The prescription of imminent demise of GM and Ford seems a little premature, imo. I watched that video of Chinese EV companies being only at 50% capacity, but no source was given. Even if that is true, only 6% of China's new car sales are electric vehicles. It is hard to believe that they could completely overtake the US auto market in 5 years. A few points wherein GM and ford are not dead yet:
-In rural/conservative america the big truck is king. Those people do not care whatsoever about EVs and will continue to buy big trucks without concern for the next 10 years. Ford and GM have a lifeline to keep them solvent.
-In America as well, the Road Trip for summer or thanksgiving or christmas is very much a real thing. People drive 8 hours to visit family one way. You cannot underestimate the need from americans to drive far on a whim, at least once per year. Currently, EV's simply do not have the range and do not have the recharge time. I have seen nothing hitting scale production in the next 5 years that completely solves this problem. You could argue that maybe people would just rent a car for their big road trip, and sometimes people do. The rental car market could not possibly absorb the demand of 25% of the US renting a car for a week during november, it just cannot happen. Therefore, I believe the current prospectus of the average american family is 1 electric vehicle 1 gas vehicle. Will people buy new internal combustion vehicles? Suburban moms are still having children and grandchildren. It remains to be seen, but I think there will still be purchasing sent toward gas for the next 5 years. This would also keep Ford and GM afloat.
- EVs will see a huge expansion in the next 5 years assuming the US congress manages to pass their EV tax incentive plan. Ford and GM will largely not benefit I predict, I agree, they are Laggards.
- I would not be surprised if the US eventually creates protective markets for GM and Ford to ensure their survival. Simple things like needing to manufacture the car in america, and all the components will face a carbon tax unless they are bought from US companies, is a real possibility. This kind of protectionism is needed to support the US steel industry if and when it switches to greener steel, more costly than legacy production techniques, if only as a result of capex. As of now, the US has maintained Trump's 2018 steel tariffs, and I don't hate that, even as
steel end-user companies do. So, I would be interested if these Chinese EVs start setting up factories in the United States, in the same way that Toyota and Honda and VW did long ago. In this way the legacy car companies have a big advantage in paperwork/institutional knowledge for the US market.
I am fine with supplying Ford, GM, and VW. Those are solid companies. I would like to supply Tesla as well, and I believe one day we will. I think this is great news. I think ford and GM will experience lean f*ing times come 2025-2026 but will not go out of business. I do think these companies need to wake the F up and start building batteries at scale, and maybe they are. GM at least has had electric vehicles as long as Nissan has; the Chevy Volt has been around since 2011 and is produced at modest scale, 20k vehicles per year. Yeah you want to see a 1 and two zeros ahead of that number, but its not like GM is muttering "how do I make a battery plant, i have no idea".
Maybe in 5 years I will be surprised, but I will wait and see. Boomer youtube videos are such a hoot to watch, you'd think the world is ending in 100 different ways.
(20min delay)