Building electric cars is only a small component of running a successful EV company in this day and age. Getting people to believe that you will be soon building many more EVs is critical, and in that field, it’s all Tesla versus VW. All that and more in The Morning Shift for November 22, 2021.
1st Gear: VW Has More EVs Not Yet Built Than Any Other Manufacturer
I enjoy the Financial Times in cutting through a lot of the bullshit around the world of electric cars, and this article “Big carmakers struggle to touch Tesla production forecasts” is no exception. Basically, mainstream automakers are rushing not just to try and build more electric cars; they are rushing to convince people that yet more EVs are coming down the road even as current demand is but a marginal sliver of overall car sales. From the FT:
For years it had been assumed that the main carmakers that build millions of combustion engine cars a year could rapidly scale up their EV production — as soon as they nailed battery technology and enough consumers showed an interest.
But forecasts for six big car groups out to 2024 indicate that Volkswagen is the only legacy carmaker on track to overtake Tesla for EV production. While the others are expected to rapidly increase the number of EVs they sell, none will come close to rivalling Tesla, according to forecasts from Bernstein, IHS and EV-Volumes.com.
Volkswagen’s Herbert Diess has for years been the only incumbent CEO taking Tesla seriously as a rival. In 2017, as head of the VW brand, he laid out a plan to “leapfrog” Tesla by 2025, touting cost advantages in scaling up production that would let VW build EVs “for millions, not for millionaires”.
But VW’s progress has been mixed. Bernstein projects the group will sell 450,000 EVs this year, short of an original target of 600,000, partly because of semiconductor shortages, which have not hit Tesla as hard.
“This year isn’t the end of the world but it’s also not quite a reason to celebrate,” said Bernstein’s Arndt Ellinghorst, who expects VW Group to outsell Tesla in EVs by early 2024.
The FT takes the case of Ford, in particular, showing it as somewhat disappointing not exactly in how many new EVs it’s making, but how many EVs people think it is going to make:
EVs are a niche but growing product. They made up just 3 per cent of the global passenger market in 2020 and Tesla delivered about half a million vehicles. But they are expected to take 11.4 per cent of the global market this quarter, according to EV-Volumes.com, while Tesla is producing at a rate that equates to about 1m a year and its factory near Berlin is just coming online.
Between 2017 and 2020, Ford’s electric vehicle production was less than 2 per cent of Tesla’s. This year its volumes have ballooned thanks to the Mustang Mach-E. Its 2021 production rate is 83,000, or 10 per cent of Tesla’s, according to Bernstein. Ford raised its forecast this week and said it would produce 600,000 EVs a year by the end of 2023 — still just half of Tesla’s forecast production. However, Bernstein predicts the figure will fall short and be closer to 450,000.
The world of EVs is all about stock market valuations at the moment, and that’s a game of betting on the future. How many EVs you actually are building and selling today is just a small piece of the puzzle.
2nd Gear: We May Be Short On EV Mechanics
Former Aston and Nissan boss Andy Palmer published an op-ed in the FT as well, which seemed mostly about trying to boost his charity that gets people auto sector internships and get some more money out of the UK government for it. Included in this piece was also a good tidbit on how many people actually know how to fix EVs at the moment:
According to the RAC, just 5 per cent of the UK’s current cohort of more than 200,000 vehicle technicians are currently qualified to work on electric cars. Given that there are over 345,000 pure-electric cars on the road (with many more hybrids), there is already a worrying lack of capable technicians. The goal of 2030 is around the corner. Let’s make sure we are ready before it arrives.
Palmer also included this set up on how the auto industry may struggle to attract qualified candidates:
As ever, this kind of lofty reconfiguration of our relationship with transport will not come without challenges. Software engineers earn good money and the very best are often lured to the top jobs in exciting technology companies that can offer generous salaries as well as multiple perks, such as on-site hairdressers, gyms and restaurants. That’s a long way from what might be available at your local garage. Ultimately, dealerships will have to compete for this talent and that may result in higher costs for the repair of electric vehicles, at least over the short-to-medium term.
I look forward to Palmer’s plan getting immediate government support, and I hope to see free hairdressers in every garage across the UK in short order.
