Blame Oil Price or EVs for Car Market Crash? Auto Recession Has Started

(edited)

This is a great article addressing the overcapacity of the American auto industry. Sedans are blamed for the collapse in sales, jobs loss, and recession. 

However, EVs are overwhelmingly sedans. Tesla and other EV producers continue to ramp-up manufacturing plants in the face of low oil prices and the lack of sedan demand. 

Additionally, rebate and incentive expirations drive producers to reduce profits and prices. To prevent the looming disaster, Tesla and other EV manufacturers are betting on low-cost Chinese production; all these are signs of a continued American auto manufacturing disaster. 

The article also subtly addresses a critical long-term cultural consequence of America's degradation, the Detroit Auto Show is moving to June next year. Mercedes, BMW, and Audi are not attending this year; the excuse of bad weather, is at best, disingenuous. The largest car market is now China. Detroit in the 1950s was considered the Paris of the west. Today, after liberalism and anarchy, the city is bankrupt in every way. There are signs of life returning, but very slowly and with major caution. 

The Next American Car Recession Has Already Started

 

Edited by Microbio-glutonist

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2 hours ago, Microbio-glutonist said:

This is a great article addressing the overcapacity of the American auto industry. Sedans are blamed for the collapse in sales, jobs loss, and recession. 

However, EVs are overwhelmingly sedans. Tesla and other EV producers continue to ramp-up manufacturing plants in the face of low oil prices and the lack of sedan demand. 

Additionally, rebate and incentive expirations drive producers to reduce profits and prices. To prevent the looming disaster, Tesla and other EV manufacturers are betting on low-cost Chinese production; all these are signs of a continued American auto manufacturing disaster. 

The article also subtly addresses a critical long-term cultural consequence of America's degradation, the Detroit Auto Show is moving to June next year. Mercedes, BMW, and Audi are not attending this year; the excuse of bad weather, is at best, disingenuous. The largest car market is now China. Detroit in the 1950s was considered the Paris of the west. Today, after liberalism and anarchy, the city is bankrupt in every way. There are signs of life returning, but very slowly and with major caution. 

The Next American Car Recession Has Already Started

 

This is a classic example of the volatile oil prices' effect on auto makers who cannot instantly respond to changes in consumer preferences driven by high or low gasoline prices at the pump.

Tesla's only hope is that it learns from the big automakers' mistakes. One thing Tesla should get loud and clear from this is that people don't want fuel economy or no fuel when gasoline prices are low. when gas prices are affordable, we want SUVs and utility vehicles because they are simply more practical and usable. this whole notion that people are waiting in the wings to buy Teslas because it's the right thing to do is silly.

As for the auto show, which is always been a huge deal here, I'm not sure where the disconnect is. But I would guess that apathy and ability to look at anything and everything online drives a big part of the auto makers who have pulled out. 

 

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Perhaps this is because young people are not as crazy about cars as their parents were, or because of Uber and Lyft, or because people want their next car to be an EV and they're waiting for new, more affordable models. I read an article that surmised that total car sales would go down as EV sales go up for that reason.

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(edited)

You're cherry picking the data to paint a false picture. Sedan sales are cratering in the US and it's not just US car makers. You can see the top 4 selling sedans in the chart below are Japanese. The rightmost column is yoy from 2017 to 2018. Notice Tesla's growth. Yes it's dramatic because they're filling all those reservations but the trend is clear.

317876726_sedansales.thumb.PNG.dc0751644dcc220f913b60578c5966ad.PNG

On 1/14/2019 at 8:53 AM, Microbio-glutonist said:

To prevent the looming disaster, Tesla and other EV manufacturers are betting on low-cost Chinese production; all these are signs of a continued American auto manufacturing disaster.

No. The only Teslas that will be made at GF3 in China are the cheaper versions of Models 3/Y. All S/X and more expensive versions of 3/Y will still be made in the US for worldwide export including China.

This is probably to take advantage of cheap labor/materials/no tariffs in China to make up for lower priced versions thus achieving close to or same profit margin as the higher priced version Tesla models.

By the way 80% of Bloomberg is clickbait gibberish.

Edited by shadowkin

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On 1/14/2019 at 4:53 PM, Microbio-glutonist said:

This is a great article addressing the overcapacity of the American auto industry. Sedans are blamed for the collapse in sales, jobs loss, and recession. 

However, EVs are overwhelmingly sedans. Tesla and other EV producers continue to ramp-up manufacturing plants in the face of low oil prices and the lack of sedan demand. 

Additionally, rebate and incentive expirations drive producers to reduce profits and prices. To prevent the looming disaster, Tesla and other EV manufacturers are betting on low-cost Chinese production; all these are signs of a continued American auto manufacturing disaster. 

