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Recently GM announced that they would stop selling many of their sedans in the US (including the Chevy Volt). Ford made a similar announcement earlier. And I must have missed it when it happened, but I also read that Daimler/Chrysler made a similar statement even earlier? Makes me wonder if this is good news for Hyundai and anyone else left selling sedan/small cars in the US. A lot of those people who still like small cars will end up going to Hyundai, Toyota, Honda, etc.

Last weekend I had a two hour drive into Michigan. Just for fun I took an informal survey of vehicles driving the opposite way on the highway. My ballpark estimate of automobiles on the Michigan highway is:
20% small car / sedan
20% crossover / small suv
20% minivan
20% large suv
20% pickup truck

I'm sure the concentration of pickup trucks is much higher in other areas. But in Michigan I saw a good number of cars. As I was watching all those cars go by I was wondering why an automaker (three automakers actually) would want to abandon 20% of the market. I'm sure it all comes down to profitability and other big picture factors that I am not privy to. These are big moves after all. Makes me wonder what is the big picture.

And I read that Volkswagen is going into electric vehicles in a major way. Reorganizing the company to focus on EV's. And trying to partner with Ford on trucks and future tech. Picking themselves up after the diesel fiasco and rebuilding themselves anew.

Then I read that an automaker (cant remember which one, maybe GM) makes $30,000 profit on every vehicle sold over the life of the vehicle (includes service). But they think they could make way more profit per vehicle in the future with self driving/autonomous vehicles where people don't own cars anymore, they pay for rides instead.

So I read all these articles and I am trying to see the big picture...

There are a lot of big changes coming. Electric vehicles, autonomous vehicles, ride sharing, etc. I think the revolution of the auto industry is happening now. The big automakers see it and they are positioning themselves to profit from it. I am curious to see what happens next.
 

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Recently GM announced that they would stop selling many of their sedans in the US (including the Chevy Volt). Ford made a similar announcement earlier. And I must have missed it when it happened, but I also read that Daimler/Chrysler made a similar statement even earlier? Makes me wonder if this is good news for Hyundai and anyone else left selling sedan/small cars in the US. A lot of those people who still like small cars will end up going to Hyundai, Toyota, Honda, etc.

Last weekend I had a two hour drive into Michigan. Just for fun I took an informal survey of vehicles driving the opposite way on the highway. My ballpark estimate of automobiles on the Michigan highway is:
20% small car / sedan
20% crossover / small suv
20% minivan
20% large suv
20% pickup truck

I'm sure the concentration of pickup trucks is much higher in other areas. But in Michigan I saw a good number of cars. As I was watching all those cars go by I was wondering why an automaker (three automakers actually) would want to abandon 20% of the market. I'm sure it all comes down to profitability and other big picture factors that I am not privy to. These are big moves after all. Makes me wonder what is the big picture.

And I read that Volkswagen is going into electric vehicles in a major way. Reorganizing the company to focus on EV's. And trying to partner with Ford on trucks and future tech. Picking themselves up after the diesel fiasco and rebuilding themselves anew.

Then I read that an automaker (cant remember which one, maybe GM) makes $30,000 profit on every vehicle sold over the life of the vehicle (includes service). But they think they could make way more profit per vehicle in the future with self driving/autonomous vehicles where people don't own cars anymore, they pay for rides instead.

So I read all these articles and I am trying to see the big picture...

There are a lot of big changes coming. Electric vehicles, autonomous vehicles, ride sharing, etc. I think the revolution of the auto industry is happening now. The big automakers see it and they are positioning themselves to profit from it. I am curious to see what happens next.
I think the biggest issue facing American auto-makers in regards to sedans, is the best build quality went into their larger sedans, and when it came to compacts and sub-compacts, foreign-auto makers (Japan, Korea and Germany in particular) always seem to have higher build-quality there and styles that appeal more to US consumers.

