Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 1
In the back of my mind, I suspect automaker's stampede into EVs was motivated, primarily, by the sort of ATP and GP that Tesla used to report. The folks who had been in the business for over a century saw the numbers an upstart was posting, and figured EVs were easy money.
oops.
So, having spent Billions building factories to produce EV batteries for EVs they will never build, now what? Ape another Tesla product!
Automakers like Ford and GM are jumping into a whole new business where Tesla is a serious player
Ford said in December it would convert a Kentucky battery factory it had recently built with partner SK On to make batteries for energy storage. It also plans to devote some factory space to make cells for residential storage at a factory in Marshall, Michigan.
Ford is still using the Marshall plant to make batteries for an upcoming midsize electric truck. It has spent about $10 billion on both the Kentucky and Michigan factories and is spending another $2 billion to grow the energy business, according to the company.
Ford’s crosstown rival General Motors founded GM Energy several years ago, then released a Tesla-like residential solar product called the PowerBank in October 2024. Last year, it said it would partner with Redwood Materials to used both old and new EV batteries for energy storage.
GM Energy said in October that sales had quintupled since January, with 30% month over month revenue growth. Apart from the PowerBank batteries, the division also sells charging adapters and tech for using the vehicle itself as a backup battery for a home. https://www.cnbc.com/2026/01/15/ford-gm-tesla-ener...As the article points out, right now, storage products are showing fat margins and rapid growth. But, when everyone jumps in, will growth and margin evaporate, like they did with EVs?
Steve
No. of Recommendations: 7
But, when everyone jumps in, will growth and margin evaporate, like they did with EVs?
Sure. That’s one of the basic tenets of free market-ism. When McDonald’s shows that fast food can be wildly profitable, you suddenly get Wendy’s and Burger King and Roy Rogers and Arby’s and a thousand others, which compresses margins all around until some are so skinny they go out of business.
A few with somehow lasting durable advantages (Moat is the vogue term) stick around but they are rarely as wunderkind as their former glory. The Big 3 have been late, late, late to the party so many times you wonder if they’re just completely asleep.
Actually I don’t wonder any more. I’m pretty sure of it.
No. of Recommendations: 0
Actually I don’t wonder any more. I’m pretty sure of it.
Like the management at the pump seal company I worked for. They would rather make excuses, and play golf, then really compete.
Steve
No. of Recommendations: 6
The Big 3 have been late, late, late to the party so many times you wonder if they’re just completely asleep.
The reality is the car business isn't that great and hasn't been for a long time. Making cars is capital intensive and low margin. Those are two things that don't go well together in a business. Henry Ford II famously said "mini-cars mean mini-profits." Detroit has never really gotten away from that mindset despite Japan eating their lunch in the 1970s. The marginal cost of making a big car instead of a small car isn't that much, but you can sell it for a lot more. So big trucks are where it's at.
The math doesn't really math for big truck EVs though. Big trucks are heavier, have more rolling resistance, need more energy to accelerate/stop, need extra energy for payload/towing capacity, etc. So to keep the range reasonable, you need a proportionally much bigger battery than a smaller truck or sedan. But the batteries are the most expensive part. And the bigger batteries add weight, which means you need even bigger batteries, which adds more cost...
...which means no one wants your F-150 Lightning.
There are a few general problems with mass EV adoption too. As we've discussed, EVs aren't very practical if you can't charge where you normally park. They make more sense if you have a second ICE car for long trips. Some people have false fears of range anxiety (I kid! I kid! Sort of). Bottom line is there are a lot of people who aren't going to buy an EV. Not for a while anyway.
That said, I think Tesla is making a mistake by giving up on the car business. Of course, they haven't quite given up on it, but they are holding off to one side like stinky bag of diapers and acting more like the Big 3 than a young upstart. There are still a lot of niches to be filled. One is the smaller/mid-size two-seat pickup. That's wide open, you can't even buy an ICE version anymore. A true entry-level mass market coupe, mini-van, etc. Instead in the last few years we've only seen the cybertruck (see commentary on the F-150) and the seven seat Model Y. They haven't even refreshed long in the tooth models like the Model 3, which was never a thing of beauty to begin with.
