Why Are Electric Vehicle Companies Worth So Much Money?
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I think they have a point – existing manufacturers will have to spend a lot of time and energy divesting themselves of all the plants and workforce that will become useless, and/or converting and retooling facilities and retraining staff as they abandon the manufacturing of internal combustion engines and navigate the transition.
All of that necessarily involves looking backwards and takes mental energy away from future-forward product development. Companies that don't have to invest a significant part of their management resources in dealing with legacy have a potential advantage.
Is it possible to be the hero who transforms a company and get rich doing it? Or do you basically have to make a lot of enemies to do the right thing and get no more money than if you just kept your head down while looking for a job at a competitor.
The Ford investing in Rivian thing also reminds me how Yahoo stumbled on for years as a zombie company, basically living off an investment they made in upcoming Chinese tech.
> Is it possible to be the hero who transforms a company and get rich doing it? Or do you basically have to make a lot of enemies to do the right thing and get no more money than if you just kept your head down while looking for a job at a competitor.
You might get rich transforming the company, but you certainly will make a lot of enemies.
Everyone at these car companies know that as the focus changes to EVs anyone with skills related to the combustion side of things will see a reduction in status and probably pay. Few of those people are anxious to this transition happen during their career and they will not be happy with people who expedite. This is true to a lesser extent with people whose skills are transferable to EV but work in combustion now. To progress a career you generally need to lead new projects and those projects require resources. So to keep skilled people running your combustion business you need to offer them the resources to run these kinds of projects to progress their career even if the money would be better spent on EV development. These people will also fight against money being allocated to EV development rather than their own projects.
EV companies don't have these problems. They have piles of cash and a mandate to get it out the door as fast as possible. Inside the company, everyone's career trajectory is more or less aligned with the company's and so there's no foot dragging.
https://www.statista.com/statistics/541390/global-sales-of-p...
Not long ago, the incumbents ridiculed Tesla and did their best to publicise various teething problems at Tesla .. production delays, fit-and-finish issues, etc.
That's a human reaction from people who've invested their whole careers into building IC engines. But it's precisely indicative of foot dragging: rather than focusing on leveraging their greater manufacturing expertise in the fight for EV market share, they underestimated the challenge coming their way.
I think this phrasing paints people at these companies as being dumber or less perceptive than they are. People are simply acting in their own best interest rather than the company's. People absolutely downplay the EV threat beyond what they believe in order to further their own interests.
I would also say some of the foot dragging is just leadership not having limited capacity to think about different things. Leadership needs to keep an eye on all the existing supply chain and manufacturing stuff while also managing the EV side closely enough to be able to understand the benefits of different initiatives.
Dieselgate may end up being the best thing that could have happened to Volkswagen as they were all in on extending combustion as far as possible before they got caught cheating. They have made an excellent pivot to BEVs in a pretty short time for such a large company, with MEB designed to produce profitable vehicles not just compliance cars.
Ford is also really embracing electrification, with their two most valuable nameplates already getting EVs in F-150 and Mustang (even if it is a crossover and not a pony car). I'd like to see them have more aggressive plans for ramping up production, but announcing doubling their plans for 2024 recently was a good start.
On the other hand, Toyota looks poised to be dragged kicking and screaming into a BEV, Honda's response has been pretty underwhelming (even if I'd camp at a Honda dealer to get an e if they brought it to north america), and Nissan has completely squandered any early lead they could have built from Leaf.
Everyone else is somewhere in-between, with GM making some interesting moves in Volt and Bolt (terribly confusing names) but lacking a strategic vision, Stellantis seems content to dabble (but that's true of their ICE plans as well), and JLR is planning BEV Defender and Range Rover which done well could be real hits for them.
*edit: totally forgot the Koreans. Kia/Hyundai are in the enthusiastic group, with the new e-gmp platform using 800V batteries and the ionic 5 being the best looking car you can get right now.
Super cheap EVs from Chinas companies will for sure disrupt in the lower end but not everyone will want something like that.
The race starts a new, and the technological advances of the previous years have been annihilated. Add to that, that the new value generator in cars is clearly software- a field were the old car companies have shown no expertise and voila.
EVs became a meme for revolutionizing the car industry in a way people perceive will be as profound as Karl Benz first car or Ford Model T.
So naturally boys of every age want to be part of this movement and pump their savings (as well as their clients savings) into EV companies, even though manufacturing is a terrible business.
Everything market related it's about meme power of the story and meme power of the product, perception is very much reality. As I said boys love for cars starts at 2 and never ends, unfortunately very few dream about building an artificial heart or defeating parkinson or alzheimers, curating diabetes, solving cancer etc.
It's not just regular people actually. Boys love for toys trascends IQ, Feynman and Von Neumann loved the process of building the most deadly toy know to mankind (nuclear weapons) , but they both died fairly early due to cancer, and they both knew that cancer or cardiovascular disease would have been the thing which would have gotten them (much like any other human), but still they didn't feel compelled to do something about it, they decided to employ their time building toys instead.
Cars, rockets, missiles, planes, bombs , they all fall under the same umbrella of toys.
with cars being #1
Just think of all the billions of dudes who lived and died unfulfilled before the invention of the automobile.
Plus given that they are dead I can’t see why their brains and hearts are material to the success of EV STOCKS.
The dead can’t buy stocks
Anyway who's talking about stocks, I'm talking about dudes and their 'love for cars [that] begins at 2 and never ends'.
Well, I just decided that building an artificial heart or defeating Parkinson or Alzheimer's, curing diabetes, solving cancer are under the umbrella of hobbies. Why should people be so preoccupied with hobbies? Hobbies have their place but it seems silly to dedicate ones life on something as trivial as a hobby.
They fall under the umbrella of survival, because as things stands today , you know that one of those things will eventually be the thing which gets you . Very much like Feynman and Von Neumann knew too, but decided to dedicate the practical part of their theoretical skills to building a toy such as the atomic bomb
Since humans already survive, they do not. Just like humans already can move from point A to point B without cars or planes, humans survive without artificial hearts. So those things are hobbies in the same way cars and planes are toys.
Any human will die at some point without artificial hearts, meaning all humans are slowly dying due to non availibility of artificial hearts, further meaning that all humans are slowly failing to survive without artificial hearts.