Remember how in the 90s the intel pc completely overwhelmed and completely destroyed several layers of computing competitors. Intel and their PC manufacturing bretheren did that by providing a decent quality product at the lowest price. Then they used the benefits of manufacturing scale to improve the price quality ratio to the point where the intel PCs were higher performance than even the fancy work stations that cost 10 times as much.
Well the chinese are about to do that with EVs. EVs are very similar to PCs in this respect, because they have a lot of potential for manufacturing efficiencies.
Western manufacturers (other than Tesla) should drop their prices and try to get to scale as soon as possible. Tesla is at scale but it has a bunch of other problems. Elon should stop his public stage embarrassments (latest having to do with antisemitism and neo nazis) and should concentrate on making cars people like.
For 2023, China's BYD has globally outsold Telsa by over 50% and 8 out of the top 10 brands for global electric car sales for Oct 2023 are from China.
The BYD qin plus, for instance, is about $20k, the Wuling Mini-ev is about ~$10k, Aion Y is $20k. They're eating everyone's lunch and expanding into Central America, Africa and Europe.
Cars like the Cherry QQ, which are $5,000 aren't meant to be compete with new cars but instead, to the vast majority of price-sensitive buyers who normally purchase used cars. Introduce a used-price new car, however ...
They're poised to do to the American auto market what Japan did 40 years ago and just like then, American auto seems to be asleep at the wheel.
This is a classic Clayton Christensen innovators dilemma formula.
Edit: Apparently factual statements are unpopular once again. The internet is so cool.
The often quoted sales figures, that you appear to be referencing, that have them way out in the lead include ICE and Hybrid cars, so if you're going to include those you're really comparing overall auto sales not BEV sales.
https://www.investors.com/news/tesla-vs-byd-2023-comparing-e...
I read an article that said this all started with Tesla production in China needing local manufacturing to support. The Tesla way allowed Chinese brands to see what was being done and catch up almost immediately on the processes and technology. That was step 1. Step 2 was applying the better understanding of what the Asian market wants to the Tesla business model. VW was the largest Chinese manufacturer, but VW EVs have flopped and are by all measures worse than what is offered by say BYD. There was a VW anecdote about BYD having in-car karaoke and this never occurring to Germans as something people would want.
Aside from US consumers, everyone stands to lose from cheap EVs flooding the market: oil companies, conventional domestic and import manufacturers, electric manufacturers like Tesla, dealerships, arguably even state and local governments who under current laws make less in tax revenue on electric cars.
The US automotive market plays a completely different game than the rest of the world, with a bunch of protections and quirks that have a great potential to stifle a disruptive innovator.
First: the products themselves are regionally unique. The #1 selling vehicle in the US is the F-150, a truck that is a completely insane purchase for most of the rest of the world’s population. Japan may have disrupted the US market, but many of their vehicles they sell in big volumes are designed in America built in America sold primarily to Americans. BYD can’t sell the Qin Plus in America, they need to sell something more like the Rivian R1T. That means BYD needs a US factory to avoid the chicken tax…
Second: The US already shows high willingness to “chicken tax” EVs. All the vehicles that qualify for the EV tax credit are Ford, GM, and Tesla vehicles with high domestic part counts. The government can play this game until the cows come home giving the big 3 ample time to catch up.
So we’ve established that if you’re selling big volumes in America, you are producing cars in US factories. In that regard, China has a weak record of success. If they want to sell trucks in America they’ll probably have to have a UAW factory. The documentary “American Factory” comes to mind for me.
At best, this means that China won’t get the typical labor cost advantage that their entire export economy thrives on. What is their competitive advantage at that point?
Third: the dealer network. Operating in the US means dealing with independent dealerships often enshrined by law. Tesla had to fight an improbable battle to get to the scale it is now without independent dealerships.
Fourth: the incumbents have good tech and are high volume producers in their own right. BYD is big. You know who is bigger? Volkswagen. Toyota. GM. Ford. Even Tesla is bigger by global revenue. 17 other global automotive companies pull in more revenue than BYD, and 9 pull in more revenue than SAIC.
