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-   -   Electric vehicle demand weaker than initially expected, say auto industry execs (https://www.team-bhp.com/forum/electric-cars/272604-electric-vehicle-demand-weaker-than-initially-expected-say-auto-industry-execs-3.html)

Yes, I am already aware of this. As other OEMs take an EV-only strategy, we may continue to see Toyota continue to post record sales because consumers who want ICE will have fewer choices increasing their ICE marketshare.

My bet is that this kind of financial results will only delay their EV switch dooming their position on the Wright's curve which will ensure they cannot make a good EV at a competitive price.

Toyota's finances are already in a precarious state. https://www.team-bhp.com/forum/inter...any-world.html

The article that you shared clearly calls out the statement of the CEO that demand for batteries of luxury Tesla EVs is falling. Now why is demand for luxury EVs is dwindling? - After the initial euphoria, there are not going to be alot of growth for luxury models and these will be the most affected in tough economic conditions. This is the same for ICE cars as well. The budget car buyer drives the mass sales for automobiles company not the luxury car buyer.

For Tesla's budget cars, Model 3 and Model Y batteries are provided by CATL and Panasonic. There is no statement from Panasonic or CATL on slowing demand for these cars.

CEO Statement from the article -

All bosses, company boards understand is financials (specifically profit margin) and its impact on "stock price". Stock price is what defines the net worth of individual owner or market cap of a company. It helps the companies in the getting more financing or get strategic investors or more.

Now the article mentioned by other BHPian and you is alluding to this point only - Capital expenditure and its impact on profit margin. Now this is where the incumbents of the industry (read Toyota, Honda, Ford, GM etc) are facing a challenge against the new entrants (read Tesla, BYD etc.)

According to me, the incumbents were complacent over the years to not invest into the EV tech. Some even tried to kill it. Now they cannot stop time and catch up to the early movers as they are far behind. So what are they doing to address this situation, they are investing heavily in ramping up EV production and at the same time are using all opportunity to down play EVs. I know you will say that the statement is contradicting but that is what these players are doing. Why? - I will explain -

If they don't down play EVs today, more and more people will want to buy EVs and as they don't have capacities or the portfolio of EVs to sell. Buyers will go to companies (Tesla, BYD etc) which have options available and they will loose out on overall sales. These non EV sales are crucial for them to further fund capital investments in EV production.

No analysis is good without some examples. So examples of double faced behaviour of these top companies

Stellantis -

4th April - Future of electric vehicles limited by material scarcity, says Stellantis CEO - link

26th Oct - Stellantis buys 20% stake in LeapMotors for 1.5 billion euro investment - link

My take - If they were so concerned about material availability, why invest Euro 1.5 billion in a Chinese company?

Ford -

1st-Aug - Ford Restarts Expanded Rouge Electric Vehicle Center; F-150 Lightning Production Capacity Tripled by this Fall - link

26th Oct - Ford will postpone about $12 billion in EV investment as buyers become more cautious - link

My take - If it was the buyer being cautious, why are they ramping F150 lightning production? Why is there a still 3 month wait for a F150 lightning? Actual issue is that they are not able to generate a profit on electric vehicles where as Tesla is able to post profit. So they cannot shove more money into it till they get to some level of profitability into it.

Summary

The incumbent are trying to achieve what Tesla achieved in 10 years in nearly half the time and they have a more complex challenge than the ones who started directly on EVs or made a early investment move into EVs

You missed mentioning the 31% increase in EV sales. If they are feeling lack of demand, why are their EV sales soaring?

Toyota cuts EV sales expectations by 39 percent as its profits soar thanks to hybrids.

In total, the Toyota and Lexus marques are expected to manufacture a record 10.1 million vehicles this fiscal year, while the outlook for consolidated global retail sales has gone up to a record 11.38 million units in the current fiscal year.