No. of Recommendations: 0
"In the back of my mind, I suspect automaker's stampede into EVs was motivated, primarily, by the sort of ATP and GP that Tesla used to report."
And that blew up in their faces. Now Ford & GM have pinned their hopes on hybrids.
I get the feeling Ford & GM are tossing shyte on the wall and waiting to see if anything sticks.
No longer term planning; just grasping at straws.
https://www.reuters.com/business/autos-transportat...Ford (F.N), opens new tab is in discussions with BYD (002594.SZ), opens new tab to purchase batteries for its hybrid models, the Wall Street Journal reported on Thursday, at a time when the Detroit automaker deals with waning demand for electric vehicles.
The two companies are still discussing how the arrangement would work, the report said, citing people familiar with the matter. One option being considered is for Ford to use BYD batteries in markets outside the U.S., the report said.
The deal, if it goes through, would give Ford access to cheaper batteries and advanced technology from one of China's largest EV makers.
This comes as North American automakers scale back their costly EV push after struggling to keep pace with Chinese rivals, losing out on tax credits and pivoting toward cheaper models and hybrids instead.https://gmauthority.com/blog/2026/01/gm-still-work...Barra also reiterated that GM is actively working on a hybrid and plug-in hybrid strategy for the U.S. market.https://www.carscoops.com/2026/01/gm-plug-in-hybri...General Motors is finally stepping into the plug-in hybrid game, a move that’s been a long time coming.https://www.motortrend.com/news/next-gen-general-m...A New Wave of GM Hybrids Should Show Up By 2027
GM’s only hybrid is the Chevrolet Corvette E-Ray and its only plug-in hybrids are sold in China. We have had precious little detail. But now we know the timeframe. Barra said GM will introduce some hybrids in 2027 in keys segments, but not across the board.
No. of Recommendations: 0
Supply-side economics, American industry has been on the back burner for decades.
At least they are not paying much in taxes, said sarcastically.
No. of Recommendations: 6
long in the tooth models like the Model 3, which was never a thing of beauty to begin with.
Hey, I resemble that remark! Although you're right about the aging design, of course.
As is true of several other carmakers.
The difference being that Musk is to ADD to even want to or learn how to run a car business. After 7 years of mass production, people STILL:
- can't get excellent training and "thank you, is there anything else we can do for you as you take delivery of your $50,000 vehicle?" service.
- can't take their cars anywhere except sparse Tesla service centers or mobile service for anything except tire rotations (except a very few independent EV shops scattered across 5 states)
- can't get parts inside of months if the car is damaged.
- rely only on the big Ipad in the center of the car (unless you drop $100K+ on a newer S or X)
- can't get a more basic model in the $25-$30K range.
It's a good thing the cars are fun, nice & low maintenance to drive and the supercharger network and the software & their updates are still excellent.
I wish Musk would spin it off or let an innovative car person be the independent CEO.
FC
No. of Recommendations: 0
And that blew up in their faces. Now Ford & GM have pinned their hopes on hybrids.
I get the feeling Ford & GM are tossing shyte on the wall and waiting to see if anything sticks.
No longer term planning; just grasping at straws.Meanwhile...
Stellantis Ditches Plug-In Hybrid Models, Tech That Struggled With U.S. Buyers
Stellantis’ disclosure early this month of the Wrangler model discontinuation affects another Jeep with PHEV capability, Grand Cherokee 4xe, the Chrysler Pacifica plug-in hybrid minivan and the Alfa Romeo Tonale plug-in. Earlier, Stellantis cancelled the Jeep Gladiator 4xe pickup truck. The Dodge Hornet plug-in imported from Italy was canceled due to tariffs, according to the Automotive News.https://seekingalpha.com/article/4859841-stellanti...Several years ago, there was a joke meme making the rounds: a Tesla, stopped on the road, with a dead battery. The Tesla was being recharged by a gas engine driven generator. Apparently *that* is the new hotness now, an "extended range EV", which carries a gas engine to recharge the battery, aka, an "EREV".
