Market flooded with electric cars despite massive losses

[…] Tesla really outdid itself in 2Q 2017 by posting a record cash burn of $1.2 billion, or roughly $13 million every single day.  Per the chart below, Tesla’s Q2 cash burn was just a continuation of the company’s money-losing trend that goes back at least 6 years and seems to be getting worse with each passing quarter.  But Tesla isn’t alone in burning cash on “EV’s” as pretty much every electric vehicle offered to customers loses money on a per unit basis.

At this point, expensive battery technology still makes them money drains. General Motors Co. loses about $US9,000 on every Chevrolet Bolt electric car it sells. Tesla had record sales of its EVs last year — and still lost $US675 million on $US7 billion in sales. Fiat Chrysler Automobiles NV loses $US20,000 on every electric version of its 500-model subcompact sold in the U.S., Chief Executive Officer Sergio Marchionne said in a speech in Italy on Monday. Battery-powered models should be marketed based on consumer demand and not depend on incentives, he said. […]

Remove the Government incentives and the subsidies from petrol vehicle (PV) auto-manufacturers, who have to pay their EV manufacturing competitors for the privilege of producing evil climate destroying PVs, and the real cost of EVs would be revealed.  There would still be some virtue signalling purchases from Government and Local Bodies but most consumers would vote with their wallets. […] 

Here are two facts that defy logic: By the end of the year, electric-car maker Tesla Inc. will have burned through more than $10 billion without ever having made 10 cents. Yet companies around the world are lining up to compete with it.

Tesla Roadster: Best Car of 2008 (and it’s 100% Electric)

Almost 50 new pure electric-car models will come to market globally between now and 2022, including vehicles from Daimler AG and Volkswagen AG. Even British inventor James Dyson is getting into the game, announcing last week that he’s investing two billion pounds ($2.7 billion) to develop an electric car and the batteries to power it.

“Nobody doubts that the future will be electric,” said Erich Joachimsthaler, founder and CEO of brand-strategy firm Vivaldi, which works with German luxury carmakers. “The car companies dragged their feet with electric. Now they are being dragged into it by Tesla and by regulations.”  […]

“Nobody doubts that the future will be electric,” Really.  I think that there are quite a few of us that doubt an all-electric future.  A constant speed engine running on petrochemical fuel powering a generator to provide electricity for direct wheel drive is a much more efficient system, but Governments around the world are busily banning petrochemical fuel power already.

[…] France and the United Kingdom are doing it. So is India. And now one lawmaker would like California to follow their lead in phasing out gasoline- and diesel-powered vehicles

Meanwhile, as the race to add supply of electric cars goes into overdrive, Bloomberg points out that “there is little evidence that there is a lot of consumer demand for it.”  We’ll have to check our notes from Econ 101 but we’re almost certain that adding new supply to an industry that already loses money due to a lack of demand is a bad idea… […]

Can’t fault that logic.

[…] In North America alone, the number of electric vehicles will soar to 47 by the first quarter of 2022 from 24 in the third quarter of this year, according to data from Bloomberg New Energy Finance. China’s EV market will go to 80 from 61, and European buyers will have 58 electric choices, up from 31. Globally, there will be 136 EVs on the market by the end of that year, and that doesn’t even include the hybrid models or fuel cells.

That will make for a very crowded field in a nascent zero-emission car market that most consumers have yet to embrace and where financial losses loom large. In the U.S., electric car sales were less than 1 percent of the market last year, according to the International Energy Agency. They were 1.4 percent in China and in the U.K.

“Companies are committed to electric cars, but there is little evidence that there is a lot of consumer demand for it,” said Kevin Tynan, senior analyst with Bloomberg Intelligence.

Here are some of the significant new models coming to market:

  • VW’s Audi brand will start building the E-tron Quattro, a luxury SUV, in 2018, followed by the Sportback coupe in 2019 and a third, unnamed vehicle by 2020.
  • Porsche AG will sell a production version of its Mission E sports sedan concept car starting in 2019.
  • In addition to BMW’s current electric i3 compact and i8 sports car, the German automaker will have an electric Mini in 2019, an X3 compact SUV in 2020 and 10 others by 2025, Chairman Harald Krueger said in a speech in September.
  • Daimler’s Mercedes-Benz brand plans 10 battery-powered vehicles in its EQ sub-brand through 2022, while Volvo Car Group, which is owned by China’s Geely Automobile Holdings Ltd., has said any new models launched in 2019 or later will be offered only as hybrid, plug-in hybrid or all-electric versions.
  • Tesla plans to build the Model Y small SUV in 2019 or 2020.[…]

[…]Of course, the irony of all of this is that no one is more happy about the shift to electric cars than the folks working in the [US] coal industry who will supply the power required to keep them on the road. […]

Many in the UK have questioned the wisdom of the edicts there as the national grid can neither produce nor deliver the demand need to charge all the EVs that will be required once the PVs have been outlawed.  Madness.

But …. Climate Change!

-Zerohedge

 


This post was written by Intern Staff

 


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