3rd Gear: BYD’s Hybrids Are Doing Well
China is the world’s largest car market, and the world’s largest market for EVs. China also lumps all EVs into a larger category called “new energy vehicles,” which includes hybrids as well. As for those, they’re not doing too bad, as Bloomberg reports:
Last month, three BYD models were among China’s five best-selling new-energy vehicles, a segment that includes plug-in hybrids. The company’s battery-electric sales in the third quarter jumped 67%, and outpaced Tesla for the first time since the end of 2019, according to data from the China Automotive Technology and Research Center.
The Shenzhen-based producer signaled Friday it’ll seek to press home its recent advantage, outlining plans to inject $1.7 billion into its new-energy vehicle unit to improve research and operational capacity.
While the company was one of the pioneers of China’s electric auto sector, and has been producing rechargeable batteries since the mid-1990s, it owes much of its current success to the hybrid segment. Two of BYD’s best performers are DM — or dual mode — models that offer a plug-in hybrid system similar to those used by GM’s Volt or Honda’s i-MMD technology.
There is a subset of the auto world that is convinced that hybrids are still the most realistic solution to reducing emissions right now, with them being an easier step for consumers versus all-electric cars. I am a little agnostic, and I’m becoming more in line with the “the only way forward is to reduce car dependency altogether” crowd.
4th Gear: GM’s Best Division Growing Sales, Has Plenty Of Chips
Also in China, GM’s best division, Wuling, is doing great. Wuling makes GM’s microvans and mini EVs for the Chinese market, all of which are wonderful and adorable. Anyway, sales are up and the chip shortage problem is being managed, according to Automotive News China:
SAIC-GM-Wuling Automobile, General Motors’ light-vehicle joint venture with SAIC Motor Corp., said it has shored up output and sales this year with semiconductor chips developed by domestic Chinese companies. The company’s deliveries rose 12 percent to some 200,000 in October, with year-to-date volume advancing 21 percent to some 1.43 million, SAIC-GM-Wuling said Thursday.SAIC-GM-Wuling is one of the few automakers to maintain growth amid the global chip crunch.
The company said it has secured supplies under agreements for the development and certification of chips first established in 2018 in collaboration with domestic semiconductor producers, chip makers and other related parts suppliers.
5th Gear: I Have No Idea What Is Going On With This New York Times Article On Those Electric Aircraft Startups
I am not sure why now people are suddenly thinking that flying cars/people-sized drones are going to happen after years of them, well, not happening, but the New York Times just ran another “future of transportation” article on them, breezing past any real issues with the tech. Here is a little section:
It is late afternoon in Manhattan and you have a flight to catch at Kennedy International Airport. Instead of sitting in rush-hour traffic for two hours, you take a short ride to a nearby parking garage where you board an electric aircraft that takes off vertically from the roof and deposits you at Kennedy 20 minutes later for roughly the same cost as a fancy ride-share. You make your flight in time.
While this scenario might sound far-fetched, several companies say they are on the verge of being able to offer safe, cheap, clean electric aircraft that can help passengers travel distances between two and 150 miles without the need for a conventional runway. Public and private experts believe the technology could grow into a massive market that helps ease congestion and changes the way people travel in major metropolitan areas.
Basically, a lot of people are talking about electric aircraft! Wow! What is not being talked about perhaps as much is that none of this has any actual basis in reality. Here is the conclusion of the long-winded story:
Sam Morrissey, the executive director of Urban Movement Labs, said the aircraft initially will likely be confined to existing commercial airports and flight paths until officials are able to determine how the new locations for takeoffs and landings can be added without disrupting other modes of transport. (Joby and Archer have both begun certification under rules for existing fixed-wing aircraft.)
“Our challenge is if they are to arrive, can we have everything in place so it’s not something only rich people can use,” Mr. Morrissey said.
Please look forward to all of your friends asking you about the flying car they saw on the internet and when they’ll be able to buy one.
Reverse: We Started Flying Across The Pacific Ocean, Which Is Rather Large
From the Smithsonian:
On November 22, 1935, the Martin M-130 China Clipper opened the first regularly scheduled air mail service across the Pacific, from San Francisco to Manila. Here, it flies over the unfinished Golden Gate Bridge. A year later, the China Clipper began the first trans-Pacific passenger service.
Neutral: How Is Your ID.4?
The last time I drove one, it refused to unlock the charging cable I was using until I called Electrify America for help. Turns out double-unlocking the car gets it to release, a common problem with these things. Has your ID.4 had any issues?