Tesla Is Losing Marketshare Over Price

Tesla's full model lineup charging.
Tesla's full model lineup charging.

Tesla is losing chunks of its EV marketshare because it doesn’t have any cheaper offerings, Stellantis wants to make its own EV rollout a bit easier for dealerships to handle, and California seems to have helped get the first Tesla Semi delivery over the finish line. All those stories and more in The Morning Shift for Wednesday, November 30, 2022.

1st Gear: Tesla Loses Ground to Cheaper Offerings

It seems that new EV models from a number of automakers are slowly chipping away at Tesla’s EV marketshare dominance in the U.S. It is mostly coming down to one factor: price.

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A number of competitors are making gains on the Texas-based company because they are selling EVs below $50,000, of which Tesla offers only one, the Rear-Wheel Drive Model 3.

Don’t think this means Tesla still doesn’t have the majority of EV sales in the U.S. Data collected by S&P Global Mobility show that Tesla still had about 65 percent of the EV marketshare in the first nine months of this year. From The Associated Press:

From 2018 through 2020, Tesla had about 80% of the EV market. Its share dropped to 71% in 2021 and has continued to decline, said Stephanie Brinley, an S&P associate director.

[...]

According to S&P, electric vehicles have picked up 2.4 percentage points of U.S. market share this year, growing to 5.2% of all light vehicle registrations. Of the 525,000 electric vehicles registered during the first nine months of the year, about 65%, or 340,000, were Teslas, S&P said.

Despite the smaller market share, Tesla will continue to see its sales grow as consumer interest increases[.]

[...]

A shortage of computer chips and other parts has stopped many competitors such as Ford, General Motors, Hyundai, Kia and Volkswagen from running factories at full capacity to meet demand.

Tesla also faces competition at the higher end of the market from BMW, Mercedes-Benz, Audi, Polestar, Rivian, Lucid and others.

S&P says there are currently 48 electric vehicles for sale in the U.S. By 2025, the organization expects that number to grow to just under 160 vehicles.

It’s highly unlikely in that timeframe that Tesla will introduce any cheaper models. The only vehicles on its upcoming docket right now are the Semi, Cybertruck, and Roadster.

2nd Gear: Stellantis Wants A Smooth EV Transition for Dealers

Stellantis is reportedly working to help ease dealers into its electric vehicle rollout. The automaker has partnered with Future Energy, a company that advises dealerships on how to set up charging infrastructure and trains employees on operational changes.

That being said, Stellantis hasn’t specified an exact dollar amount it would need to get the dealerships up to speed, unlike Ford and General Motors. From Automotive News:

“Nearly 70 percent of dealers are in various phases of assessing their individual readiness” with Future Energy, Stellantis said Tuesday. The two companies began working together late last year.

The evaluations are occurring ahead of Stellantis’ planned launch of more than 25 EVs in the U.S. by 2030, starting in 2024 with models including the Ram 1500 EV pickup and Jeep Recon, a Wrangler-inspired off-road SUV.

Stellantis is aiming for dealers to have their charging infrastructure installed by the first quarter of 2024, said Phil Langley, the automaker’s head of network development for North America.

It isn’t mandatory that stores work with Future Energy, but they will need to have the necessary infrastructure in place to sell EVs. Langley said the automaker wants all dealers to sell EVs. Stellantis has not said whether it would offer buyouts to those who don’t want to make the investment, as GM has done with Buick and Cadillac.

Future Energy will identify energy requirements, electrical infrastructure changes and needed utility service upgrades at dealerships. Stellantis said Future Energy will “locate ideal installation areas for EV charging stations inside and outside of dealerships to address business flow challenges” and help dealerships find financial incentive programs to assist with EV investments.

The evaluations are said to take about 30 days to complete. The automaker’s goal is to have its dealers equipped with Level 3 fast charging by the end of the process.

While official dollar amounts haven’t been released, it will probably vary from dealer to dealer. Ford, for comparison’s sake, has asked its dealers to invest somewhere in the mid-six to low-seven-figure mark.

3rd Gear: California is Still Helping Tesla

Despite the fact Tesla left California in favor of Texas a year ago, the state is actually helping the automaker once again. The first examples of the automaker’s long-delayed Semi are headed to California-based PepsiCo with the help of a $15.4 million grant CARB gave the company.