By the way, the “$5,000 used car killer” has been a legend for decades and will never happen in developed markets with strong safety regulations and demanding living standards. Americans literally do not buy city cars, new or used. Get back to me when the Cherry QQ more closely resembles the Ford Maverick.
https://www.youtube.com/@Wheelsboy
I'm really blown away with some of their exterior designs. Less so with their touch interfaces (which range from atrocious to outright dangerous).
Stuff is just cheaper in China.
I highly doubt BYD could sell a car in the US for $20k.
(And yes, it is because of him, Blue Origin, Arianespace, and many others haven't been able to compete at the level of China, and neither have any electric car makers with BYD on a serious numbers level)
I saw a BYD logo on a vehicle on the roads of London UK a few days ago. I knew they were coming, and now they are arriving.
Geely is more stealthy, Electric vehicles from Geely subsidiaries (Volvo, Polestar, LEVC) have been around for years. The last, LEVC ( https://levc.com/ ), is the current London "black cab" taxi.
Why wouldn't they?
In response, European automakers are both innovating and pressuring governments for restrictive measures.
https://www.reuters.com/world/europe/eu-launches-anti-subsid...
They already have - volvo makes nice evs but pretty pricey
This isn't necessarily true. A good case study is the Tata Nano which carried a lot of press around being the world's cheapest new car and ultimately flopped: https://www.autoweek.com/news/a1702021/tata-nano-failed-beca... . Arguably cars can be cost optimized to a point where people would rather buy a nicer used car.
I would grant that PC manufacturing is wildly different than manufacturing an internal combustion engine car, but is it wildly different making an EV car? A lot of complexity disappears once you don't have to orchestrate thousands of tiny explosions, then transmit the thrust from those explosions to multiple wheels in different areas of the car. My understanding of EVs (which is limited) is that they are much simpler.
This is not even the interesting thing about lower battery prices. It may happen, but the interesting thing is that it enables different kinds of electric vehicles.
If the cost of the battery in itself rivals the entire price of a subcompact economy car, you obviously can't put one in a subcompact economy car and offer a competitive price in that market. So right now the electric vehicles with significant range are premium products. With cheaper batteries you could have a traditional subcompact economy car with mechanical controls etc. and an electric powertrain.
Likewise, trucks need large batteries to have adequate range while hauling loads. So this gets you to an electric version of the Ford Maverick, for example.
It doesn't just lower the price of the existing models, it allows the low-end models to exist.
I predict more of an S-curve growth in EV sales. Probably >65% of new car sales by 2030, far more than the 47% in the ‘hyper adoption’ scenario in the article.
https://en.wikipedia.org/wiki/IBM_PC_compatible#"IBM_PC_comp...
https://www.wsj.com/business/autos/are-americans-falling-out... https://www.wsj.com/business/autos/ev-makers-turn-to-discoun...
I have little trust many of the older car manufacturers as well; GM, Chrysler, Ford seem to be 30+ years behind on shipping reliable technologies like variable valve timing or independent rear suspension. Have you seen the Ford Bronco crash test? The Kia key debacle has only recently taken over the fact that Chrysler was 20 years behind Japanese makers adding chip on key/immobilizer tech. The american makers put off tech like coil on plug, and port injection 8+ years compared to Japanese and European.
Teslas are claimed to be the safest cars ever made. In fact, Tesla uses instrumentation to track accelerations many times a second during actual crashes, and gather statistics on what gets hit, and what goes where during a crash.
This is data of a quality head and shoulders above the competitors, and it shows.
On top of that, they are using similar techniques to have the car avoid the crash altogether. These comprise active safety measures which are included with FSD, but which are also standalone and included generally in Tesla cars.
No, instead demand is rapidly drying up, because suddenly people realize most EVs are vastly, vastly inferior to what they were supposed to replace. The only EVs that make sense are small ones, small battery, for urban transport without the emissions, so you can keep the city air clean.
From that point on, the bigger you get, the worse it gets. Notice that although Tesla has sold several million sedan/compacts and... uhmm "SUVs" (really: just slightly bigger Model 3s), they keep postponing the CyberTruck and Semi. They've only made 90 Semis and avoiding mass production. CyberTruck also won't be in mass production for at least a year more as they test the market (expect several thousand sold).
