Lamenting the decline of the car

[hipster duck]

If Toyota is behind, then Honda and especially Mazda are probably not long for this world.

The 2023 electric version of the CX-3 that Mazda is launching in the US has a starting MSRP of USD 34k and just a 100 mile range. That sounds like what cutting-edge EVs were 6 years ago.

[Truenorth00]

Originally Posted by hipster duck

If Toyota is behind, then Honda and especially Mazda are probably not long for this world.

The 2023 electric version of the CX-3 that Mazda is launching in the US has a starting MSRP of USD 34k and just a 100 mile range. That sounds like what cutting-edge EVs were 6 years ago.

Yep. They are definitely in trouble. Likewise Subaru and Isuzu. Having Toyota as a major shareholder, with its staunch opposition to BEVs is going to sink them all. Or at least, in a decade, they will all be far smaller than they are today. And if the Chinese OEMs (like say BYD or Nio or Xpeng) take off in the West, they may have to actually abandon some markets.

Originally Posted by Mister F

In the 90s Kodak dominated the photography market and was one of the biggest companies in the world. They buried digital photography technology because it would hurt their core film business. They probably thought "we'll get into the digital market when it's time". As we know now that didn't happen and the photography market left them behind. The company has shrunk by more than 90%.

We've seen so many companies go out of business or lose dominance in their field. Kodak tanked with its film business. But the rise of smartphones itself hurt the digital camera business. Likewise for say standalone GPS, which themselves killed paper maps. We've seen companies like Kodak, Polaroid, Nokia, Blackberry, Minolta, etc. go out of business or substantially shrunk. We have seen the rise of new business models like Uber disrupt taxi business and tank they value of their medallions. We have seen entire new social concepts arise, and go from taboo to norm. Think of online dating. And yet, having seen all of that in just the last two decades, people struggle to imagine that a handful of recalcitrant automakers can be cut down to size by the march of technology?

Originally Posted by Mister F

PHEVs won't last. BEVs have started their ascent to the dominant technology for cars. ICE manufacturers can't just "get into the BEV market". It's not a simple matter of switching a drivetrain, it means remaking their entire core business and corporate culture. It means becoming more Silicon Valley and less Detroit, as VW is finding out. It means developing all new platforms and completely rebuilding supply lines in the face of battery supply that's still scarce. All of this takes years. Some very big car companies are going to get caught with their pants down.

Volkswagen's struggles should have really been the warning that lit a fire under the ass of traditional automakers. VW is still grappling with software and slowly learning that an EV really is an iPad on wheels, which means their traditional mechanical engineering of engines is useless. There's reason that Tesla has way more software engineers than mechanical engineers. VW is coming to terms with this. Detroit is behind VW. I'm not sure the Japanese automakers have even fully absorbed this lesson yet.

Toyota et al are still betting that batteries won't drop in price or won't have the supply for lots of automakers to transition. And they are betting that they can come to market with solid state batteries and win back marketshare they lost. But I'm going to bet that they won't be able to scale battery supply, the Chinese OEMs will have a lot more, and they will struggle with software more than VW did. And when some combination of all that happens, they'll lose a ton of marketshare in the bottom half of the decade. Marketshare they need to fund the transition and keep existing debt (with a debt/equity ratio > 1) at bay. If they aren't panicking in private, they should be.

[WarrenC12]

Tesla made it look too easy to go from nothing to selling EVs. Big OEMs thought they'd be able to knock Tesla off at their convenience. It's obviously a lot harder than that, and doubly so for some of these huge companies to shift priorities.

Comparing the 3rd quarter of 2021 to the 3rd quarter of 2020, US Tesla sales were up 67% while overall US auto sales were down 13%. Compared to 2019, the difference was even more stark — Tesla sales were up 104% and US auto sales were down 22%.

The Top 10 are:

1. VW
2. Toyota
3. Renault/Nissan
4. GM
5. Hyundai
6. Ford
7. Honda
8. Fiat/Chrysler
9. PSA (France)
10. Suzuki

You need to make 3.2M cars to crack this list and VW is close to 11M at the top. (these numbers are a few years old)

In ~10 years Tesla will be in here somewhere, and probably 2 Chinese manufacturers. I'm not sure who will drop off, but I wouldn't be surprised to see 1 of the US big 3 fold, and 1 Asian manufacturer fold or be acquired.

