now if you design an EV to milk the operator for every cent, of course you’re never going to have cost parity with ICE. The expensive-to-operate EVs we have today is a feature of the design choices made, and not an inherent feature of the technology itself. If anything, EVs should be significantly cheaper in most use cases because they aren’t using expensive gasoline.
The Teslas are proving themselves to be for the most part inexpensive to operate, in-spite of how expensive they are to repair.
It also matters how the vehicle is used. Someone who drives a lot of miles could easily see savings with an EV vs ICE. The battery itself has a shelf life, in addition to a cycle life. Someone who racks up 500k miles on a Model S battery before replacement and primarily charges at home is going to come out way ahead of say, operating a big-body ICE BMW or Mercedes sedan over the same amount of mileage. If, however, someone only puts 30k mils on their EV over a 15 year period and the battery was allowed to degrade, it will prove significantly more expensive per mile than a comparable ICE.
I’m not sure if there is an Automotive sector SPAC that is currently higher than its launch price, not to mention any post launch increase. So with that SPAC history, high interest rates, difficulty obtaining funding across the board, and the fact that this is buying Lotus adjacent but not actually getting to own part of Lotus the auto maker, I imagine the launch price will see a post launch spike lasting a few days to a couple of weeks max, then it will slide, hard, down 50% or less of launch value, then hover there until some kind of news gives it another 10% slide or 5% bump, then back to hovering.
Historically high interest rates he says? I would say the last 15 years where money flowed for free was the aberration.
The EV’s for sale in the US are too expensive? Hmm, no shock there.
Give it until mid 2025 and check again. More domestic lithium production, anode production and battery manufacturers should bring down costs.
People can’t afford new cars anymore. It’s time to bring back the cheaper small cars.
Mexican-made BYD can probably sell a brand new EV under 20k and possibly even a new car for under 10k (though not EV, of course)
Rivian’s problem is that they retroactively cancel orders that have already been placed instead of honoring them. Even if they discontinue something, they should still fulfill orders that have already been placed.
Also, Rivian killed off the yellow color, and they now restrict the green interior to certain exterior colors. At least some yellow-on-green Rivians were produced tho 🙂
The first to offer a sub-2,500 lb RWD streamliner of an EV for under $25k with 200+ miles range that has usable trunk space, even if it has only 2 seats, is going to sell a crap ton of them. Getting it to perform like a supercar in a straight line will be so dirt cheap that it will be doable at that price point, which will expand its potential market share simultaneously to those seeking a high-end performance vehicle costing in the six-figures, even if this car is intended to be sold at the low-end of the market, for the mere fact that it will be able to compete regarding performance.
The entrenched auto makers can ignore this possibility at their own peril. The Chinese are beginning to figure this out(Qiantu K20).
I’d love to see a streamlined RWD EV, But I think safety design might limit how light it can get. I’m curious to see what Tesla does with their new “affordable” EV, and I’d be very interested to see how the Chinese do in American standard crash tests. My feeling is that “light and crash rated” = “more expensive materials” I wish that BMW’s foray into carbon fiber had worked out to be economical.
The MX5 is a good guide point regarding what can be done with conventional materials. Somewhere under 2,500 lbs is very doable.
An EV with a 30-35 kWh battery can be made not to have a weight penalty over a 4-cylinder ICE. A fully assembled battery of this size including BMS and thermal management will weigh around 300 lbs. A 200 kW peak electric drive system will weigh another 120 lbs. No transmission is needed for the EV and either a single-speed direct drive or in-wheel hub motors will allow significant weight savings over a 5/6-speed manual.
In order for that small of a battery to allow a 200+ mile range, the aerodynamics must take central focus. A CdA value like a VW XL1 should be a good starting point, and is doable with current regulations and conventional/inexpensive materials. If the CdA ends up like that of an MX5 ND, then range will be cut by almost half and that will not be a viable car to sell.
“A voice crying in the wilderness…”
The XL1 would pretty much work as is with the updated battery and drive tech currently available, but the cost of that body will kill it. How do we do this with high strength steel? The MX-5 is a good example, but crash safety is… somewhat compromised. My first project on my NC was a real roll bar.
The same way we build other cars with high strength steel. Stamped panels, assembled onto the platform. If the car is mass produced, the per-unit NRE costs go down dramatically. The reason the XL1 is so expensive is because of how few of them were made.
Fiberglass can also be used and is not nearly as expensive as carbon fiber.
