Electric cars: will any auto company make money?

Posted: August 25, 2018 by oldbrew in Critique, government, ideology, Travel

Chinese electric car [image credit: scmp.com]

The author paints a bleak picture: ‘Hundreds of new car models chasing only five percent of the market is a recipe for financial debacle.’ High prices don’t help either.
H/T Heartland Freedom Pub / Washington Times

Tesla reported second quarter results earlier this month. Despite losing $718 million during the quarter, Tesla shares rose 16 percent on renewed promises of profitability.

Driven by government incentives and mandates, world automakers have announced big electric car introduction plans. But will any electric car firm be able to make money, asks Steve Goreham?

Start-up automobile companies face long odds. Over the last ten years, Tesla posted cumulative losses of over $3 billion. In the second quarter, Tesla began to ramp production of its new Model 3 sedan, producing more than 50,000 cars. Tesla also promises to attain profitability in the near future, but the firm is about to face rapidly growing electric car competition.

World auto makers have not only embraced electric cars, but now appear to be competing to introduce the most electric models. More than 400 fully electric or hybrid electric vehicles have been announced. BMW plans to introduce 12 all electric and 13 hybrids into its lineup by 2025. Ford announced an $11 billion investment, 16 fully electric, and 24 plug-in hybrid electric cars by 2022. Toyota, Volkswagen, General Motors, and others appear to be all in for electrics.

Hybrid electric vehicles, such as the Toyota Prius, use a conventional internal combustion engine along with an electric motor system to improve mileage. Hybrids can’t be plugged-in and charged. After ten years of production, Toyota was finally able to turn a profit on the hybrid Prius. Hybrid electric cars, which do not suffer the range limitation of fully electric cars, grew to about three percent of global vehicle sales in 2017.

Plug-in hybrid electrics, such as the Chevrolet Volt, can plug-in and run wholly on electric batteries but also use a gasoline engine for longer trips. Battery electric vehicles, such as the Tesla Model S and the Nissan Leaf, are fully electric and run only on batteries. Neither plug-in hybrid electrics nor fully electric vehicles are yet profitable.

UBS analysts estimate that General Motors loses $7,000 on every one of its new Bolt battery electric cars. The Bolt battery pack costs about $10,000‒$12,000, or up to one-third of the Bolt price tag. Daimler, Peugeot, Honda, and other auto makers warn of looming electric car losses.

Where is the demand to support all these new electric car models?

Continued here.

  1. A C Osborn says:

    A good, well written piece with lots of home truths.
    EVs are being forced down our throats by the Governments of the western world, they are trying to take away our choice and should be fought all the way.

  2. ivan says:

    It is all well and good to be producing these electric cars but, unfortunately, they all forget about the other half of the equation – the power station that produces the electricity 24/7/365 to charge them.

    Without cheap reliable power from coal or nuclear, electric cars are useless.

  3. stpaulchuck says:

    another green rathole down which to pour billions in tax money

  4. oldbrew says:

    Not as ‘green’ as you might think


    E-cars use intensively-mined rare earth materials and have massive batteries (1/2 ton in some Teslas) that are hard to recycle.

  5. ivan says:

    oldbrew, is there any ‘green’ project that doesn’t have hidden totally non green aspects that totally out weigh any ‘green’ advantage?

    Even the planting of trees (though why you would want to plant trees unless you were doing it for forest management) has many non green aspects from messing with the water table to using land that could better be used for food crops.

  6. oldbrew says:

    Biomass, ethanol and palm oil as fuels are obvious examples of green ‘own goals’.

  7. Electric cars make money? Not in my lifetime. Reminds me of what scientists say about bees. It should be impossible for them to fly but they do! So you never can tell but as things stand technologically speaking, no chance this side of creation – not without a fat under-the-table Government subsidy anyway!