Pepsi is using the money for a $30.9 million project (which CARB provided half of) to transform its Modesto, California plant. It’ll replace all of its diesel-powered equipment with zero-emission trucks and solar power. A good deal of that money will go to 15 Tesla Semis, six Peterbilt electric trucks, three BYD electric yard trucks, 12 electric forklifts, and 38 low-emission Volvo tractors. From Bloomberg:

Tesla may now be headquartered in Austin, but it still has a formidable presence in California, where public policy and funding has paved the way for electric passenger cars, and now, electric big rigs. The company bills the Semi as nothing less than the future of trucking, but that may prove to be as overly optimistic as its initial plan to start production in 2019. For one, truck stops aren’t ready to deliver the huge amounts of power big rigs and their giant batteries will require. One recent study found the projected power needs for a big truck stop will equal that of a small town by 2035.

[...]

For all the help truck manufacturers and their customers are getting from governments, the transition to cleaner commercial vehicles also will be dictated by tougher emissions rules forcing the issue.

“Trucking will always be driven by cost per mile and total cost of ownership,” said Mike Roeth, executive director of the North American Council for Freight Efficiency. “But we’re moving into a world where diesel is no longer an option because of changing regulations. The game has changed, and fleets are leaning into zero-emission options, whether its electric or hydrogen.”

During Tesla’s last earnings call, Musk said the company is aiming to produce 50,000 Semis for the North American market in 2024. Time will tell if that number is actually met.

4th Gear: Chinese Lockdowns No Problem for Mazda

Mazda says it doesn’t expect to have any problems with production in Japan despite the Covid lockdown situation in China. The automaker says it’s got a big enough inventory of parts to get through the issue. From Reuters:

A draconian two-month lockdown in Shanghai earlier this year forced the Hiroshima-based automaker to suspend production for 11 days at its two domestic plants due to a lack of parts.

“One of the measures that we are taking now to reduce the risk is to bring the inventory to Japan,” said Takeshi Mukai, senior managing executive officer.

The automaker wants to ensure it can withstand one month of COVID restrictions in China and another subsequent month of after-effects, he added.

Mazda said in August it would ask its parts suppliers to increase stockpiles in Japan and produce components outside China as part of efforts to strengthen its supply chain.

Activity for Chinese manufacturers and service industries reportedly shrank this month to a seven-month low. The Chinese zero-Covid policy is to blame for this, as the government aims to put out any and every outbreak.

The moves have led to a spark in some rare public protests that started over the weekend.

5th Gear: BYD EVs Heading to Mexico

Chinese EV maker BYD is reportedly launching its cars in Mexico next year with the expectations of selling up to 30,000 vehicles in 2024.

In 2023, the company will begin selling fully electric versions of its Tang SUV and Han sedan at eight dealerships located across Mexico. From Reuters:

The world’s largest EV maker by sales hopes to sell 10,000 vehicles in Mexico in 2023 and between 20,000 and 30,000 in 2024, Zou said, adding that the firm’s long-term goal is to reach around 10% of total market share. Warren Buffet’s Berkshire Hathaway still has a stake in BYD after having sold some of its Hong Kong-listed shares in recent months.

As per Mexico’s Automotive Industry Association, just 4.5% of cars sold in the first eight months of this year were hybrid, or around 31,000 of nearly 693,000 sold in total.

BYD hasn’t yet released pricing for the Mexican market, but a spokesperson for the company said the cars would be affordably priced.

“We are the brand for everybody,” Zhou Zou, BYD’s country head told Reuters.

In September, BYD had set pre-sale prices for its Tanga and Han models at 72,000 euros ($72,500) in Europe. Few Mexicans make more than $10,000 a year, according to the country’s statistics agency.

BYD’s Zou also said the company aimed to sell cars through 15 licensed dealers in Mexico by the end of 2023 and hit 30 by 2024.

[...]

The company’s announcement comes as Mexico, a major car producing hub, looks to make EVs more affordable by cutting sales taxes and import tariffs — moves Zou said marked a positive step.

In recent months, officials in Mexico have said the country is on track to meet its goal of turning 50% of automotive production electric by 2030.

Zou believes that if states like California go fully electric, Mexico is likely to follow.

Reverse: The Corvair is Doomed!

Ralph Nader’s “Unsafe at Any Speed” hits bookstores

Neutral: Read My Corvair Story!

I talked to a man in Nebraska who lives and breathes Corvairs. Let me tell you, he is not a Ralph Nader fan. He also has eight kids. There’s a lot going on there that is just wonderful. You’ll also probably like the Corvair more after reading it.

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The 1975 - The Sound

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