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Discussion Starter · #1 ·
Tesla is its own animal, but do other carmakers make EVs for "PR" reasons, for profit, or to get their foot in the door for FUTURE profits?

You have companies that only sell in 7 or 12 States. "compliance"?
Some sell in all States but their production is LOW.
If they're slow in production because they're scared of investing, then WHY are they so scared?
 

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do other carmakers make EVs for "PR" reasons, for profit, or to get their foot in the door for FUTURE profits?
Manufacturers have to sell a certain ratio of zero emissions vehicles to ICE vehicles in some states in order to be in compliance with those states' laws.

I don't think any manufacturers have been able to produce their EVs at a profit, yet.
 

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Manufacturers have to sell a certain ratio of zero emissions vehicles to ICE vehicles in some states in order to be in compliance with those states' laws.

I don't think any manufacturers have been able to produce their EVs at a profit, yet.
Is the situation different in Europe, where EVs are priced higher than in the US?
 

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Discussion Starter · #4 ·
Manufacturers have to sell a certain ratio of zero emissions vehicles to ICE vehicles in some states in order to be in compliance with those states' laws.

I don't think any manufacturers have been able to produce their EVs at a profit, yet.
Has there been any speculation as to how much money VW loses on every unit sold?

I wonder if VW can at least make money on just covering the incremental cost. (in other words, ignoring sunk costs of R&D and tooling up)
 

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Designing, developing, retooling, marketing, testing a new vehicle is very expensive. A car like the ID4 begins as a one off until they have a solid design to build off of. EVs that have multiple generations or model spin offs are much cheaper to create. Previous cars in the VW Group let them skip ahead in a lot of tech but a lot of auto companies are very new to the game. The future ID vehicles will be cheaper to produce using the ID4 preproduction as a base.
 

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I don't think they have the same ZEV regulations, although there have been discussions I've seen arguing for the importance of creating a similar regulatory framework. The EU has a 2050 target for full decarbonization of its transportation compared to California's 2035.

As for their profit margins? I don't know how much the manufacturers are making--even in those higher priced markets. My feeling is that they're still losing money or barely breaking even. It's a major discussion point whether these companies are able to make money, which was highlighted by people like Munro and there was at least one tear-down of the ID4 to ascertain whether VW, in particular, could become profitable with its MEB platform.

Historically, VW (and possibly other European manufacturers) had to serve the US as a loss-leader in order to sell their premium vehicles in other countries (culturally, not mandated). I don't know how much that holds true anymore. I'm not convinced Chinese consumers need to see a product sold here for them to buy it anymore, for example.
 

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I don't think they have the same ZEV regulations, although there have been discussions I've seen arguing for the importance of creating a similar regulatory framework. The EU has a 2050 target for full decarbonization of its transportation compared to California's 2035.

As for their profit margins? I don't know how much the manufacturers are making--even in those higher priced markets. My feeling is that they're still losing money or barely breaking even. It's a major discussion point whether these companies are able to make money, which was highlighted by people like Munro and there was at least one tear-down of the ID4 to ascertain whether VW, in particular, could become profitable with its MEB platform.

Historically, VW (and possibly other European manufacturers) had to serve the US as a loss-leader in order to sell their premium vehicles in other countries (culturally, not mandated). I don't know how much that holds true anymore. I'm not convinced Chinese consumers need to see a product sold here for them to buy it anymore, for example.
The Munro review of the ID.4 was a complete joke, as he went into it with the pre-notion of it is a "taxi" and therefore not really worth his time. He kept saying "Why would VW use this part? It is what they use in their ICE cars, they should have done what Telsa did and create a new cheaper part for this." when what that really means is VW is using known and trusted components that they already have tooling for, instead of creating knew and untrusted parts just to say those parts are cheaper to make (after the ROI of design and tooling). As a consumer, I would prefer known trusted (off-the-shelf) parts as the "cost cutting" factor vs new untrusted parts.
 

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Discussion Starter · #8 ·
The Munro review of the ID.4 was a complete joke, as he went into it with the pre-notion of it is a "taxi" and therefore not really worth his time. He kept saying "Why would VW use this part? It is what they use in their ICE cars, they should have done what Telsa did and create a new cheaper part for this." when what that really means is VW is using known and trusted components that they already have tooling for, instead of creating knew and untrusted parts just to say those parts are cheaper to make (after the ROI of design and tooling). As a consumer, I would prefer known trusted (off-the-shelf) parts as the "cost cutting" factor vs new untrusted parts.
"known and trusted" ? Are you implying that the specific components Munro was talking about are MORE reliable on an ID4 than on a Tesla?
 

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"known and trusted" ? Are you implying that the specific components Munro was talking about are MORE reliable on an ID4 than on a Tesla?
If they are parts that are used on millions of cars around the world for many years, then yes. Tesla is not really known for quality parts I’ll remind you.
 

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Discussion Starter · #10 ·
If they are parts that are used on millions of cars around the world for many years, then yes. Tesla is not really known for quality parts I’ll remind you.
Used on millions of cars where the service department can barely keep up with repairs. Different brands have different highs and lows; to imply a correlation between "reliability" and "VW" is quite suspect.

As to Tesla, they're known for panel gap issues and the logistical difficulties of not having a full dealer network, not necessarily "parts".
 

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There's a difference between "new platform" and "clean sheet."

If I'm building up a new bike, I could start with a new frame, but maybe the bottom bracket is conventionally sized so I pull something out of my box, or same with the hubs if I'm lacing up the wheels, or the disc calipers.

Or I could go "clean sheet," literally build my own, throw most conventions out the window, invent a non-standard bottom bracket, headset, disc brake mount, etc.

But even with option #2, do I create a custom saddle and seatpost? Handlebar & grips? Brake rotor? Or do I pick from what's in the box to save me some headache and expense?

