Battery Electric Vehicle News / Enjoying the Transportation Revolution

Grumpy_chap

JKenH said:

Tesla are on track to sell around 850,000 cars this year. Global car sales in 2020 were around 64m units so Tesla’s market share currently is around 1.3%.

VAG and Toyota keep trading the top spot with around 8% of the global market each.

Thank you, and I've looked at the source link.

I am unclear whether the link is to percent of market share by value or percent of market share by number of vehicles sold.  The two could be quite different.

The previous article earlier in the thread seemed to be suggesting that Tesla could take 25% by number of vehicles sold.

Given that no one manufacturer currently has greater than 10% of global market share, the idea that any one manufacturer could take 25% within the next five years seems somewhat implausible...

JKenH

Tesla, electric SUVs get poor scores from Consumer Reports

Vehicles from Tesla Inc and electric sport utilities from rival brands are among the least reliable models sold in the United States, a reflection of the risks of new technology, Consumer Reports said on Thursday.

https://www.reuters.com/markets/asia/tesla-electric-suvs-get-poor-scores-consumer-reports-2021-11-18/

Grumpy_chap

This will no doubt be hailed by *some* in the media as an anti-EV story:
https://www.bbc.co.uk/news/technology-59357306

The reality is, any car with this method of operating (and I believe there are some ICE's adopting the same) is vulnerable to the same type of event.  I suppose it would defeat the benefit of the technology for those that like the convenience if the driver had to carry around a key or card as well as a back-up.  Maybe the phone needs to have an "emergency" key function built in that is not dependent on the live app service over remote service.  How do these systems work in an area with poor mobile signal?

It actually links totally to the report immediately above about Tesla being amongst the least reliable brands and the "risks of new technology".  Is it the technology of being an EV that is unreliable, or simply the electronic wizardry outside of being an EV?  Inherently, an EV is simpler and should be more reliable than an ICE as I understand it.

Martyn1981

ABrass said:

Tesla are on track for just under 1 million vehicles this year. The global market is around 70 Million.

Next year they're expecting to be closer to 2 million vehicles as they're opening two new factories this Winter, and over 2 million in 2022 once those factories are fully up and running.

I don't think the ARK theory is worth paying much attention to. In theory it might be possible, but not probable.

It does sound kinda crazee, but as with most things context is important. Just some thoughts.

It's hard to predict how the global market will change over the next 5yrs. Both Covid and the chip shortage have impacted sales, but could also be hiding a drop in demand for ICEV's. Not necessarily folk who are ready to buy a BEV, but some that may now be concerned about buying an ICEV, and may delay purchase whilst they see how things sort out.

Perhaps by late 2022 / early 2023 we will start to get a better idea of how the trends are moving, but IMO, it might be possible for sales to drop to around 40m by 2026, perhaps 50% BEV's, due to the Osborne Effect, especially if BEV's get closer to purchase price parity. Of course much then depends on BEV capacity expansion, and 20M BEV's by 2026 may be overly optimistic. It's hard to know how folk will react, will they buy 10m's of ICEV's regardless, unafraid of the potential stranded assets, or will they panic completely and we'll see a cliff edge. We also need to consider reductions in ICEV production, as costs rise (diseconomies of scale). Will all manufacturers reduce output and risk selling at a loss (unlikley), or will we see some makes/models disappear completely, helping to maintain salse for the others?

So a market as low as 40m, would require Tesla to sell 10m for a 25% market rate, or 8m for a 20% share (I'll come back to that). Tesla will hopefully sell ~ 900k to 925k cars this year. They should end the year on an annualised production rate of ~1.2m. Possibly sell 1.6m+ next year, depending on the ramp up of Giga Berlin and Austin, and close the year with an annualised production rate of ~2m. Between the 4 large factories, they should be able to expand to ~6m pa.

So 20-25% in 2026 is theoretically possible with the addition of a factory or two, but would be tight, and that's based on a significant reduction in ICEV demand, and overall sales, which may not rise back up till 2030(ish).

We also need to consider Cathie Wood's past success. Her company Ark Invest specialise in disruptive technologies. Back in 2019 (and earlier) when many were forecasting Tesla's bankruptcy, and the share price (pre-split) went under $200, she said that it would go to $4,000, (later upped to $7k), over 5yrs. At the time she was laughed at. She explained that when a disruptive technology has been flat (and Tesla had been relatively flat for years) it either goes bust or breaks out. The longer the flat period, the bigger the breakout.

But, sticking with context, we really need to consider what Kathy Woods actually said:

“If Tesla is the first to be successful in autonomous in the United States, we’re beginning to believe that not only will Tesla take that biggest share of the electric vehicle market, we believe that it could take 20% to 25% share of the total auto market in five years,”

Crucially here we need to consider autonomous vehicles, especially TAAS or Robo-taxi's. If Tony Seba / RethinkX are correct, then for many people a robo-taxi may become cheaper to use than owning a car, possibly even cheaper than continuing to own an existing car. This is a big issue, and can be argued in many ways, but certainly for urban and then suburban households it could prove true. It would also probably have a very swift impact on the ownership of 2nd, 3rd ..... etc cars at each household.

So Tesla hitting 20%+ of a much reduced global car market, possibly with an even greater acceleration of production to meet robo-taxi demand ....... possible, certainly possible, but there are a lot of factors in play here, and as I mentioned earlier, I think it may be another year+ before we start to get an idea on how they may play out. But even then, since we are dealing with major changes to technology and the issue of car ownership v's TAAS, we're still not going to be able to predict too accurately since change is likely to be exponential not linear.

