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Comment by ak217 | Hacker News Reader

Mazda also managed to squander a huge brand and structural advantage by falling into lockstep behind other Japanese automakers in underinvesting in EV manufacturing infrastructure. Now they have to rely on their JV partner Changan to lead the way in producing EVs, giving up the core structural strengths that Mazda previously had in designing and building their own components - including software and controls, which in the Changan-led models have no continuity at all with Mazda's domestic models. They just superficially copy the Mazda exterior design language while wholly dependent on Chinese supply chains (and some Android Auto for the software, it seems) for manufacturing the actual EV.

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While that might affect their market share in HN neighborhoods I assure you Mazda is making money hand over fist selling their boring non-hybrid SUVs to normal people. People love them and they sell.

I know Mazda makes good boring SUVs, I own one. I like Mazda's design philosophy, that's why I want them to succeed. In terms of vehicles sold, Mazda's sales peaked in 2017, the year before I bought my most recent one. As best I can tell, operating profit peaked in 2016.

Mazda maintained their relevance and independence by operating their own center of design, engineering, and manufacturing excellence in Hiroshima, and exporting the results to the rest of the world, since at least the 1960s. As I mentioned, that thread is now broken as far as EVs go, with the Changan JV making EVs for Mazda. China is now producing excellent EVs that surpass the capabilities of ICE cars at a fraction of the cost/price, thanks to continuous improvements in LFP battery technology. China also dominates solar, which (together with the batteries) solves the grid stress issue for large EV deployments in most regions of the world. Together these exports are likely to disrupt Japanese, US, and European ICE exports and energy markets throughout the world, no matter what tariffs the US chooses to enact.

Mazda and the rest of Japanese companies slept on it, led by Toyota's trust in the hydrogen-powered future that didn't materialize, even while Panasonic had the best batteries in the world. The time to invest in these platforms and technologies was 15 years ago - now they will have a far harder time financing this and finding technology development partners. Sure, they can survive - not thrive - on existing ICE exports for a while, but they will face a shrinking market and stronger headwinds - and are likely to lose their independence, which is what allowed them to design great cars. Don't believe me? Look into what's going on with Nissan (which squandered an even bigger lead - the world's first mass-produced EV).

They have a low single digit percentage profit margin. That is not making money hand over fist, that is barely surviving.

https://www.mazda.com/content/dam/mazda/corporate/mazda-com/...

Mazda’s operating margin is higher than Walmart’s (along with many others). I think hyper scalable sectors like high tech and finance distort our OM expectations.

Operating margin is irrelevant, only profit margin matters for this context. Walmart hangs out in the 2.5% to 3.5% range, not materially different than Mazda. Either way, any business with a low single digit profit margin is not making money hand over fist. It might be different if Mazda had such a huge and loyal market share that their low profit margins are offset by low volatility of expected future sales (such as with Walmart/Costco), but that isn't the case at all with Mazda.

Their expectation is that their sales will be stagnant at best, but probably decline for the foreseeable future.

That doesn't seem unusual for automotive. What number were you expecting to see?

It's not about unusual, just that a low profit margin in a volatile industry is (with a downward trend in sales for almost 10 years), by definition, not making money hand over fist. That is why their market cap graph looks like this:

https://companiesmarketcap.com/mazda/marketcap/

A lot of people still don’t want or can’t really afford EVs given their limitations. I’d say it’s the majority where I live. I directly know only one person who has a full EV (not a hybrid).

I don’t think the Japanese automakers have squandered anything, yet.

We paid maybe a $10K premium for a used EV truck. It gets 2mi/kWh. Most parts of the country are paying ~ $0.125 per kWh, so that’s &0.06 of a dollar in electricity per mile.

A comparable truck gets 18mpg mixed. At $3/gallon, that’s $0.16 per mile. So, the price premium pays back after 100K miles. That’s comparable to milage driven during a long car loan.

I ignored oil changes, tax breaks on used cars, and picked the form factor where EVs are the least economical.

It’s still basically break-even.

For commuter with charging access at office or home EV makes sense. For me making 300+ mile round trips with no charging infra (pull in at the gas station in the foothills) and low overall mileage EV is trickier.

If that’s your common use case (with no stop on the destination side of the trip), then it’d limit your options to high range vehicles.

There's a stop, it's just in the middle of nowhere. 20 minute charge would be annoying but survivable assuming they had them in say Lone Pine. And yeah, 20 something mpg and 16 gallon tank multiplies out to a large range.

You're in luck! There's a dozen Superchargers available right in downtown Lone Pine: https://www.plugshare.com/location/60596

Including supply and generation, we pay $0.148 / kWh, and yeah, I average $0.06 charging my EV at home on a slow, inefficient 120V / 15A. (Some day I'll upgrade, maybe.) I've never charged anywhere else (except for free at the used car dealer where I bought it.)

We make a ~180 mile trip roughly once / month and could charge on site as we always stay ~2 nights, though probably slow 120V / 15A charge (aka Level 1). My current car would probably be pushing it, range-wise, but I definitely think for the vast majority of our usage, we could be using only EVs if we got one with a 300+ mile range (based on 100% battery usage.) From what I've read some EVs (like mine) struggle a bit below 15% and start to run in "limp" mode.

China is currently making affordable EVs, though they might not meet (American) expectations of things like range. There’s no reason why traditional automakers couldnt be doing the same had they not focused on larger ice vehicles, hydrogen, or the luxury market.

Hopefully they figure it out because I love my Mazda 3 hatchback and would buy an EV version of it in a heartbeat. Not only is it very fun to drive (I have a manual transmission) but the interior design is excellent.

Mazda's target market is quite different from the EV buyers one, at least here in Europe.

Its reputation is that of a brand for people who really like cars, who can appreciate the care put into proper engineering and a wonderful manual transmission; or people with an eye for a "conservative" kind of quality. It's basically the new Volvo, but sportier.

> underinvesting in EV manufacturing infrastructure.

This has been a fantastic decision, as a large number of EV manufacturers have gone bankrupt.

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