End of quarter and annual results are seeing impressive results reported by EV manufacturers. Apart from Tesla, more of which later, figures are particularly good from China. Notably Nio and Xpeng, two very accomplished and rapidly expanding manufacturers. The surging performance of deliveries and new models is both exciting and alarming to legacy automakers. Comparing the speed of the Chinese EV industry with the European and American companies (except Tesla) is staggering. It reminds me of the beginning of the Japanese motorcycle industry export push in the 1960’s. All the established and predominantly British manufacturers dismissed the threat. But Japan were simply building better machines. Just look at what happened there.
Now look at the way the legacy manufacturers are addressing their transition to electric. Ford, GM, Toyota and the rest, are all dragging their feet and announcing investment left right and centre but actual new product is very thin on the ground. They are way behind the field. The problem these companies face is complex but one of the biggest is simply the infrastructure they all carry. Millions of pounds worth of factories, staff and experience in making ICE powered vehicles. None of which helps you build EVs at scale. Only VW Group are going for it right now on any kind of volume and they have a very good reason to do so. Still haunted by the Dieselgate scandal first exposed in the USA in 2015, VW has to re-launch as an EV manufacturer or lose out big time. This highlights the speed with which China automakers have grasped the nettle and are able to move so fast. They are unencumbered with old tech. Virtually every serious EV company is a start up.
Which brings me back to Tesla. It is impossible to not be impressed with this company. The sheer scale of what they have achieved is incredible. Half a million EVs delivered in 2020, the year of the pandemic. With three factories around the world going to open fully this year, no one looks like catching them any time soon. As a start up company in 2012 they have a very short history of car making and have only ever built EVs and focus intently on vertical integration – bringing everything ‘in-house’ wherever possible.
Exciting times ahead.
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