Chinese Carmaker Overtakes Tesla as World’s Most Popular EV Maker
Chinese Carmaker Overtakes Tesla as World’s Most Popular EV Maker
Elon Musk once scoffed at the notion that BYD could compete with his company. Now, the automaker run by billionaire Wang Chuanfu is poised to be the new No. 1 in electric vehicles.
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No one has tried to make a fully 48v vehicle because suppliers don't want to commit to making parts unless auto commits. Auto doesn't want to commit unless suppliers commit. It's a chicken and an egg problem, and Tesla just forced the transition by saying fuck all this bullshit, were doing it even if we have to make more of the parts ourselves. Doing hybrid systems just increases complexity even if they do get some of the benefits. I know Porsche is VW, I just called them out specifically because they are low volume high margin and could take the risk. That's why I said high volume. Porsche might be able to do it as an engineering test bed before 2030.
The 48v system will save them a lot of money on copper, simplify the wiring harness, enables things like steer by wire without super chonky wires and I'm sure there's other hidden benefits like being able to get rid of, or make smaller heat sinks. Smaller parts as well as they don't need to handle as much current? There are all sorts of cost savings by doing it.
You really aren't looking past what you see on the Cybertruck unfortunately, and the majority of people aren't and never will. I can't convince you otherwise, but it IS a engineering marvel even ignoring the stainless steel. Even the stainless steel stuff has some amazing engineering behind it (they actually did get micron precision on the laser cut parts by creating a new cutting laser), even if it is a terrible idea in the end. You're dismissing steer by wire but that's nothing to do with the CT, it's them leap frogging others in engineering that's going to be in all their future cars which will have large cost savings and be safer in an accident.
Here's VW talking about the 30hv10h - https://www.reuters.com/business/autos-transportation/giga-casting-robots-how-volkswagens-trinity-aims-catch-up-with-tesla-2022-03-31/
The thing with the 4680 cells isn't the size (although it's apparently the ideal size for volumetric density for a single layer battery, but the size isn't special). It's the tech inside the battery. They have dry coated electrodes and are working on dry coated cathodes (I might have that backwards) which is tech special to them. Everyone else uses a wet slurry that then needs to be dried out in huge areas and involves harsh solvents. It cuts down on the space and time to make a battery. Making the dry coating work at high volumes has been a problem point for them. It keeps getting better each quarter as they figure out the problems as they come up, but it's not where it needs to be yet, and they thought they'd be further along.
It also uses a new tabbed technology which allows them to better manage heat within the battery working around some of the problems you encounter with larger cells. Instead of all the power going through a single tab, there are numerous tabs in the cell spreading the heat out vs 1 point. Tesla has patents on the dry coating, but not sure where things stand on the tabbed structure. My guess is anyone making 4680's for Tesla (others will make them too) will also be using the tabbed tech. I don't know if Tesla will give them the dry coating tech.
They also are working on special ways to get silicon into the battery but they haven't done it yet, it's just part of their future plans to stay competitive, but that'll be a key piece to watch.
The goal of them though isn't to be the absolute best cell on the market, but to be designed in a way they can scale it and make terawatt scale factories that are smaller footprint than the gigawatt factories of today. They might not have the best wh/kg of the most modern cells, but they'll be the cheapest and most easily mass produced. Thats the plan anyway.
It'll be more years until it's realized and we know if they can pull it off. IMO if they can't pull that off, there's no way they'll be able to make the 10+ million vehicles they want to make at the costs they are thinking. Even the 5+ million with Gen 3 would probably be at risk without success on these cells.
I think the biggest threat to that is going to be solid state batteries. They always seem to be around the corner, Toyota has been saying a few years from now for like a decade, and even then they talk about only having supply for 50k cars for years once in production. I do believe were going to see them in 2024 in a Chinese EV, but the real issue is getting the costs down, and making them easy to mass manufacture. We don't know what that looks like yet for that Chinese company as not enough info has been released. Keep your eyes on this one if you're interested in battery tech. (Edit: Oh, and these might be big in aviation before cars. Aviation can eat the higher cost, and needs that power density. Looking forward to seeing what happens there)
I can't imagine Tesla isn't researching them behind the scenes as well, but an unexpected breakthrough in being able to cheaply manufacture them at scale could upend their 4680 plans. It would really upend everyone if that happens, BYD included.
Toyota has been saying a few years from now
Toyota is full of shit regarding EV, they are not competitive at all on EV, so they try to make people not by an EV now, but wait until the next car. Toyota has wasted their research on Hydrogen, and that's going nowhere fast, that's a point where Musk was right already 10-15 years ago. But that was before he got weird.
I read the article from the link you provided, apparently VW plans to build 40 million cars on the new "platform", so Tesla making 20 million will not make them surpass VW and Toyota.
Apparently VW can already make a car in 14 hours, so not that far from the 10 claimed by Tesla, and apparently there are downsides to using the big body parts Tesla uses, in for instance a car is more expensive to repair, and therefore also more easily totalled. AFAIK the machines Tesla use to press those big parts are from Italy, and I bet they tried to sell it to other car makers too.
Regarding the 48V, I would still claim it's a non issue, you could easily go to 48V, and then use voltage regulators to correct locally if necessary. Voltage regulators are dirt cheap today, and are probably already used in most places inside the electronics. So in most cases it's merely a matter of using another regulator, at about zero cost.
Toyota is full of shit
Got a huge laugh from me lol. Well said.
The 30 vs 10 was specifically for EVs. They haven't figured it out yet on their electric vehicles.