Toyota Motor Corp.’s chief financial officer Yoichi Miyazaki :


Link

I had seen this documentary more than a decade back. You must understand that this was in early 1990s. The scenario then was very different from what it is today.
If you look beyond conspiracy theories you will begin to see a lot of reasons
1. Global warming was beginning to gain attention but it was not considered a crisis as it is today.
2. Fuel costs were way cheaper.
3. the car itself was no where close to what it today's EVs are. They had lead acid battery and had barely 100kms range. Even today with few hundred Kms of range people are reluctant, you can only imagine how bad that was to market.
My point is it was a different time, different scenario. So, let us focus on what is happening today otherwise the discussion will be irrelevant

Tell me at least one way any company or a group of companies can kill EV? Because EV may not be selling as much as ICE , but people have taken to it, and there is real growth out there and future is EV.
Not to mention we live in a time where EV is inevitable. some of the reasons for that:
1. climate change is a crisis now
2. Governments across the world have begun setting timeline to stop or limit sale of ICE vehicles (or are considering the same). This maybe done for climate goals or energy security
3. Fuel costs keep increasing and oil will not be abundantly available forever

Despite that tesla has lost market share, they have only around 50% of new car registrations in US market despite price cuts (BTW, those price cuts are taking away the huge profit margins Tesla had before). Clearly buyers are comfortable with the vehicles from incumbents.

BTW I am curious: how does the comments (by some companies) about EV sales in current economic scenario affect sale of EVs? If a person want to buy an EV, and it fits his requirements and use case, he is going to buy an EV. He wont think "oh! EV sales are low. let me get an ICE instead", will he?

I will give you examples -

International Context
GM - Came out with Spark EV in 2012-13. Produced it till 2016-17 and then launched Bolt EV producing it till date. Both cars have Lithium Ion batteries. In last 10 years, GM has had 1 EV model at sale at any given point of time. Cumulative EV sales across last 10 years was near about 200,000 cars. To put it in perspective Tesla sells 400,000 plus Model 3 in one quarter that is just one model in their lineup. Both companies had the exact same time to make EVs success but did they have the same amount of will?

Nissan - Came out with Nissan leaf in 2010 and has been able to sell around 400,000 cars in 12 years. And in 2022 end, they came with the second EV model - Ariya. Again the same question, did they have the will to make EVs a success?

Indian Context

Mahindra - Bought Reva in 2010. Started selling e20 didn't do any great numbers. They created eVertio which also did nothing and then there was no progress till 2022 when they started selling XUV400 which was a dismal product in the current market context.

As compared to this -
Tata started the journey in 2019 with making Tigor EV for fleets (same time as eVerito). Today they are consistently selling 5,000 EV cars per month and Mahindra is selling a measly 800 EV cars.
MG came up with COMET, an exactly Reva/E2O style product and they are doing 1000 cars a month consistently. Mahindra discontinued the product and is not even thinking to revive it.

I ask again did Mahindra buy Reva with a will to make EVs a success?

50% of new car registrations in US market for a 10-12 year old car company is astonishing according to me vs incumbents with 100 years of legacy.

They are not saying that EV sales are falling so don't buy an EV. They are saying that EVs are expensive and are leading to losses for them so it is better to buy ICE cars where as another company which is EV only is able to sell EVs after multiple price reductions with a profit margin.

Toyota believes going Hybrid is a transition to EV, rides the hybrid boom to overtake Tesla's profit margin.

Winning over the early EV adopters is easy. Sustaining demand from regular buyers who just want a car that works best for them, regardless of powertrain type, is a lot harder, as many companies now realize.








Link

This Verge articles sums up a lot of points well:

https://www.theverge.com/23934889/el...elays-politics

After 25 years of selling the technology, they have 7% market share. EVs which started selling in 2010 with mass market cars introduced by Tesla in 2017 have a 9% market share

My question why did it take them 25 years to get the hybrid boom where as Tesla could get EV boom in one third the time.

Link for the data point

Toyota can enjoy the profit margin as much as they want. They need to make huge capex to retool their production lines for mass EV production, they can postpone that expense as much as they want but it is going to be a reality one day. At the same time Tesla will be optimizing their production further and bringing down EV costs.

Absolutely, Toyota will end up like Nokia, you have to prepare for the future, history has shown what will happen to the companies which failed to adapt to the market.

Japanese car manufactures are very reluctant to adapt newer technologies I think.

As much as I hate their silly games when it comes to EV, one should admit that Toyota is the leader when it comes to hybrid. So I will have to disagree with the above statement. I hope they show that initiative with BEVs instead of giving a bouquet of unworkable technologies like Hydrogen cars. How difficult should it be for them to get a EV platform when they mastered a much more complicated hybrid technology. Even some one like Tata, a much smaller fish, could get a decent number of EVs out of their stable.

