EV Discussion thread

JKenH

ABrass said:

Demand isn't static. Reduced waiting times and the massive price cuts will boost demand. Why worry about this, Tesla aren't going to go bust and the reduced price is good for everyone.

If Tesla start a price war it will affect all EV prices. Yes, that is good if you are a first time EV buyer. However it is having a knock on effect on used prices. As new EVs become cheaper used ones fall in value and people may perceive they have lost out as their car falls in value even though the next one they buy will be cheaper. Potential used EV buyers (like me) may expect prices to keep falling 

Used Tesla prices continue to tank in January as experts assess big impact of new price drop

https://cardealermagazine.co.uk/publish/used-tesla-prices-continue-to-tank-in-january-as-experts-assess-big-impact-of-new-price-drop/277749

The price war may ultimately be bad for the EV industry as it is fellow EV makers who are having to cut their prices as they are the ones in immediate competition with Tesla. That reduces their profits and potentially makes them less viable. 

The argument is sometimes made that lower EV prices will assist migration from ICEVs. This may be true to an extent but perceived higher EV prices might be just an excuse (one of many) for those who want to remain committed to ICEVS. There is still a die-hard ICE market and several ICE sectors where there is no (currently) viable EV alternative. (How much, for example is the closest EV equivalent to a Kia Picanto? The closest  equivalent is the Fiat 500 electric which starts at £26,195 whereas the Picanto is £12,480. 

EV price cuts may inadvertently benefit Toyota and the other Japanese manufacturers who are not yet committed to them as they can maintain ICE prices and profits while their EV competitors try to undercut each other. Eventually everyone will have to move to EVS but, for the time being, there are still healthy profits in ICEs.

The same can’t be said for EVs. Tesla and perhaps BYD are making profits right now but a price war doesn’t  help them with future investment plans. Driving down further (non existent) margins on EVs of the OEMs who also make them won’t help them either. Meanwhile Toyota et al sit on the sidelines raking in normal profits. 

It will be interesting to see if, to compete with Tesla, the likes of VAG and Hyundai/Kia drop prices across the board or just their EV models or if they decide not to bother at all. 

Magnitio

JKenH said:

MINI Electric: why Autocar readers love it

My wife refused to compromise over a replacement for her Picanto so today we bought a 2022 ex demo model to replace her 11 year old one. (Cost to change, out of interest, was exactly £10k so that calculated on a replacement cost basis depreciation has been just £1k per year.) Having bought the Golf estate for long runs I can now think about a fun EV runabout and the Mini appeals.

https://www.autocar.co.uk/car-news/advertising-promotions-mini-electric/mini-electric-why-autocar-readers-love-it

This is an advert for the Mini, albeit promoted through Autocar, so it will only report all the good things people have said about it. Most reports do seem quite favourable, apart from the range; as you infer, that's probably not a major concern for you given that you have a different car for longer journeys.

JKenH

I hadn’t realised how much of a lead BYD had over Tesla in China. BYD sales are continuing to grow while Tesla is flat lining in China.

Edit: link to source https://twitter.com/troyteslike

JKenH

On a more positive note, here is Troy Teslike’s forecast for Q1 Tesla deliveries.



 https://twitter.com/troyteslike

Edit: this was before the price cut and there will be an adjustment which is visible today to patreon subscribers 

JKenH

Tesla Records Modest Recovery in China Sales After Huge Price Cuts as Elon Musk’s “Funding Secured” Trial Begins

There are rumours that on one day after the latest price cut 80k Tesla orders were placed in China.

https://wccftech.com/tesla-records-modest-recovery-in-china-sales-after-huge-price-cuts-as-elon-musk-funding-secured-trial-begins/

Grumpy_chap

JKenH said:

The argument is sometimes made that lower EV prices will assist migration from ICEVs. This may be true to an extent but perceived higher EV prices might be just an excuse (one of many) for those who want to remain committed to ICEVS. There is still a die-hard ICE market and several ICE sectors where there is no (currently) viable EV alternative. (How much, for example is the closest EV equivalent to a Kia Picanto? The closest  equivalent is the Fiat 500 electric which starts at £26,195 whereas the Picanto is £12,480. 

EV price cuts may inadvertently benefit Toyota and the other Japanese manufacturers who are not yet committed to them as they can maintain ICE prices and profits while their EV competitors try to undercut each other. Eventually everyone will have to move to EVS but, for the time being, there are still healthy profits in ICEs.

There are many intertwined factors here but I postulate that the reduction in EV prices will result in lower ICE prices until such time as ICE's become unsustainable.

I am keen to go to an EV but the "cost to enter" has been my big challenge.
The whole market has been distorted for the past year or so, allowing ICE and EV prices to be higher than they otherwise would.  That means the adjustment this week by Tesla is really just a correction to where the prices would have been without the exceptional events.
Automotive manufacturing may be about to return to normal, according to this article:
Carmakers signal end of shortages after two years of runaway prices (msn.com)

You may recall I'd seen a Lexus ES at £32k Sept 21 and lamented that an equivalent EV (with suitable range for my needs) was in the £50k region so it was a massive delta.
When I last looked, the same ES was £40k but the equivalent EV moved towards £60k, so still the same massive delta.  With the price cuts, the equivalent EV is back to £50k or thereabouts, so the delta has been halved.  Anyone weighing the choice between an ES / 5-Series / A4 or an EV now has less of a challenge for the EV decision.
If other EV's move down in price, then that same choice will narrow for anyone deciding between an Octavia and an EV.
So, the ICE price has to move down or stop production.