The article also subtly addresses a critical long-term cultural consequence of America's degradation, the Detroit Auto Show is moving to June next year. Mercedes, BMW, and Audi are not attending this year; the excuse of bad weather, is at best, disingenuous. The largest car market is now China. Detroit in the 1950s was considered the Paris of the west. Today, after liberalism and anarchy, the city is bankrupt in every way. There are signs of life returning, but very slowly and with major caution. 

The Next American Car Recession Has Already Started

 

I thought auto loans are just maxed out at the moment. In 2016, Americans applied for and racked up $564.6 billion in auto loans. By the end of 2017, that number had jumped to $568.6 billion.

https://www.finder.com/car-loan-statistics

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1 minute ago, Auson said:

I thought auto loans are just maxed out at the moment. In 2016, Americans applied for and racked up $564.6 billion in auto loans. By the end of 2017, that number had jumped to $568.6 billion.

https://www.finder.com/car-loan-statistics

 

Good point! 

It appears many people are taking the same strategy with iPhones and autos. 

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5 minutes ago, Microbio-glutonist said:

Good point! 

It appears many people are taking the same strategy with iPhones and autos. 

Probably just a pause as the banks getting a bit tighter with lending criteria. I'm not sure how the total loan figures are calculated but I assume its on the list price of the car so its exaggerated as most won't pay that amount off just give the car back and stop making the payments after the 3 or 4 year term.  Lots of student loan debt too will never be paid off.

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2 hours ago, shadowkin said:

You're cherry picking the data to paint a false picture. Sedan sales are cratering in the US and it's not just US car makers. You can see the top 4 selling sedans in the chart below are Japanese. The rightmost column is yoy from 2017 to 2018. Notice Tesla's growth. Yes it's dramatic because they're filling all those reservations but the trend is clear.

317876726_sedansales.thumb.PNG.dc0751644dcc220f913b60578c5966ad.PNG

No. The only Teslas that will be made at GF3 in China are the cheaper versions of Models 3/Y. All S/X and more expensive versions of 3/Y will still be made in the US for worldwide export including China.

This is probably to take advantage of cheap labor/materials/no tariffs in China to make up for lower priced versions thus achieving close to or same profit margin as the higher priced version Tesla models.

By the way 80% of Bloomberg is clickbait gibberish.

4

Wow! That is a dismal looking chart. The YTD (140,317) vs. YTDLY (1,667) is insane. Is that current today, or December? 

Now that's Cherry Picking! :)

Everything on that chart is horrifying, which confirms Bloomberg is a highly credentialed and respected source. In fact, after about five free clicks, you must subscribe to get through the paywall, which is why you may not view the more in-depth reporting. Quartz is also an excellent high-end source that has a paywall. 

https://qz.com/1489228/beyond-the-tesla-bubble-the-future-of-electric-cars-is-being-scripted-in-china/

Every Internet source these days has ads and popups, so I agree with you that awareness of delusional people seeking to use illegitimate sources for troll status is sad. 

Cheer-up!  

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(edited)

1 minute ago, Auson said:

Probably just a pause as the banks getting a bit tighter with lending criteria. I'm not sure how the total loan figures are calculated but I assume its on the list price of the car so its exaggerated as most won't pay that amount off just give the car back and stop making the payments after the 3 or 4 year term.  Lots of student loan debt too will never be paid off.

And, $50 billion a month in reverse QE and higher interest rates. 

Edited by Microbio-glutonist
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4 minutes ago, Microbio-glutonist said:

Wow! That is a dismal looking chart. The YTD (140,317) vs. YTDLY (1,667) is insane. Is that current today, or December? 

Now that's Cherry Picking! :)

Well if it was current today that would be impressive of Tesla to have sold 140,317 cars YTD in 16 days. The chart is from December 2018. So the yoy is Dec 2017 to Dec 2018. Do you want to revise your statement about cherry picking? 😀

I know you're a Commie China hater so it will make you really upset that Bloomberg is a Commie China lover.

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(edited)

6 minutes ago, shadowkin said:

Well if it was current today that would be impressive of Tesla to have sold 140,317 cars YTD in 16 days. The chart is from December 2018. So the yoy is Dec 2017 to Dec 2018. Do you want to revise your statement about cherry picking? 😀

I know you're a Commie China hater so it will make you really upset that Bloomberg is a Commie China lover.

So much hate! So sad. Thank you for confirming the data. 

Edited by Microbio-glutonist

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11 hours ago, Microbio-glutonist said:

So much hate! So sad. Thank you for confirming the data. 

All I have to say is the green tax credits make Tesla very profitable. I wonder if the Chinese will copy Tesla after letting them set up a factory there ? I have said this before and I will say it again. A 2 ton high performance EV cannot be green. A bit like the Mclaren P1 or Porsche 918, both hybrids but I don't think anyone would argue they are green. 

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