To me, it looks like a mad dash to create some sort of narrative so that automakers don't need to write off even more of their EV investment.
Steve
No. of Recommendations: 5
Several years ago, there was a joke meme making the rounds: a Tesla, stopped on the road, with a dead battery. The Tesla was being recharged by a gas engine driven generator. Apparently *that* is the new hotness now, an "extended range EV", which carries a gas engine to recharge the battery, aka, an "EREV".
Must have been many many many years ago. The first hybrid was available in 1901, by Porsche. But assuming you meant in the modern era, the Prius came to market in 1997, so 29 years ago.
The first plug-in hybrid was in 2008, so 18 years ago.
Funny joke. Ha ha.
No. of Recommendations: 1
The first plug-in hybrid was in 2008, so 18 years ago.The new new hotness, the EREV, is not a hybrid in the conventional sense. A conventional hybrid uses the gas engine and the electric motor to both drive the car. In an EREV, the gas engine does not drive the car at all, The gas engine is only used to charge the battery, just as in the joke meme about the Tesla.
This is the sort of meme I am talking about. A joke then. Now legitimized by big three CEOs.
https://www.snopes.com/fact-check/gas-generator-te...Steve
No. of Recommendations: 1
Out of our 3 EVs, two of them are Tesla model 3s.
can't get excellent training and "thank you, is there anything else we can do for you as you take delivery of your $50,000 vehicle?" service.
This is indeed true. But I think it might be by design. The first one I took delivery of was during the COVID era, I paid for it via the app, I received a message that it was ready for pickup, I took an uber to the service center, and then I wandered all over the place looking for someone to help me. Never found anyone, they had "kids" working there that had no interest at all. Finally, I looked more closely at the app and it said on the second page that I should go to a specific spot in the parking lot to find my car. I found it, and it had a welcome page printed with my name on the dashboard( really quite nice). It was plugged into a charger in their lot, so I did my inspection of the car right there while it was plugged in, took about 40 minutes total. Then I got in the car and drove away, stopped at a friend (who picked up his first Tesla a few days earlier) who lives nearby to compare notes. Then I drove home. Sometimes the next day the app kept nagging me to "accept delivery" of my car, I was supposed to do that before I drove away from the service center, but I did it the next day instead. For our second delivery, it was similar, but since it wasn't the COVID era, we wandered around the service center, sat in a Cybertruck briefly, and marveled at how many deliveries were happening simultaneously that day. But still didn't really interact with anyone (other than some casual conversation unrelated to our delivery), just find the car in the lot, see our name on it, and drive it away.
can't take their cars anywhere except sparse Tesla service centers or mobile service for anything except tire rotations (except a very few independent EV shops scattered across 5 states)
I change my own air filter, and I refill my own wiper fluid. And I brought the car to a regular tire store to get new tires (my friend brought his to Costco for new tires). For most other things, Tesla has come to my driveway and performed all the service there. VERY convenient. I think I've had to bring the car to the actual service center only 4 times in nearly 5 years. Twice I had to leave the car there and they gave me a loaner. The last loaner was a Cybertruck, absolutely amazing vehicle, and a dream to drive, but I don't think I'm a "truck guy".
- can't get parts inside of months if the car is damaged.
From most reports I've seen, while this used to be a HUGE problem 3 or 4 years ago, it is much less of a problem today.
- rely only on the big Ipad in the center of the car (unless you drop $100K+ on a newer S or X)
Almost all the controls, even on the S, X, and CT, are on the big screen in the center. But I don't have any difficulty with it. They are mostly intuitive, and easy to use. And for anyone that hates touchscreens so much, they can simply use their voice to control almost everything. And there are still a small variety of controls on the steering wheel (audio volume for example). And now with grok in the car, it really understands a lot of what you say, it's kind of incredible ("I need to stop at a post office, and then a supermarket, and after those errands I need a haircut", grok will do all the routing, and then I might say "Oh, please choose the supermarket that has a charger in their lot" and it'll do that too).
- can't get a more basic model in the $25-$30K range.
Nope. The average new car is about $40k at this point. And Tesla cars are above average. But there is a lot they could improve, of course.