Now, ICE sales are the price profile of a mature technology.
EV sales are going to follow (IMO) the price profile of a new technology, so the EV pricing today is equivalent to the CD player in 1990 and will continually fall (in real terms) leaving the ICE as redundant as the cassette player.

Martyn1981

Well ...... it made me laugh.

It seems the news is obsessed with Tesla. 

Media Report Claims Tesla Crashed Into Home, But It Was A Polestar

You can almost be certain that if a Tesla crashes and/or catches fire, it will be in the news. This has been the case for years, and crashes and fires involving other electric cars have also become big news. However, when a Polestar 2 EV recently crashed into a residential home, a media outlet called it a Tesla, and larger media outlets aggregated the incorrect content.

Grumpy_chap

Martyn1981 said:

Media Report Claims Tesla Crashed Into Home, But It Was A Polestar

I never quite understand why "EV crashed into house" or similar is newsworthy whereas that would not gain half the traction if it was any ICE.  It's not as though being an EV is in anyway linked to the driving into the house bit.

michaels

Martyn1981 said:

Well ...... it made me laugh.

It seems the news is obsessed with Tesla. 

Media Report Claims Tesla Crashed Into Home, But It Was A Polestar

You can almost be certain that if a Tesla crashes and/or catches fire, it will be in the news. This has been the case for years, and crashes and fires involving other electric cars have also become big news. However, when a Polestar 2 EV recently crashed into a residential home, a media outlet called it a Tesla, and larger media outlets aggregated the incorrect content.

Perhaps Tesla is like 'hoover' - ie a generic name (for something that sucks)

Martyn1981

Grumpy_chap said:

JKenH said:

The argument is sometimes made that lower EV prices will assist migration from ICEVs. This may be true to an extent but perceived higher EV prices might be just an excuse (one of many) for those who want to remain committed to ICEVS. There is still a die-hard ICE market and several ICE sectors where there is no (currently) viable EV alternative. (How much, for example is the closest EV equivalent to a Kia Picanto? The closest  equivalent is the Fiat 500 electric which starts at £26,195 whereas the Picanto is £12,480. 

EV price cuts may inadvertently benefit Toyota and the other Japanese manufacturers who are not yet committed to them as they can maintain ICE prices and profits while their EV competitors try to undercut each other. Eventually everyone will have to move to EVS but, for the time being, there are still healthy profits in ICEs.

There are many intertwined factors here but I postulate that the reduction in EV prices will result in lower ICE prices until such time as ICE's become unsustainable.

I am keen to go to an EV but the "cost to enter" has been my big challenge.
The whole market has been distorted for the past year or so, allowing ICE and EV prices to be higher than they otherwise would.  That means the adjustment this week by Tesla is really just a correction to where the prices would have been without the exceptional events.
Automotive manufacturing may be about to return to normal, according to this article:
Carmakers signal end of shortages after two years of runaway prices (msn.com)

You may recall I'd seen a Lexus ES at £32k Sept 21 and lamented that an equivalent EV (with suitable range for my needs) was in the £50k region so it was a massive delta.
When I last looked, the same ES was £40k but the equivalent EV moved towards £60k, so still the same massive delta.  With the price cuts, the equivalent EV is back to £50k or thereabouts, so the delta has been halved.  Anyone weighing the choice between an ES / 5-Series / A4 or an EV now has less of a challenge for the EV decision.
If other EV's move down in price, then that same choice will narrow for anyone deciding between an Octavia and an EV.
So, the ICE price has to move down or stop production.

Now, ICE sales are the price profile of a mature technology.
EV sales are going to follow (IMO) the price profile of a new technology, so the EV pricing today is equivalent to the CD player in 1990 and will continually fall (in real terms) leaving the ICE as redundant as the cassette player.

Excellent summary.

One tiny (pedantic) point, is that whilst most price reductions seem to correct the price increases early last year, I think the US cuts, are slightly more than the 4 or 5 increases they saw over a year, and may go back to [edit 2019/20] 2020/21 prices. Part of that may be to get under the IR Act subsidy price points ($55k saloon, $80k SUV/pickup), but possibly also reflect the IR Act subsidies to battery producers, earning Tesla ~$2k to $3k per car (equivalent).

I think a whole host of factors have hit at the same time, those material price spikes dropping back down, increased production efficiency, a need to ramp up demand for the higher production this year, suspected recession or similar in Europe, China and the US, and lastly a grab for marketshare now that things are getting 'real'.

I know I get a bit optimistic, and material shortages may impact battery costs, but as you say regarding new technologies, the cost trend for manufacturing will continue to fall as production rises. The learning curve or 'Wrights Law' for EV batts seems to be somewhere between 18% and 28%. So that's the cost reduction for every cumulative doubling of production.

With BEV's at ~10% last year, then they could maybe double 3x this decade (20%, 40%, 80%), so at a learning curve of 20%, that would reduce costs from 100% today to 51%. Looking good.

Just thoughts, but what a fun week this has turned out to be.