That's because no amount of hype can hide the facts for too long. These cars are expensive to buy, but way more expensive to own. Insurance is shooting up to the sky as they have to write off entire cars over minor damage because they dented the battery and this sh*t can't be fixed.
EVs will also be increasingly a liability when parked tightly below residential buildings, malls, ferries and so on. If it catches fire, the whole parking lot is done.
The EV bubble is popping before your eyes. The future is not electric. The future is hybrid and I mean this in multiple ways. Diesel trucks, gas pickup trucks, hybrid family cars, and small electric urban cars and electric scooters.
I don't know how anyone with any knowledge of EVs whatsoever can make this argument in 2023. Maybe this was forgivable 10 years ago, but now? This feels like bad faith.
> The future is hybrid
The future of personal transport vehicles is battery-electric, full stop. Why? Because you no longer need any of the trappings of an internal combustion engine. People forget why cars were awesome in the first place -- because you didn't need a horse anymore. In the same way, the big gain in the BEV is NOT adding the battery and the electric motor, it's getting rid of the ICE.
haha well Luton Airport fire was not caused by an EV !! https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-67077...
The risks are going in the opposite direction with lifepo4 batteries this reduces by a large margin (( far better than petrol and diesel )), then the next step is semi-solid state batteries and then solid state.
Just no contest...
"can't be fixed" well insureance companies will need to be forced to make sure they are fixed !!! it's poor regulations that are causing this not the tech!! standard and modular replaceable batteries problem solved and this also reduces prices.
The West can only hold back value Chinese EVs for so long.
Vastly inferior?
I have one of the cheapest EVs that you can buy in the US. The quick charging standard is obsolete. And yet I'd rather drive it than most gas cars. Instant torque (even with a wimpy motor that's the size of a baseball), silent operation, zero time spent at gas stations. Free charging at work means I don't pay for fuel to commute (and it's more than 50 miles each way). But even if I did pay, it would be far cheaper than gas.
> These cars are expensive to buy, but way more expensive to own.
It's the cheapest car I've ever owned. I leased, then purchased after the lease. It cost about the same as an entry level Honda Civic. 4th year, $0 maintenance, other than a cabin air filter.
No oil changes, no emissions testing.
> the bigger you get, the worse it gets.
That's true for all vehicles, although you do have a point with power density requirements. SUVs and 'trucks' are only viable because US gasoline is still cheap even in CA peak prices and parking is usually plentiful. Notice how they are rare worldwide.
> Insurance is shooting up to the sky as they have to write off entire cars over minor damage because they dented the battery and this sh*t can't be fixed.
Insurance is fine for me. Again, non Tesla. Not all cars have the same design or have batteries that are structural - or batteries that aren't too different from laptop ones.
> EVs will also be increasingly a liability when parked tightly below residential buildings, malls, ferries and so on.
Statistics are hard to come by, but you'll find some manufacturers that have a higher incidence of fires. In particular, LFP chemistries are very, very tame. Heck, Toyota still uses NIMH for their hybrids.
By the way, you contradict yourself when you say the future is hybrid, but then go on to talk about battery fires. Even small hybrid batteries store a lot of energy, enough for a pretty serious fire if they do catch on fire. So which is it?
Many of your criticisms seem to be about Tesla. Tesla does a lot of things that are questionable. Repairs tend to be very expensive, for one. The Cybertruck makes no sense and the Semi is probably not viable. That's not about "EVs" though, that's a Tesla specific thing.
I'm hoping we'll see improvements to the designs here, e.g. modular replaceable batteries, so that if the battery is damaged in a collision there's a $1000 cost to replace one of 4 battery modules, rather than a $40000 cost to replace the entire vehicle.
I'm not sure being an EV is the biggest hurdle for manufacturing that abomination. Tesla had troubles putting plastic panels together, so steel ones might be an issue. If they actually end up trying to manufacturing it at scale they'll end up having redesign it which will lead to significant delays.
As far as the cybertruck ... this is just the stupidity elon musk has been affected by lately. The cybertruck body is supposed to be made by a fancy new method which Tesla has a lot of problems bringing to mass manufacturing. Rivian is making ev trucks and suvs that are quite popular.