The MX-5 passes crash safety standards, and that’s mostly what matters when it comes to selling them. A modern MX5 is much safer in most conceivable collisions than almost any car from the 1980s, even the biggest ones. With safety, we got to the point of diminishing returns regarding added mass vs increased safety returns 30 years ago.
This concept isn’t that hard to understand, but automakers have spent so much time and effort brainwashing people to love SUVs that they are pretty sure such a car would fail in the US. They simply don’t want to spend the money required to un-brainwash people.
I guess it all comes down to faith in the intelligence of the American people.
I’m old enough to remember the $6000 car. Hyundai Excel and the Yugo. You could get both on the cheap and designed to be cheap. They ran for a while and I guess filled a gap in the automotive landscape for people that had to buy new or needed something reliable (for a little while at least).
I cannot remember seeing any of them 10 years later. They were disposable. Maybe BYD’s offering would be better. Dunno.
I’m pretty skeptical of anything SPAC-related. The regulations for IPOs are there (at least nominally) to help protect investors. I’m not really in a financial position to be throwing significant money at something so risky that the sellers seemingly don’t want those risks to be known to investors.
*edit: which is to say I’d avoid this Lotus thing, whatever it is. My guess is the price will be lower a year from now, but that’s just a guess.
Me too. And they’re now going bust fast as interest rates rise and even companies with actual business plans face capital-raising challenges.
Agreed, will l probably be lower.
If Tesla can make money on every car why can’t everyone else? I get Tesla has a decent head start with development which ‘legacy’ automakers still might have to go through.
They could try making them affordable with less tech in the them.
What most people think of as “tech” doesn’t really add much to the cost of a car, which is why even the cheapest cars have screens and sensors.
The reason a Lucid is so expensive is because batteries cost a lot of money and because development costs have to be spread over a relatively small number of cars compared to larger companies.
Tesla has only recently started making a profit on car sales. It takes a lot of R&D and capital costs to develop BEV vehicles. Tesla was able to mitigate this by selling regulatory credits and ancillary income. Legacy automakers were the ones buying those credits, so they can’t turn around and subsidize their R&D with that “free” money.
There’s little to gain and a lot to lose. Much of the expense of a BEV is still tied to the battery and R&D. De-contenting the cars would save relatively little money but greatly discourage consumers who expect a certain degree of comfort and features, especially when you consider many of these bells and whistles can be cross-applied with existing and more profitable ICE platforms.
Can’t say with any certainty about Lotus as I have no idea what they actually do, but it is appropriate that you motion Rivian in today’s Morning dump as their stock is currently smack-dab in the middle of a Taco Bell Burrito expulsion today, and it’s very slidey. Yuck.
Invest in primarily low-fee index funds and target date funds, with some diversity into bonds, real estate, and foreign and/or small cap stocks depending on your risk tolerance (again targeting low fee products) and mostly ignore them for decades. Any brokerage will prominently display the fees and will show history and prospectus of the investment options.
There, now I’m your money guy and you don’t even need to buy me a $90,000 Rivian.
Historically, the S&P has been everyone’s friend. Set it and forget it.
Everyone except active fund managers.
Staying the course in all weather gets tough. Some folks need another human to tell them not to panic sell when the market takes a 10% swoon. They’ll still do better paying a fee for that service than wiping out their holdings in a panic and trying to time the market to get back in.
That is true, although I’d hope MH would have sense enough not to fall into that trap.
That said, his opinions on jellybean F150s do force me to question his judgment at times.
But the whole point of “set and forget” is to forget.
The real risk is a complete meltdown of the dollar, but then money has lost all meaning and survival is the only concern.
My entire future financial well-being depends on advice I got from the comment section of an auto enthusiast website.
Do you need any medical advice while we are at it?
Yeah, you don’t need two livers how much for one of yours?
Time is usually on your side. I was stuck holding 10K shares of Sirius back when the market tanked in 08. A day away from them declaring bankruptcy. Could have bought a shit ton of shares at the low price of 4 cents a share whilst everyone panicked, but my better half said no. It was hell, but I refused to crater to fear. 10 years later, I came out of the storm and sold for a sweet profit. But 10 years is a long time to wait, and it sucked.
That’s why I hung up my stock-picking hat a long time ago. The market wants to grow. Much rather pay a mutual fund to invest in the market than me trying to pick stocks. Which I’m terrible at.
That is a very good point and a wise POV. Knowing what the future holds can be a real crapshoot. Sometimes we get lucky in spite of ourselves…