A lot of people say what you have about the castings having problems on repairs, but what actually happens is if the accident is big enough to reach the casting, the car is totaled anyway castings or not. They have replaceable crush bars for smaller accidents. It's not as big a problem as people think. Everyone is going to switch to castings to stay competitive, and some already have.
you could easily go to 48V,
You might think that, but legacy has been talking about it for decades now, and hasn't. One of Tesla's leads in the video I linked shows a circuit board which handles many things, and on it, they talk about stepping down to 24v for the audio amplifiers which are on the same board, which they also want to make 48v in the next iteration. The thing is, those are custom in house designed circuit boards. Legacy outsources most of that stuff, they aren't as vertically integrated on the power electronics and can't just do that easily.
That's why it's a chicken and egg problem for them with their suppliers.
Edit: oops, and ya, we'll see if VW can do 40 mil, but the 10x part doesn't need to include that, even VW then would be worth way more. We're looking at what things are worth today and projecting out.
Edit: just to clarify the above edit, if Tesla does make 20 mil vehicles with high margins, even if VW makes 40 mil with high or low margins, Tesla would still be worth a lot, and VW would be worth more as well with the variability being are they high or low margin. The valuation will come from the revenue and profits and future growth outlook.
I think the reason legacy hasn't switched to 48V, is that the benefits are moderate, and for a period of 10 years, every manufacturer will need to stock generic spare parts as both 12 and 48V. Again I don't think it's a game changer, although 48V is admittedly slightly better.
When I say Tesla won't be as big as top 10 combined, it's in volume not just value. Tesla needs to become as big as top 10 in volume, AND maintain the current margins to justify the current market cap (Totlal value of the stock). Tesla is currently worth $ 789 B while VW is only 65 B, Tesla is valued at 80 times their profits, VW is valued at a way more reasonable 4 times their profits.
To justify the value of Tesla, it must increase profits by 20 times in about 5 years. Doubling profits every year for 5 years will "only" be 32x, so even doubling is not enough, and their own forecast is "only" 0,5x. Which although impressive, is "only" 7.6x over 5 years. Basically Tesla would need to eat all the growth of EV, and become a near monopoly. As I see it, it will be more likely the opposite that will happen. The competition will catch up and surpass Tesla, and gain market share against Tesla in the EV market. While the ICE market will dwindle.
All in all, I think Tesla will grow for a while yet, they may even become #1 although I doubt it. But they won't grow by nearly as much as is required for the current stock value to be reasonable.
It doesn't matter how many other cars VW sells in the future though which is what I'm trying to say about the 40mil comment.
If tesla makes a trillion dollars in profit in 2035, it doesn't matter if VW makes 2 trillion. Both companies will be worth vastly more, and both companies prices would sky rocket well before in anticipation of that happening.
And ya, these high numbers today were due to the high margins and growth. It makes less sense if you look at the next couple of years while we wait for Gen 3, as margins are down for everyone due to interest rates and we're between growth phases waiting on gen 3. But once we see Gen 3 that will paint a better picture on if Tesla can or can't meet future profit expectations.
Everything hinges on Gen 3 right now. Just like the old price everyone balked at when it was 1000:1 hinged on a successful Model 3.
Edit: and I just want to reiterate. Prices came down in the USA because of interest rates, not competition. Your monthly payment today is the same as when margins were super high. The money is just going to the banks now. They probably won't ever be as high again, but they will go back up.
If tesla makes a trillion dollars in profit in 2035, it doesn’t matter if VW makes 2 trillion. Both companies will be worth vastly more
True, but I don't believe there is room for such growth in the market. AI is not a thing that will take us all by storm in a few years, it will mature, and it will start to be used in niche segments, and then later we may see a sudden breakthrough when it gets good enough. But we need level 4 AI for that, and Tesla and most developers are still just at level 2, not that much better than 5 years ago. AFAIK only Mercedes is at level 3. But even from there it's probably at least a 10 year journey to level 4.
verything hinges on Gen 3 right now.
What is Gen 3?
Edit: and I just want to reiterate. Prices came down in the USA because of interest rates, not competition.
OK I remember you mentioned that earlier, you may be right, for sure it must have been to increase sales, and AFAIK it did that very successfully. I'm pretty sure it gave a few headaches for the competition, that will now have to work even harder.
Just a thought. ;)
But you'd be amazed what the fight for survival can do for making a company more competitive. Tesla was basically build on that in the beginning. It was never certain Tesla would survive, but they came through extremely competitive. In part because everybody worked their butts off for the project.
Now Tesla is reasonably secure as a major player in the industry, but others are feeling the heat, and are dialing up their efforts too.
That's very fair to think it won't materialize as Tesla thinks. There really are some long shots going on here and a huge amount of faith on investors.
Gen 3 is just the new vehicle platform to make the next 5-10 million vehicles (if we assume they can even do that). It hinges on the 4680 battery developments, and their ability to get costs down even further. It's what the small vehicle (~4 million/y estimated vehicles as per Elon), the van, probably a non cyber truck and whatever else they got up their sleeve will be built off of. As much as you think the company value hinges on FSD, it hinges on this as well. And maybe they are interconnected. No 20 mil without FSD, and no 20 mil without Gen 3 being a success.
I think we've exhausted everything to discuss here lol. I've really enjoyed this conversation with you and you've given me some additional things to think about. So many conversations about Tesla just devolve into chaos and this was a really nice breath of fresh air. Thank you =)
I’ve really enjoyed this conversation with you and you’ve given me some additional things to think about.
Likewise, interesting to debate this rationally, I can see there is potential, and I think Tesla will do well for the foreseeable future. But I would never buy Tesla stock at the current price.