That would be quite the milestone
I’m curious at what point it will flip and EVs become cheaper than ICE
And this can keep going.
A big pending change: if the solid state battery with 10 minute charge time works, gas stations can become charging stations. Pull out the pumps and tanks, put in the chargers, keep the islands and the convenience store. Charging stations now look like gas stations, not parking lots. Transitioning to BEV does not require new real estate.
By 2030-2035, people with gas cars will be looking at maps to find open gas stations.
With adoption already at 5%, that's a serious threat to gas station visits; imagine 10% fewer people stopping at a gas station a given week, or 20%. And this doesn't only apply to bevs, but to a smaller degree phevs too.
Service centers (fewer oil, brakes, coolant changes), dealerships (because engine and transmission failure decreases), and eventually auto parts stores will also see this volume of customers decrease.
Getting to 2030 is going to be wild.
You really don't need to even do that. You can put a charger at every parking lot in front of the convenience store (Already happening in a few locations around me).
But also, most charging (at least early on) will be happening at home. There really is no need to convert every gas station into a charging station. We just need major throughways covered. The one missing piece is L2 chargers, We need more of those installed in more locations. For example, employers could easily put them in office parking lots. With 8 hours to charge, you could even do L1 chargers.
That's a wild statement. Not everyone replaces their vehicles every year. Some people drive a car for 10-20 (+) years before ditching it. There will assuredly still be plenty of open gas stations in 2035.
I'm already doing that now for true Diesel #2 in SoCal with my '15 VW GSW TDI SEL. Diesel was always hit-and-miss being at about a third of stations, but now it seems like two-thirds of the stations which had Diesel #2 converted to some B20-B50 variant or even R99.
I wonder how many diesel fuel systems are getting absolutely pwned by ignorant owners putting high(er) biodiesel content fuel in contact with gaskets which will swell and fail once the owners switch back to Diesel #2...
150 wh/kg sodium ion and 200+wh/kg LFP is going to be the workhorse of this price improvement. Sodium Ion should only be 30-40$/kwhr, and 2025-ish is when CATL expects to hit 200wh/kg sodium ion and 250 wh/kg LFP.
So its a double assault: higher density with cheaper materials. Waiting in the wings are solid state and sulfur techs among others.
IMO what is needed is a gradual phase-out EV price credit (not a tax credit) that starts at $10,000 and drops $1000 per year. Meanwhile, ICE cars should get taxed at registration $500 extra and that increases $500 per year.
Gas prices alone are enough stick for this transition.
If Tesla can pull off some of the manufacturing efficiencies and improvements they talked about at their last investor day, it seems very likely their up coming "smaller" vehicle will be exactly that.
After I figured in gasoline costs and my commute in California, I worked out that my used luxury EV would save 100% of its purchase price in gasoline (even accounting for electricity costs) in something like 3-5 years.
Can confirm; >5 years on a Model 3 and other than tires $0 in maintenance so far. >3 years on a Model Y and other than tires, $0 in maintenance so far. Absolute huge cost and time savings compared to my ICE vehicles, even when I perform my own maintenance on them.
Once they normalise EV prices will be still really far off.
The average ICE engine hasn't changed, from a technology standpoint, has not changed in decades. What's changed is all the internal technology (entertainment systems, parking cameras) as well as trim that's become standard (power everything). These standards are defined by the market. Case in point: see what the standard for cars (both quality and price) are for a given market like US vs India.
It's unlikely they will lower margins so much as to make less money from EV's than from ICE cars. An analogous model are iPhones. The old iPhones could be sold today at a fraction of the price but instead they release new models with better features to justify the higher price point.
(This is all with a caveat that I'm talking about sticker price. Given that EV maintenance should generally be cheaper, without a doubt the target is to have the total cost of ownership be lower than an ICE car as that's how EV's are being positioned today.)
Now the battery costs are falling and in a few years we will probably see an oversupply situation which will be good times for anybody who uses batteries. I'm a bit hopeful about decarbonization efforts for the latter half of the decade. I think battery prices will drop enough to make grid storage viable in more places and further allow the deployment of wind and solar generation. As this article mentions EVs will see a major price drop in their most expensive component.