[Jaws]

VW is further ahead with BEV development than they would have been had it not been for the Dieselgate scandal. In 2016 VAG committed to accelerating EV development as pennance for their diesel emissions gerrymandering. Additionally, part of the settlement with US authorities was investment in the Electrify America charging network. Ironically the very scandal which threatened to sink them might be the thing that actually saves them.

[Truenorth00]

...

[Truenorth00]

Originally Posted by WarrenC12

Tesla made it look too easy to go from nothing to selling EVs. Big OEMs thought they'd be able to knock Tesla off at their convenience. It's obviously a lot harder than that, and doubly so for some of these huge companies to shift priorities.

The ironic history of disruption. Their very success makes it difficult for them to transition. They can't risk cutting profits, so they have to keep dedicating resources to supporting their existing models. And there is the possibility of large investments in EVs driving an Osborne effect which tanks sales of current models. So they keep refusing to fully commit. Meanwhile, startups with no legacy costs have no such issues.

Originally Posted by WarrenC12

The Top 10 are:

1. VW
2. Toyota
3. Renault/Nissan
4. GM
5. Hyundai
6. Ford
7. Honda
8. Fiat/Chrysler
9. PSA (France)
10. Suzuki

You need to make 3.2M cars to crack this list and VW is close to 11M at the top. (these numbers are a few years old)

In ~10 years Tesla will be in here somewhere, and probably 2 Chinese manufacturers. I'm not sure who will drop off, but I wouldn't be surprised to see 1 of the US big 3 fold, and 1 Asian manufacturer fold or be acquired.

My bet is Honda, Fiat/Chrysler and Suzuki are off that list in a decade. Tesla and BYD make it on. The third addition is tough to guess. Toss up for me between Geely and SAIC.

[WarrenC12]

Originally Posted by Truenorth00

The ironic history of disruption. Their very success makes it difficult for them to transition. They can't risk cutting profits, so they have to keep dedicating resources to supporting their existing models. And there the possibility of large investments in EVs driving an Osborne effect which tanks sales of current models.

Yep. I sure hope companies like Magna are paying attention too. This will have a huge disruption across the parts and components industry for vehicles.

[drew]

Originally Posted by Truenorth00

The ironic history of disruption. Their very success makes it difficult for them to transition. They can't risk cutting profits, so they have to keep dedicating resources to supporting their existing models. And there the possibility of large investments in EVs driving an Osborne effect which tanks sales of current models.

There is that, and also the fact the larger automakers are truly global companies.

They still need to sell and support existing markets in South America, Africa, the Middle East, etc. where ICE's will remain for much much longer.

[Truenorth00]

Originally Posted by WarrenC12

Yep. I sure hope companies like Magna are paying attention too. This will have a huge disruption across the parts and components industry for vehicles.

Magna has been quietly building up an EV parts and assembly business. They aren't stupid. They know their best bet is to be a contract assembler for one of the laggard OEMs.

[WarrenC12]

Here's Mazda trying to sell us a 2022 EV with 161kms of range. Unbelievable.

https://www.mazda.ca/en/vehicles/mx-30/overview/

[rofina]

Originally Posted by WarrenC12

Here's Mazda trying to sell us a 2022 EV with 161kms of range. Unbelievable.

https://www.mazda.ca/en/vehicles/mx-30/overview/

I think it proves how difficult it actually is to produce a compelling EV.

By compelling I mean something with a range more than 161km.

I at least appreciate they didn't make it look like an EV.

I might be part of the minority, but I don't think EV's need to look any different than ICE cars.

[WarrenC12]

Originally Posted by rofina

I might be part of the minority, but I don't think EV's need to look any different than ICE cars.

They don't need to, but they should be designed from the ground up. They allow a lot more freedom of design because the parts are limited. You can build whatever you want on top of the "skateboard" of a battery and small electric motor.

Most EVs have roughly replicated gas cars, and they just put storage into the traditional engine bay and other spaces. The weird designs are mostly in the name of aerodynamic efficiency, which is super important with expensive batteries, less so in the future as prices come down.

[Truenorth00]

Originally Posted by drew

There is that, and also the fact the larger automakers are truly global companies.

They still need to sell and support existing markets in South America, Africa, the Middle East, etc. where ICE's will remain for much much longer.

This is prevailing wisdom that makes no sense. Nobody is more motivated to get off oil than importing nations. The benefits to them are far higher than they are to us. And as the technology gets cheaper they will adopt it much faster that is, in ways we find hard to imagine. They won't be buying Teslas en masse. They might be buying three wheelers with battery swapping and electric motorbikes and bicycles.