It would be interesting to sub-divide each of those 20% blocks you found into country distribution. I would imagine that pick-ups and large SUVs would favour US automakers, and small cars/sedans favour non-US automakers, with the other categories being more or less equal. At least that tends to be my general observations in my area. I think the majority of sedans I see on the road are either Honda Civics or Hyundai Elantras. Most common pickups I see are always Dodge, Ford or GM makes. Large SUVs are generally GMs. Small SUVs or Crossovers, I see a lot of Santa Fes and Tuscons actually, as well as Toyota RAV4s, Kia Sorentos, Nissans, Subarus and I suppose a few US makes too. Minivans, I tend to see a slight dominance of Dodge Caravans and other US mfgs with some Toyota Siennas and Kia Sedonas and the odd Hyundai Entourage (I was told by my sales person these are generally sold as fleet sales now).

So I think while GM may be choosing to ignore 20% of the market, that 20% is really only less than about 5% of of their sales, while it tends to be the bread and butter of non-US manufacturers.

But they are also being smart in recognising that EVs are going to continue to increase in demand over the next 10 years, and they need to shift their operations to include more EVs. What I fail to understand is, why can't they convert their existing plants to meet the changing demands. Why do they have to shutter 5 plants completely. It seems a waste of resources and manpower, particularly in a day and age in which we need to reuse what we already have.
 

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https://youtu.be/aUC6lsLr04I

You may be interested in this take on wha the future may hold.
What a great video. Lots to think about and assess. And I think most of it spot on. However, one key constraint to EV adoption that I think was missed, is the availability of batteries. Most manufacturers (Tesla excluded) are limited in how many EV's they can produce (and therefore sell) because they can't get their hands on batteries. So unless that is solved the change over will not be as swift as they predict.

OB
 

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@Jonboy, car manufacturers market new car sales, rather than what's on the road. All the news reports and editorials I've seen point to an upward trend of large-vehicle ownership in the US. Likely due to how cheap gas has gotten compared to not that many years ago. Remember how when gas prices reached a peak 6-8(?) years ago and hybrid sales shot off? Same trend but reverse. Gas in my area of Illinois dipped to $1.87/gallon. Unheard of for years here.
 

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It looks like the video @Izakiwi2 posted addressed a bit of what I was talking about. Great watch, surprised it only has views in the tens of thousands. That kind of analysis deserves a bit more attention, it perfectly puts into words the adoption trends I've tried explaining to my family.
 

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Discussion Starter #9
...

But they are also being smart in recognising that EVs are going to continue to increase in demand over the next 10 years, and they need to shift their operations to include more EVs. What I fail to understand is, why can't they convert their existing plants to meet the changing demands. Why do they have to shutter 5 plants completely. It seems a waste of resources and manpower, particularly in a day and age in which we need to reuse what we already have.
My thinking also. They may just plan to close them temporarily. Maybe they are shifting there designs to a future EV platform but it is not ready for production yet. I also read that Volkswagen may partner with Ford to build cars in the US or buy one of Fords production facilities in the US. Either option sounds better than closing a plant. Or maybe the closed plants will get bought by an upstart EV maker like Tesla and Rivian did in California and Illinois.
 

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Discussion Starter #11 (Edited)
@Jonboy, car manufacturers market new car sales, rather than what's on the road. All the news reports and editorials I've seen point to an upward trend of large-vehicle ownership in the US. Likely due to how cheap gas has gotten compared to not that many years ago. Remember how when gas prices reached a peak 6-8(?) years ago and hybrid sales shot off? Same trend but reverse. Gas in my area of Illinois dipped to $1.87/gallon. Unheard of for years here.
Yeah, my wife bought gas for $1.97/gallon this week. I told her that is not right, gas should be priced higher. So I said I am boycotting buying gas to protest that the price is too low. She laughed cause she knows I hardly ever need to buy gas anyway.

If there is an oil glut due to increased EV's then low gas prices will dampen further EV sales. At least here in the US where they really like large SUV's and trucks.

I feel like I see this big disruption coming but I still get a lot of naysaying from my friends and co-workers. They just don't believe EV's will be that popular that fast. So yeah, I guess it's a mistake to assume the population in general would think and behave like I do.
 

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Discussion Starter #12
My dad has been reading some books about investing and picking stocks the way Warren Buffet does. Today my dad tells me that Buffet would not advise buying stock in companies that compete on price or whose main advantage is price. Then he tells me that Buffet has been buying stock in multiple airlines lately and asked puzzled, why would he do that, all the airlines compete on price? I'm not a stock analyst at all, but my guess is that Buffet knows there is an oil glut coming. And if there is a major drop in oil prices then airlines are sure to benefit from that.
 