Then of course a bunch of the manufacturers will go out of business because the prices dropped too low and then the market will consolidate into a couple of companies and prices will creep upward again as they fail to compete with each other. But that's a problem for the future.
Grid storage is the major one. As price starts to decline you are going to see power providers soak up any excess battery supply.
* LFPs are really starting to take off which pull a lot of pressure off higher capacity NMC batteries.
* Sodium ion batteries are just starting to hit the market which further reduce demands on Lithium.
The ramp up on alternative chemistries is playing a fairly good role here and sodium ion will likely push prices down even more aggressively.
Further, I expect that battery recycling will really start to be a major contributor to lower costs in the next 10 years or so. So I'd expect even lower prices as the battery market starts approaching saturation.
For cars, they are pushing lfp and sodium ion as perfectly reasonable & cheap batteries.
But the ultra dense stuff will also help as well, especially with heterogenous cell architectures and the like.
Find me a after the market Chinese cell phone battery that lasts 24 hours or an after the market laptop battery that lasts two hours on a charge and I'll be a devotee to Chinese electric cars for whole my life.
This feel good tech utopia of endless possibilities where wind can power terra watts, sunlight can do wonders and such sells well but otherwise is irrational and non scientific. At the moment.
Problems are harder than that.
Major EV Manufacturing expansion has been cancelled by automakers, including Tesla
The manufacturing costs that were propped up by cheap Chinese labor and exotics is ending.
Not enough exotics available for a long term plan to convert the US to EVs. Cost ends up driving EV prices too high for foreseeable future.
Not enough infrastructure in the US. This isnt changing anytime soon.
Money is tight and risk averse consumers avoid EVs, especially anything that isnt the current models.
Oddly e-bike prices have continued to rise without a real correction after the covid shortage constrained supply price spike, and the used market is kept from balancing it out through very high replacement battery pricing with various vendor lock in mechanisms. (eg: https://www.statista.com/statistics/1396568/average-e-bike-p...)
Eg this says the e-bikes YoY growth has been only 10% ish and forecasted to continue that way: https://www.statista.com/statistics/1261084/global-e-bike-ma...
It wouldn't surprise me if BYD, CATL, and Tesla were already there now. Not sure if there's public information on that though. I'd imagine they'd keep it a secret if they can.
Funny they mention nickel and cobalt, since they're not actually required. I think LFP cells are somewhere around half the EV-battery market these days.
Agreed!
Will they last 10 years? Probably too early to say. Battery degradation isn't the problem people thought it would be. But anything mechanical is going to need some maintenance.
It's not like their quality is worse - far from that. It's just that they're engineered to last a very specific engine hours figure.
Current approaches like silicon-enriched or pure lithium metal anodes indeed use less materials, but they're decreasing the size of the less dense of the two electrodes, as the metal cathode is typically much denser and heavier than the graphite anode, so ultimately you're getting more density, but largely because you're decreasing the volume of the whole thing.
Lithium is the limiting component, since it carries the charge - there's a theoretical limit how little you can use and we're within an order of magnitude of that.
[1] https://www.sciencedirect.com/science/article/abs/pii/S24058...
[2] https://ars.els-cdn.com/content/image/1-s2.0-S24058297193110...
About the only one who seriously committed to it was Elon Musk and his engineers. It may have been the last sensible thing he did, but it was a doozy.
With the caveat that demand is decreasing right now. [0]
0. https://www.wsj.com/business/autos/ev-makers-turn-to-discoun...
Seems like the cheaper batteries will solve that
The current battery tech is responding to demand (and demand predictions) from a couple years ago.
The main thing is that the cost of fuel vs. the cost of electricity meant that we are saving ~$100/month and the difference in car payments for ICE vehicles vs EV was smaller than that.
Although I'm pretty sure this only holds for new vs. new. The "used" market for EVs is almost non-existent and the savings you get is not nearly as large in used as it is for ICE. So if you are willing to buy used, then yes, ICE is still going to have an advantage for a while. But for new vehicles at least, modulo all those factors up above, it's already the case that some EVs are cheaper than comparable ICE vehicles.