In summary ...... your guess is as good as mine!

orrery

The problem is that people have preferences that are sometimes not that logical.

I could happily afford a Tesla, but I don't want one, for any number of reasons: I've seen reports of quality issues, I don't like American cars (I'd rather not buy American, if I can avoid it), I'd rather have buttons and switches and I couldn't care a monkeys about performance.

People want their BMWs, and their Mercs, and their Porches.

Grumpy_chap

This whole "Tesla could be 20-25% of global automotive sales by 2026" thing.  Ignore the time-frame, but is there any other consumer product where one company has anywhere near that level of dominance? 

I can't think of any such situation, but I may be failing to combine linked brands.

I can't see global car sales falling to around 40 million from 70 million (just over half?).  Even if there is a sustained fall in established markets as Osbourne effect kicks in, demand from growing economies is likely to outstrip that.  Plus, the economic impact of such a drastic fall in a sustained way (i.e. COVID extracted from the equation) would likely see some governments step in to stimulate demand.  Unless some other high-value product (can't think what) emerges to take the slack in the economy and employment capacity.

If the idea of Tesla reaching such a high level of market-penetration is in part dependant upon vehicle autonomy, the the car becomes simply another consumer electronic item.  At that point, we can imagine that other consumer electronic companies would enter the fray churning out cars much the same as they do smartphones.  Perhaps Tesla will start selling phones as well?

Martyn1981

Crucially it's all theoretical at this stage. Whilst Tesla is aiming for 20m cars pa by 2030, when the market may have  transitioned to almost all BEV's and recovered to perhaps 80m-100m, that desn't mean it will happen. It also depends on cost and speed of production. At the most bullish end, based on the gross margins that Tesla earns (around 3x industry standard), there are suggestions that they may be able to sell cars at a price lower than the production cost of other manufacturers this decade (who are still playing catch up) if they pull that demand 'lever'..... but I think that sounds too extreme.

Regarding TAAS, the sad part for those who want to buy a Tesla, is that they may stop selling them, since as a Robo-taxi their revenue may be several times higher than the sales price. Again, extreme example of what may be possible. But if TAAS does take off, then expect annual sales/production of cars around the World to drop dramatically.

I don't know anything about Tesla selling phones (though Starlink might capture a massive share of the internet service  market), but the expectations around Robo-taxis is that Tesla would probably license their software to other manufacturers, which would massively speed up the rollout, and transition to TAAS, and Tesla's primary aim/goal of accelerating the transition to sustainable transport. Of course so much of this depends on the continued 'machine learning' of Tesla FSD, and their large Dojo computer plans. Plus of course it is also depends on the sheer volume of mileage carried out both by Tesla's in general, and particularly the growing unpaid fleet of people helping to develop and train FSD through the Beta testing programme.

Loads of theoreticals, possibilities, and unknown unknowns (I assume), so for me, it's pretty much impossible to guess at what will happen, but hopefully we'll get an ever clearer picture over the next few years.

QrizB

Grumpy_chap said:

This whole "Tesla could be 20-25% of global automotive sales by 2026" thing.  Ignore the time-frame, but is there any other consumer product where one company has anywhere near that level of dominance? 

Apple with the iPhone has a 15-20% share of the global market with only four(?) models. Samsung has roughly twice the market share but has more models than I care to count.

ABrass

Grumpy_chap said:

This whole "Tesla could be 20-25% of global automotive sales by 2026" thing.  Ignore the time-frame, but is there any other consumer product where one company has anywhere near that level of dominance? 

I can't think of any such situation, but I may be failing to combine linked brands.

I can't see global car sales falling to around 40 million from 70 million (just over half?).  Even if there is a sustained fall in established markets as Osbourne effect kicks in, demand from growing economies is likely to outstrip that.  Plus, the economic impact of such a drastic fall in a sustained way (i.e. COVID extracted from the equation) would likely see some governments step in to stimulate demand.  Unless some other high-value product (can't think what) emerges to take the slack in the economy and employment capacity.

If the idea of Tesla reaching such a high level of market-penetration is in part dependant upon vehicle autonomy, the the car becomes simply another consumer electronic item.  At that point, we can imagine that other consumer electronic companies would enter the fray churning out cars much the same as they do smartphones.  Perhaps Tesla will start selling phones as well?

Glasses, Diamonds, Microchips, Cloud computing. There's plenty of markets which are dominated by one, or a small number of companies.

Martyn1981

This heading tickled me, because for a year or two now, most of the EV/RE channels I follow on Youtube have been predicting that the legacy automakers will be constantly revising up their plans and projections for EV's, especially BEV's.

Perhaps they couldn't see the writing on the wall, or more likely they feared talking up EV's too much as that could impact their ICEV sales / cashflow, much needed to fund the transition.

Expect to keep seeing such headlines, and 'doublings' throughout this decade.

Ford Doubles EV Production Plans, GM Books 18,000 BrightDrop Orders

According to Automotive News, the increased production targets apply to the Mustang Mach-E, the F-150 Lightning, and the E-Transit electric cargo van. Ford has awoken from its slumber. It is planning a new production facility and EV development hub in Tennessee and has partnered with SK Innovation to build US battery factories to power all those electric vehicles.

Before it achieves its ultimate goal of being the biggest EV producer in the US, Ford is first aiming to become the second largest behind Tesla, says Engadget. According to CNBC, whether Ford can achieve that 600,000-a-year production target remains to be seen. Over at crosstown rival General Motors, Mary Barra and her merry band are expecting to sell 1 million electric vehicles by 2025 and are also ramping up production by converting existing factories and building new ones in the US in coming years.