Tesla is closer to "clean sheet" because their catalog is small and they can be. VW is closer to the first, they have an extensive catalog and manufacturing process, supply chain and there's economic realities to staying on-budget.

I don't think what Sandy was pointing out was incorrect, except that there would be no benefit from starting MQB entirely from scratch. Maybe gradually, but not wholesale from day one.
 

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Discussion Starter · #12 ·
Sandy and the other guys have also expressed "frustration" that carmakers can push a complicated design JUST because it empties their supply bins.
 

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I don't see much value arguing over Munro's points in any specific video.

The only reason I brought him up was to note that people like Munro and Swiss Bank UBS have discussed the profitability of EVs (and VW, in particular).
 

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No one is really making any money on electric car production and sales. Tesla only makes a little profit from selling environmental credits. Musk would be out of business already if it weren't for subsidies and outrageous stock valuations. His move to less expensive models will put even more pressure on Tesla's profitability. The major car manufacturers are painfully ( they would not admit this) entering the EV market because it makes for good PR and in VW's case to help repair the brand image. Profitability will decline for all major car producers that go big in EVs due to needed new investment and higher production costs. In addition, these same companies will see a devaluation of their exiting assets ( engine, transmission production operations).

As demand for raw materials ( lithium, cobalt, etc.) take off for EV batteries and magnets, the prices for these components will also increase. There are no major/significant technologies on the horizon to improve the situation ( battery technology and costs). Yes, solid state batteries will somewhat improve energy density so EV range will improve somewhat. In the end, I think Chinese EV producers will be better positioned if/when raw material availability gets tight. For the foreseeable future the more EVs sold, the higher the cost to produce key components.

I have to laugh about Munro's reviews of the ID.4. He criticizes VW for using more expensive suspension components and applauds Tesla for using cheap suspension components. Tesla is famous for poor build quality. Munro was also totally confused about the CCS plug in the VW. I think he needs to read up a bit before doing his reviews. CCS is becoming the most widely used fast charge standard. Nissan has already announce that they are moving away from CHAdeMO to CCS. That is a deathblow to CHAdeMO. Tesla Model 3 also uses CCS from what I have read.

What could make EVs more profitable is if automakers were required to make only EVs. This would enable all automakers to significantly raise EV prices and, therefore, profitability. I do not see this happening, at least in the US. The EU could more likely make that happen as they generally have shorter driving distances, more developed infrastructure (power distribution, alternate transportation such as modern trains, etc.) but, still, I do not see it happening there unless governments subsidize it.

So my guess is that EVs will continue to increase market share steadily and the ICE powered cars will be around for some time ( particularly in the US and less developed countries) due to their practicality ( range and ease of refueling) and lower cost to purchase.
 

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They may not make much money on each EV, but they save huge on penalties in the EU. VW faces hefty fines if they don’t meet fleet-average CO2 emissions that increased in 2020 and continue a steep rise in the coming years. A new report from PA Consulting, a global consulting firm, shows that Europe’s 13 top auto manufacturers will face more than €14.5 billion in fines. Under EU regulation, carmakers face penalties of EUR95 per gram of CO2/km in excess of their individual CO2 emission targets. This is likely why they are allocating much more of their production to the EU than US.

Edit: Volkswagen will have to pay fines of €4.5 billion ($5.5 billion US) in 2021, the highest of any manufacturer. This was the estimated amounts in early 2020, and it looks like due to big success of the ID.3+4 in EU they lowered their 2020 penalty to €100 million. That seems like a lot of savings for each EV produced ($16k per.)
 

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Who knows how much they are making (or not making) but i'd imagine its more about the long game. Though I don't see why they wouldn't reuse some ideas or parts from their other EVs (egolf, e-up, id3 and then stuff from their other brands, Audi Porsche etc.)
 

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Used on millions of cars where the service department can barely keep up with repairs. Different brands have different highs and lows; to imply a correlation between "reliability" and "VW" is quite suspect.

As to Tesla, they're known for panel gap issues and the logistical difficulties of not having a full dealer network, not necessarily "parts".
The parts that Munro was complaining about were all part of the suspension system, which is not any area of "reliability concerns" I have heard about in relation to VW. The issues I mainly hear about with VW (and many other German manufacturers) are related to the engine and connected components to such, which the ID.4 does not have.
If you want to bring up service departments not being able to keep up with repairs, then you really shouldn't be comparing them to Tesla as the wait time on getting a Tesla repaired can be many weeks. (Especially where I live since the state has very strict requirements on Tesla since it does not use a dealer network.)
 

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The issues I mainly hear about with VW (and many other German manufacturers) are related to the engine and connected components to such
I've been exclusively driving German manufactured vehicles for 30+ years and VWs specifically for the past 20. I've never heard of any issues with their engines, other than VWs and timing chains. It's always been about electronics, which is hilarious in the context of an EV but such is life.
 

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Discussion Starter · #19 ·
....

What could make EVs more profitable is if automakers were required to make only EVs.
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This would be a very significant reduction to global standard of living. I would probably have to go back to a car as crappy as when I was a 16 year old.
A huge percentage of the world's countries cannot afford to subsidize EV, at all. In fact, there really isn't even a FIRST world country that is subsidizing EV's that isn't also going increasing its government debt while doing so.
 

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I've been exclusively driving German manufactured vehicles for 30+ years and VWs specifically for the past 20. I've never heard of any issues with their engines, other than VWs and timing chains. It's always been about electronics, which is hilarious in the context of an EV but such is life.
Have to admit, any German car I owned ran flawlessly, however, it was the electrical components that would die off. Lose a window here, lose a sensor there. As you point out, we went all in for German electric with the ID.4 Guess we're gluttons?
 
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