I had solar panels installed a little over ten years ago, for environmental reasons, and I was surprised to learn that the economics were already good enough to make it work out as a benefit in purely financial terms. Equipment has only gotten better since then.
Incentives and prices will vary over time. While there is new "tech" for solar in the pipeline, it will take time to reach market. As prices decrease, incentives will as well. Be mindful of how incentives and financing may stack, EnergySage will provide all the info you need to make an informed decision.
If I could really buy 1 kWh of cells for $130, I would expect to see them show up on eBay for not much more than that. (Or, even for less, because eBay has a lot of factory seconds, damaged goods, etc)
However, prices for new bare cells on eBay is more than double the numbers quoted in this article.
It makes me think there are market distortions going on, and the real price is differing from the advertised price.
> damaged goods
A damaged battery is recycling material, not a resale item.
Is Goldman confident this is a long term trend? I didn't see in their report that the decline in price is due to permanent increased supply or increased efficient extraction etc...
The article uses words like “expect”, “might”, “could”, and “hope” throughout. Look at where 2023 is on those charts: way to the left on the x-axis.
I hope batteries really do get cheaper in the future but this is optimistic prediction headlined as present-tense fact.
Basic transport in the NEV class is far superior and benefits with tech true innovation.
Bigger heavier more shit to break is what I see Lincoln advertise meanwhile in Texas car payment insurance gas parking tolls (sound familiar?) take a huge chunk of income. It’s dumb. Fix this first.
EVs provide the sweetest kind of demand for a grid, they are parked 23 hours a day, can charge whenever power is free and less than free. Power prices go negative 200 million times/year[1]. Batteries, Solar and Wind and still in the early stages, as volume grows, both will get a lot cheaper. Batteries add the much needed gigantic-distributed-storage-reservoir, soaking up all the excess production that is currently wasted.
An insightful comment from a HNer (don't remember who), if there is excess production we have to either move it across time or across space. Across space requires building transmission lines (costly, takes a decade). Across time is easy, we just need more EVs, everywhere.
https://en.m.wikipedia.org/wiki/File:3-Learning-curves-for-e...
(2019 article) “Batteries will fall much faster than you are forecasting.” The key determinant of our forecast is the relationship between price and volume. From the observed historical values, we calculate a learning rate of around 18%. This means that for every doubling of cumulative volume, we observe an 18% reduction in price. Based on this observation, and our battery demand forecast, we expect the price of an average battery pack to be around $94/kWh by 2024 and $62/kWh by 2030: https://about.bnef.com/blog/behind-scenes-take-lithium-ion-b...
Learning rate for Solar is 20%. According to this article (https://ourworldindata.org/learning-curve), the price declined from $106 to $0.38 per watt in these four decades. A decline of 99.6%. It looks like modules are a lot more cheaper, its now $0.14 per watt for TOPcon(28% efficiency) and $0.12 per watt for PERC (24% efficiency).
A common critique that comes up is, we don't have electricity for all the EVs. This is nonsense.
(1) Renewable energy is currently curtailed. A lot of production is wasted, because there is no demand at that time. EVs absorb all that.
(2) See the calculations here: https://news.ycombinator.com/item?id=35845334
(3) Electricity is used heavily in fossil fuel and oil production. We simply shift it to EVs. No additional demand.
(4) Right now, everyone's energy is fragmented: natural gas for cooking, water heating, boiler for heating, gas for cars and electricity. When people switch to EVs, a lot of them switch to solar, consolidating all energy, saving ~$1000/month. And also lowering consumption from the grid.
(5) We somehow found a ton of electricity everywhere for bitcoin, 127 TWh. We can definitely find electricity for EVs.
But, more importantly, EVs can replace natural gas peaker plants (the costliest part of electricity) and make some money! Powerwall owners are making $150/day: https://electrek.co/2023/07/05/tesla-electric-customers-repo.... When virtual power plants start popping up, there will be a huge rush to buy EVs. A ton of people are buying homes for 500K+ to put them up on airbnb and they barely make 100/day. Owning an EV (replacing your existing ICE) and make $100+ per day just by opting in to participate in a VPP is the very definition of passive income.
[1]https://www.bloomberg.com/news/articles/2022-08-30/trapped-r...