[esquire]

Originally Posted by WarrenC12

Here's Mazda trying to sell us a 2022 EV with 161kms of range. Unbelievable.

https://www.mazda.ca/en/vehicles/mx-30/overview/

161 km of range would be fine for a coupe that acts as a city car and never really leaves the your part of town. It's a joke for an SUV that people would actually expect to take out on the road. I don't get who would actually buy this thing.

[thewave46]

Originally Posted by Truenorth00

This is prevailing wisdom that makes no sense. Nobody is more motivated to get off oil than importing nations. The benefits to them are far higher than they are to us. And as the technology gets cheaper they will adopt it much faster that is, in ways we find hard to imagine. They won't be buying Teslas en masse. They might be buying three wheelers with battery swapping and electric motorbikes and bicycles.

Writ large, you're probably right with respect to the goal of those governments.

But...

The electrical infrastructure is still pretty weak in many places and is expensive to invest in, whereas petroleum-based fuel infrastructure is better as that fuel can be stored and moved independently.

China had the massive power of government to effectively build out its electrical grid and make it reasonably reliable. Electricity in some areas of Africa is extremely intermittent and unreliable. India's kind of a mix - there are good parts and much weaker parts. It would not shock me to see electric carts in the city and gasoline-powered ones in the country.

I can foresee some big consolidation in the Japanese automotive industry. They've too many automakers with low volumes. Indeed, that's kind of happening right now - Renault, Nissan and Mitsubishi have formed an alliance, while Toyota has taken stakes in Mazda and Subaru. Honda remains the odd man out - while Hondas are quite popular in North America and Japan, their global presence is relatively limited.

I don't think the Japanese are done, however.

[thewave46]

Originally Posted by esquire

161 km of range would be fine for a coupe that acts as a city car and never really leaves the your part of town. It's a joke for an SUV that people would actually expect to take out on the road. I don't get who would actually buy this thing.

It's a compliance car.

It is a vehicle that allows Mazda to meet California compliance mandates for the sale of zero-emissions electric vehicles so that it can continue to sell other vehicles in the state. If it sells more than a handful here, I'd be surprised. Mazda can use it as a promotional thing.

Electric cars are best suited to drivers that have a fairly small radius (say <120km) in 90%+ of their travels. Which actually captures a large portion of the kilometres that many drive in this country.

Now, if one is in a colder region, more rural area or does reasonably regular long-haul trips, gasoline's still the best bet for the next little while pending major battery improvements. I wouldn't recommend someone from Brandon, MB who makes trips back and forth to Winnipeg jump on the electric vehicle thing yet. For someone in suburban Vaughan who doesn't leave the GTA much? Go for it.

[OldDartmouthMark]

Originally Posted by Truenorth00

The ironic history of disruption. Their very success makes it difficult for them to transition. They can't risk cutting profits, so they have to keep dedicating resources to supporting their existing models. And there is the possibility of large investments in EVs driving an Osborne effect which tanks sales of current models. So they keep refusing to fully commit. Meanwhile, startups with no legacy costs have no such issues.




My bet is Honda, Fiat/Chrysler and Suzuki are off that list in a decade. Tesla and BYD make it on. The third addition is tough to guess. Toss up for me between Geely and SAIC.

These projections make me wonder if we are not going to be screwing ourselves over in the long run, by allowing some companies that really know how to make quality cars (well, maybe not Chrysler or Suzuki so much) languish, while embracing cars that look enticing when new, but have shoddily-built bodies that will rust prematurely or have battery packs/electronics that will suffer durability issues due to water intrusion, corrosion, etc. Nothing that comes from China has impressed me in those terms as yet, though perhaps that may not be the case moving forward.

I do worry that the auto industry may be suffering from the 'new iphone' syndrome, though.

On another note, my god a lot of the newer EVs are heavy SOBs. In general, when I've looked at specs a lot of them are 5000+ lbs, which I suppose is due to larger battery packs, but they seem to be suffering from the same thing IC cars have been for a while, but even more so. It seems a little ironic that cars which are supposed to save the environment are also heavy pigs that require much more energy to haul them around than if they were much lighter, obviously.

[thewave46]

Originally Posted by OldDartmouthMark

These projections make me wonder if we are not going to be screwing ourselves over in the long run, by allowing some companies that really know how to make quality cars (well, maybe not Chrysler or Suzuki so much) languish, while embracing cars that look enticing when new, but have shoddily-built bodies that will rust prematurely or have battery packs/electronics that will suffer durability issues due to water intrusion, corrosion, etc. Nothing that comes from China has impressed me in those terms as yet, though perhaps that may not be the case moving forward.