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Discussion Starter #14
I found another interesting video on industry disruptions. This touches on the coming EV revolution and how it will disrupt the auto and energy industries. It's a long video but good.

 

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Discussion Starter #15
This is an absolutely brilliant article explaining why the US will be years behind the rest of the world in experiencing the EV revolution. And why the plug-in Ioniq is so hard to find in the US. And why Tesla has such an advantage selling EV's compared to conventional automakers in the US.

Coming To America In 2019 — Compliance Cars Only
https://cleantechnica.com/2019/01/13/new-electric-cars-on-the-market-in-usa-2019/

It's brilliant, it's true, but for me it's frustrating.

Hyundai and Kia already have orders logged for practically all of their 2019 electric vehicle production. In some markets, they’ve started talking about 2020 deliveries. It’s nearly impossible that Hyundai and Kia will have high sales in the US for their extremely compelling Kona EV and e-Niro, since they will prioritize other markets.
The reason not to sell in the USA is simple: As long as battery production is smaller than world demand, all carmakers are production constrained. To get to profitability in this new electric vehicle market, the markets where it is easy to sell with low costs are prioritized over markets where selling is hard and expensive.
But electric cars are destroying their business since most of their profit comes from services. They have little interest in explaining why a more expensive electric car is better than its gas-guzzling sibling. They have to learn many new details and technology that they may have no interest in learning. In other words, many hate to sell electric cars.
So, while automakers across the world are now producing and developing real electric vehicles meant to be competitive in their classes, the US will not see high sales volumes of these models yet because it is the hardest market to recoup costs and make a profit on this new powertrain. Since they won’t be sold efficiently or in high quantity in the US, the door will be left open longer for Tesla to swoop in and increase its market share.
 

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Discussion Starter #16
I found an interesting article about what GM should have learned from the Chevy Volt.
https://www.greencarreports.com/news/1122269_10-lessons-from-the-short-life-of-the-chevy-volt-2011-2019


As the Volt has been discontinued and the electrical revolution slowly marches on in the auto industry:


Looking back, Tony Posawatz, product manager for the 2011 Volt, mused that “perhaps GM should have started with a Cadillac version (given the higher costs) or introduced the originally planned crossover soon.”

it turned out that the plug-in hybrid Volt—with initially just 35 miles of rated battery range—covered more electric miles per day than did the early Leafs with more than twice that range. That spoke to several factors: lack of infrastructure, range anxiety even among dedicated EV drivers, and the confidence of having a backup gasoline engine if needed. Volt owners, it turned out, were more than willing to drive electric as much as they practically could—and hence discover they covered fewer daily miles than they believed, just as usage data predicted.

Nissan took a more cost-effective approach with its Leaf battery, which is passively conditioned, meaning it simply sheds heat into the air. In the hottest climates, or under repeated extreme use, Leaf batteries notably lose capacity over time—far more capacity than do Volt batteries. It’s notable that Tesla, too, has always used liquid cooling for its batteries.

In the end, the plug-in hybrid is an engineer’s solution to solving a specific problem: getting meaningful electric miles without paying the huge cost of a long-range battery pack. Reductions in battery cost far quicker than expected only a few years ago mean that tradeoff may no longer be necessary.
 

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This may be of interest... Renault looking to introduce low cost EV cars when lower battery costs can give adequate range and lower EV car costs. Said the Renault global electric vehicle programme director, Eric Feunteun.

https://www.autoexpress.co.uk/renault/106462/new-renault-electric-car-set-to-take-on-the-nissan-leaf-in-2022
I have spent 6 years asking my Renault dealer while there is no hybrid version of my (old) Megane. All they had was the pure EV Zoe with insufficient range and based on the batteries being effectively rented at a ridiculously high rate. For my normal mileage it was more than twice the cost of diesel.

So, finally I bought the Ioniq PHEV and found the car than I had been looking for the last 5 years.
 

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That sums up my views on Renault's Zôe and the Nissan Leafs.
After 12 years with my Laguna... i tried my best to run it into the ground but it was doing a better job on me!
 
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