All said and done if they wakeup right now they can really democratize EVs because they are after all the biggest car makers.

I have already shared my thoughts and shared some facts, and I dont want to continue this discussion. But this post is just to clarify somethings which may have been misunderstood.
It should have been clear from my post, but I will explain since you did not understand.
I was responding to another post which which said the incumbents want want to kill EV cars. That does not mean they want to stop or kill their own EV models, but sabotage the EV market/technology in general. I have clearly explained -in my previous post- why this is not possible in today's world.
If incumbents stops their EV production or tried to sell half baked products, what will happen is that Tesla and BYD will fill that gap. So, it is not possible to ignore EV anymore.

My mistake.
What I meant to say was (re-phrased below, see underlined)
Despite that tesla has lost market share, they have only around 50% of new EV car registrations in US market despite price cuts (BTW, those price cuts are taking away the huge profit margins Tesla had before). Clearly buyers are comfortable with the EV vehicles from incumbents.
To clarify again: this is only for new EV cars (ICE not included).
Tesla with its early lead had previously dominated this market. I would say the incumbents are doing good - considering many of their products are 1st or 2nd gen. So, it is against their interest to slow down now.

Please note that many of the models from incumbents are new, and tooling investments and R&D required to get these products would have been huge and their EV division is not going generate profits in the short term. This is how things are. When there is a huge shift there is huge investment required. Currently, they fund the EV division from their ICE division revenue. I dont think anyone is expecting EV profits from day 1.
Again I dont think just because someone says EV sales are not good, people are going to buy ICE cars. Someone who wants an EV, and it fits his use case will buy an EV.

Adding a link to a good article: https://www.moneycontrol.com/news/op...-11623391.html

VW puts east European gigafactory plans on ICE, due to low demand for EVs.

The company has already confirmed plans for three gigafactories in Germany, Spain, and Canada.

VW Group’s CEO, Oliver Blume:

Link

Two big reasons making people cautious with EV are range anxiety and the perceived high expenses after 8-10 years. Unlike ICE cars, an EV cost is mostly made of batteries alone.

While the range anxiety can be hopefully be addressed in next few years with cars boasting of 500-600km real world range, there is still a concern on the car going scrap after 8-10 years due to battery health. My 2 year old iPhone is at 85% battery health, so I wonder how an EV can be any different.

On the other hand, govt/lobbies are making sure ICE vehicles too get scrapped after few years to ensure we are not having any choice in future.

Can't compare phone batteries with EV batteries. Better tech in the EV batteries. Temp regulation in EV batteries and also finally, the number of charge cycles. Your phone will go through at least one charge cycle a day. minimum. Most EVs will do that once a week. So, if you have 85 percent health after about 730 charge cycles, the ev battery would be 14 years old, and would still retain better health because of the temp regulation etc.

Do think we are getting misguided by the fear-mothering of the ICE lobby - especially Japanese auto makers who for Japanese public policy reasons (the need to defend the ICE focussed auto components sector) are keen on stymying the shift to EVs.

Battery life is not something to be concerned about on EVs. There is plenty of real word data to show that degradation is negligible even after 1000 charge cycles - or 250,000 km of real world range on something like a Nexon EV.

Charging in apartment blocks with covered parking is not a problem - most sensible societies are permitting people to instal chargers in their allotted slots connected to either their existing meters or to dedicated EV meters (if they have space available) which get concessional tariffs in cities like Bombay.

Range is a problem for those who commute largely on highways for hundreds of km per day - but not for most urban residents and those whose highway drives are limited to Bombay to Poona. And even the highway warriors can use EVs with some planning at the cost of longer journey times.

And at least in India, for any vehicle other than the sub 4m segment, EVs are the better economic deal, since GST is 5% instead of 50% and registration is 0% instead of 20%.

So is global adoption of EVs slowing due to current high interest rates? Of course! But does that have any effect on whether you should buy an EV or where EV adoption will be 10 years from now? No! EVs are the future. And for almost anyone in urban India, they are probably the best second car even today.

Would I buy an EV as my sole car? Probably not - but many people can and have done it and don’t see it as a big deal. Am I putting my money where my mouth is and buying an EV as my next car? Yes - will post details on this forum hopefully sooner rather than later.