I do worry that the auto industry may be suffering from the 'new iphone' syndrome, though.

On another note, my god a lot of the newer EVs are heavy SOBs. In general, when I've looked at specs a lot of them are 5000+ lbs, which I suppose is due to larger battery packs, but they seem to be suffering from the same thing IC cars have been for a while, but even more so. It seems a little ironic that cars which are supposed to save the environment are also heavy pigs that require much more energy to haul them around than if they were much lighter, obviously.

I'm curious too. I do think the auto industry is going to go through something like it did in the 1970s. The median car of 1970 and the median car of 1990 were quite different beasts. A carbureted body-on-frame, V8-powered, rear-wheel-drive median sedan gave way to a unibody front-wheel-drive four-cylinder one.

Do I think all automakers other than Tesla, VW or the Chinese are doomed? No. I'm more inclined to think of Tesla more in the sense of Blackberry circa 2007. First mover with the best product until Apple decided to really get into the game.

Automaking is hard. It gets harder as scale goes up.

[Truenorth00]

Originally Posted by OldDartmouthMark

These projections make me wonder if we are not going to be screwing ourselves over in the long run, by allowing some companies that really know how to make quality cars (well, maybe not Chrysler or Suzuki so much) languish, while embracing cars that look enticing when new, but have shoddily-built bodies that will rust prematurely or have battery packs/electronics that will suffer durability issues due to water intrusion, corrosion, etc. Nothing that comes from China has impressed me in those terms as yet, though perhaps that may not be the case moving forward.

I'm guessing you have no issues using electronics and appliances from China. A good chunk of your car probably is from China right now.

As for quality, keep in mind, we have zero exposure to actual Chinese cars. So it's hard to judge. We have not seen much from the major producers who actually do joint ventures with major automakers. I do find it interesting though that Tesla's exports from Shanghai are noted too be substantially higher quality than their cars made in the US.

Originally Posted by OldDartmouthMark

On another note, my god a lot of the newer EVs are heavy SOBs. In general, when I've looked at specs a lot of them are 5000+ lbs, which I suppose is due to larger battery packs, but they seem to be suffering from the same thing IC cars have been for a while, but even more so. It seems a little ironic that cars which are supposed to save the environment are also heavy pigs that require much more energy to haul them around than if they were much lighter, obviously.

This should get better over time. Batteries increase energy density by 6-8% per year. It is telling though, that despite how heavy these cars are that they are way cheaper to operate. That speaks to how much energy is wasted with traditional ICE vehicles.

[Truenorth00]

Originally Posted by thewave46

I'm curious too. I do think the auto industry is going to go through something like it did in the 1970s. The median car of 1970 and the median car of 1990 were quite different beasts. A carbureted body-on-frame, V8-powered, rear-wheel-drive median sedan gave way to a unibody front-wheel-drive four-cylinder one.

This is going to be way worse than the 70s. Again, people seem to be vastly underestimating the scope of this transition. An electric vehicle is not just a car with batteries and motor swapped in for reciprocating cylinders and a gas tank. It's an iPad on wheels. And that means that automakers who never thought much about software now have to do software engineering on par with Apple or Google.

Originally Posted by thewave46

Do I think all automakers other than Tesla, VW or the Chinese are doomed? No. I'm more inclined to think of Tesla more in the sense of Blackberry circa 2007. First mover with the best product until Apple decided to really get into the game.

Automaking is hard. It gets harder as scale goes up.

Disagree. Tesla's lead is actually growing. Not shrinking. They are becoming experts at the machine that makes the machine. Look up how much their plant development has improved between Nevada, Shanghai and Berlin. Their plants are getting larger, going up faster, with higher efficiency and much better product quality and higher output. Meanwhile the batteries are getting better and lighter. The software is improving and the cars are getting lighter with much better actual mechanical design. Just go look at vehicle efficiency and compare Teslas to any competitor vehicle in the same class. Teslas always have the best mileage. And this is before we even discuss the whole situation with charging where Tesla basically has no real competition.

I really want to see Tesla have real competition. But unfortunately, I can't see it right now. Maybe some of the Chinese OEMs. But even players like VW are still at least half a decade behind Tesla. And other than VW, nobody is really putting in the capital to catch up.