Battery Electric Vehicle News / Enjoying the Transportation Revolution

NigeWick

https://forums.moneysavingexpert.com/discussion/comment/81932014#Comment_81932014

I have to offer a quote "Stupid is as stupid does." That said, it looks a bit as though BMW are learning the lesson.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81932614#Comment_81932614

Are Skoda offering excelllent EVs at a reasonable price?

When we purchased our TM3, we did look at the Skoda EV's and they were very nice (I'll even use your adjective "excellent") but the price was significantly higher than the TM3.

We purchased in 2023 and I have not looked at the comparative prices between the two brands more recently.

JKenH

https://forums.moneysavingexpert.com/discussion/comment/81932614#Comment_81932614

But do they make a profit from BEVs? This article from October 2024 suggests that BEVs are still being cross subsidised.

Electric cars don't make a profit for most brands: Skoda sales boss

There are “very few” manufacturers currently making money on electric cars, with efforts to improve profitability key to establishing the technology for the long-term, according to Skoda’shead of sales and marketing Martin Jahn.

Referring to it being “only natural” to bring prices for the brand’s new Elroq small SUV broadly in line with the petrol Karoq, Jahn said customer expectations are that prices will start to align.

 “As CO2 limits are going down, we need to increase the number of electric cars sold, so it’s only natural that we are trying to decrease the price,” he stated. “Unfortunately, the costs are not decreasing as fast, so it is affecting the profitability of electric cars. Profitability of electric cars is a challenge for everybody; there are very few brands who make money with electric cars.”

He added that efforts are being made to reduce costs across the whole company, but the battery is still the dominant issue. “If you've got to bring the price down to make people buy them, we have to look at all costs – the company, the management costs at all levels. We have to implement more artificial intelligence in our processes, reduce the number of people in general, but the cost of electric cars is mostly about [the] battery. 

“If more than 50% of our cars are electric, and we still have this low profitability, then it will become unsustainable. So how do you make them more profitable?” he continued.

“The battery is what drives the cost of the electric car, so we have to work on the battery costs. We cannot and we do not want to sacrifice quality for the customer.”

Link below

Electric cars don't make a profit for most brands: Skoda sales boss | Auto Express

Grumpy_chap

"Electric cars don't make a profit for most brands"

Statements such as this need to be taken in a cautious way, especially where the statements may be made by businesses with a short-term vested financial interest in making the financial challenge look far greater than it might otherwise look as part of a lobbying process to seek favourable tax or other incentives from Governments.

A big part of the accounts for the businesses showing a profit or loss per unit is the depreciation treatment of the capital investment to develop a new technology. There is a great deal of variability and choice as to how this can be treated and the timeframes across which the upfront costs are spread in to profit and loss accounts.

Magnitio

https://forums.moneysavingexpert.com/discussion/comment/81932686#Comment_81932686

I provided a link to an update from Skoda this month. You've quoted from October 2024 when they only had one model and had invested heavily in the Elroq and Enyaq update. There has been a significant reduction in the cost of batteries in that time and their EV's have been very successful in the last 15 months.

Magnitio

https://forums.moneysavingexpert.com/discussion/comment/81932645#Comment_81932645

You can get the 82kWh Elroq from about £32k. The 55kWh from around £26k. The Enyaq is about £2k more. They don't necessarily have the performance or efficiency of the TM3, but they are better in other areas.

https://www.autocar.co.uk/car-review/skoda/elroq

Netexporter

Like having proper knobs and buttons instead of gimmicks hidden in one screen.

JKenH

https://forums.moneysavingexpert.com/discussion/comment/81932839#Comment_81932839

I did and I pointed out it was from October 2024. There was nothing in the article you posted that said Skoda was making a profit from BEVs. They sell BEVs and they make a profit but that’s not the same as making a profit from selling BEVs.

JKenH

https://forums.moneysavingexpert.com/discussion/comment/81932772#Comment_81932772

There was nothing in the article I linked which sounded like a plea for more government help. The problem Škoda pointed out was that it is battery cost that is making BEV manufacturing unprofitable compared to a similar sized ICE car. You can read anything into the article you wish. Other manufacturers have said much the same and written off tens of billions of investment in EVs. If you want to believe that that is just political manoeuvring then you are quite entitled to do so. Personally I doubt that companies would write off billions unless they saw no hope of recovering those costs.

Škoda did not say they they are writing off billions but they are operating in the same marketplace as other OEMs and and it is difficult to believe that they have found the magic sauce that makes BEVs profitable that the others are missing.

VAG (which includes Škoda) has redirected something like $97bn of investment earmarked for EVs into developing new ICE models. Why would they do that in a marketplace that incentivises BEVs if they were making a profit on the BEVs they are selling?

Martyn1981

https://forums.moneysavingexpert.com/discussion/comment/81932632#Comment_81932632

Yep. And of course it's a tough decision for the leadership today, as they need to appear to be profitable, …. today. That may well be more important to them (individually), than the long term future of the company. Which seems daft to say, but given that the Tesla Model S came out in 2012, and was cost competitive within its market, and profitable*, it's been amazing to watch legacy auto drag their heels, and risk long term failure.

If anything, rules and regs in the UK/EU would help with the transition, by making all companies play the same game, and not fear one or two companies ignoring the huge expense of transitioning to EV's. It's going to be rough, expensive, and painful for legacy auto, but dragging it out now, especially with Chinese competition coming in, could be fatal.

[*Note. Tesla was only profitable for one quarter, in 2013, but this coincided with the succesful ramp of the S. Then they went negative again, as they started expending monies on the production ramp of the X, before again going positive for one month, after ramping up production, but before the necessary expenditure for the Model 3. So each model was profitable, apart from the earlier original Roadster, which was more a proof of concept.]