Nikon1

Seems to me that this whole PUSH from ICE to EVs is not having much of a positive financial effect on the companies that prematurely jumped in with open check books. The thread and article is from Reuters:

Complete Article

The short version highlights!I’m not sure how (or, if) Audi responds to this change in the American market as we are their second biggest market (behind China) in sales by division. Has China built up their EV infrastructure faster / better than the US?

I do not foresee an EV sitting in my garage ever — unless battery technology progresses to a safer medium than LiOn and mileage between charges increases while battery weight is reduced.

As always — YMMV!

— John

m444

China is all in on BEVs and PHEVs

https://reglobal.org/china-could-sur...e-by-2025-iea/

https://www.reuters.com/world/china/...ll-2024-04-23/

https://cleantechnica.com/2024/05/26...-sales-report/

Glisse

Not sure it will affect Audi much at all. The US had always been predicted to have a relatively low and slow take up rate on EV. The Reuters article referenced a reduction in global demand for EVs, and how that was impacting on US based global manufacturers. Note that GM and Ford EV's for the Chinese market will be manufactured in China under joint ventures, so the downturn affecting US based manufacturing will be for European sales, as well as US sales. Also to note is that sales have not gone backwards - many manufacturers had crazy high estimates on EV demand.

The situation in Europe and China is different. The replacement of ICE via EV was mandated by government intervention, not by consumer demand or manufacturers deciding they would prefer to make EV's rather than ICE vehicles. No carrots, just a big stick. However, things are going off the rails a bit.


Source: ourworldindata.org IEA global EV outlook

In Europe, despite the EU's draconian targets and monstrous penalties for manufacturers missing them, it is clear there is no possible way that sufficient infrastructure could be put in place for charging and electricity grids, etc, to meet the ridiculous timetables. And governments now don't want to pay anything to facilitate this, nor do consumers want to pay the high prices for EVs, etc. So the focus is shifting to hybrids. That way everyone saves face.

In China, the same trend is evident, as m444's links show. Although China is hardly 100% EV, they are at 40% or so. There is massive competition within China, so prices are dropping and foreign brands either have to cut margins or lose market share. And that then flows externally with vested interest from European and US manufacturers desperate to keep margins above water and merging with geopolitical interests to wack huge tariffs on Chinese made EVs - 100% in the case of the US, and a tiered range between 17% to 36% in Europe. This serves to keep EV pricing high, of course. So dampens demand. Given China completely dominates the battery supply chain, it will be interesting to see how all this works out. Not well, I suspect.

As for Audi and the US, of course the US is an important market, but maybe not as significant as you think. And Audi does not make a profit in the US, and IIRC never has. Herbert Diess said a couple of years back that VAG's objective was to break even in the US: Porsche make a profit, VW are break-even by selling low cost locally produced product, and Audi make a loss. So the incentive to sell EVs or hybrids (which are expensive to make) in the US is tempered by the fact they will likely make a loss on every one they sell. Audi/VAG seem to be holding on to a dream, shared by others, that they can make big margins by selling software. After all, Tesla has been saying the same thing to shareholders for a few years, and that seemed to work out well for their share price. Personally, I think they are dreaming if they think they will make billions from software, and will awake to a nightmare. Putting aside their fantasy on software margins, their focus remains on Europe, and then China. Not the US. If you want a German premium brand that loves you more, BMW probably a better choice. They must make more vehicles in the US than they do in Bavaria. Although IIRC US market 3 series, and same for Mercedes C Class, are coming largely from South Africa.


Data from Audi Financial reports 2023

AgMaple

There is one important thing to remember about China's 40% EV penetration. They are building gas and coal power plants like there is no tomorrow to keep electricity costs down.

m444

Yes, plus they have lot of Dam Hydro power. They are also investing in cheap solar
They have cheap battery & solar technology.

The government makes the decisions, not the citizens.

m444

In the US things are different, for instance with current California Power rates ($0.39/Kwh to $0.59 Kwh), an EV cost a lot to charge.
Rs5 etron GT has 93 Kwh battery.

Nikon1

And yet in California there is, at different times during the day, a glut of solar power available, so much so that the electric grid cannot handle it and it’s going to waste. As a country we are so behind on updating & improving our power grid infrastructure.

Once again our Government seems to be putting the cart before the horse.

— John

m444

AI server farms are adding to the power shortage.

The grid and power infrastructure needs a lot of updating. Often transmission line improvements are limited by private land access. This is not an issue in China.

Nikon1

I read a paper on this several years ago — though I cannot recall the publication (old age syndrome) — and a quick search did uncover this updated article covering much of the same data but at a much higher level.

Re-cableing The Electric Grid

which, in theory, eliminates the whole private land discussion as they are not seeking new property easements rather just stringing new cables on the existing high tension towers that the power companies already hold easements on.

I’m sure the power companies study the ROI and question the results. It is all about the short term returns not the long term gains. Money, money, money.

— John