The Current State of EVs

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SoFlaModel3

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#1
I had the privilege of joining a tremendous panel to discuss the current state of EVs at EVs & Tea yesterday in Miami, Florida.

Here is the whole discussion:

 

JasonF

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I haven't watched the video above yet, but its subject reminded me of a video by Engineering Explained a few days ago that revealed a sad truth about the automobile industry.

He believes that EV's are currently a victim of their own small market share. And he said that even though you see them popping up everywhere, they're still only 2% of the total car market. So from the point of view of legacy auto companies, putting money into EV's is only chasing 2% of the car market, which some of them still believe is a fad rather than an emerging market.

In the video, he gave the example of Mazda, a small car company that has limited R&D funds. If they create an EV, it will likely cost them their entire R&D budget for several years. And when they're done, they'll have one EV that they can sell to 2% of the market, while their other models' sales collapse because now they're old, and no one has a reason to get excited about them anymore. So they keep putting all of their R&D into improving gasoline cars, and hoping that it doesn't hurt them later.

Not covered in the video though was risk aversion. If that same company, Mazda, decided it was worth the risk (and they had the cash to support it) they could convert all of their models to EV's, betting on it being the future. It might cost them a lot of sales now, but in a few years they'd be ahead of the curve. You can hope they'll do that, but without an insane CEO like Elon Musk (or his T-Mobile doppelganger, John Legere) risk won't be something in their vocabulary. And that goes double for General Motors.
 

AutopilotFan

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Not covered in the video though was risk aversion. If that same company, Mazda, decided it was worth the risk (and they had the cash to support it) they could convert all of their models to EV's, betting on it being the future.
They mentioned this in a different context. The legacy car companies are part of an entire infrastructure of service and repair facilities around the ICE drivetrain. Its hard to step away from all the existing business models around how money is made. But this is true for every disruptive technology that comes along. Too much risk aversion means you lose your company anyway, so the far-thinking companies take the risk.
 

SimonMatthews

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In the video, he gave the example of Mazda, a small car company that has limited R&D funds. If they create an EV, it will likely cost them their entire R&D budget for several years. And when they're done, they'll have one EV that they can sell to 2% of the market, while their other models' sales collapse because now they're old, and no one has a reason to get excited about them anymore. So they keep putting all of their R&D into improving gasoline cars, and hoping that it doesn't hurt them later.

Not covered in the video though was risk aversion. If that same company, Mazda, decided it was worth the risk (and they had the cash to support it) they could convert all of their models to EV's, betting on it being the future. It might cost them a lot of sales now, but in a few years they'd be ahead of the curve. You can hope they'll do that, but without an insane CEO like Elon Musk (or his T-Mobile doppelganger, John Legere) risk won't be something in their vocabulary. And that goes double for General Motors.
How much money did Mazda spend on developing the HCCI engine? Mazda isn't risk-averse, they are EV-averse.