EV’s are about to be MUCH cheaper; sell your car now or lose thousands

Viking ThumbnailsEV's are about to be MUCH cheaper; sell your car now or lose thousands

By the end of this year, the price of electric cars will have dropped by at least 10%. If you’re thinking of buying now yeah, I think maybe it would make sense to question whether or not you should do that. There are three very, very compelling reasons why electric cars will be much cheaper in twelve months. In fact, no, there are 4. I’m going to outline those reasons and they’re very compelling reasons.
The first of those reasons is this, ‘scale’. Scale matters. Let’s say only 50 electric cars were going to be made this year, measure how much they would cost to manufacture. The cost would be astronomical. While the number of EVs that we manufacture this year will be nearly double what was manufactured last year.
Already this year, electric car sales in China, the world’s biggest car market, have increased by 40% in February of this year. The same thing will happen globally. The same thing will happen more toward the second half of the year. The second half, not the first half, the second half. The reason is, there is going to be a glut of electric cars.
There are more than 100 electric car companies in China. They’re all trying to kill each other, essentially to be the last man standing. They’re all reducing prices. Toyota has just revealed its brand-new BZ3 amazing, ultra-sleek, impressive electric car. And what do they have to do? They had to discount the price, the very minute they started selling the car. They had to discount the price by about, well,12% plus offer incentives like lifetime free servicing. This is what you have to do to compete in China. China is one-third of all cars.
Just think about it this way. One in every three cars sold in the world is sold in China. And if China has already hit 33% EV, then you can see where things are going. Scale matters. One of the Chinese automakers that make only EVs said, they need to make a minimum of 500,000 electric cars to break even. Now we’ve got hundreds of billions of dollars being invested into manufacturing EVs. Of course, scale, and mass production will bring the cost down. So it have many different innovations that I’ve talked about on this channel. That’s point 1.
Point 2, is this, Tesla’s price war. Tesla has begun a price war in China that has forced almost every manufacturer to reduce their prices. Tesla’s prices have come down to the point where now realistically, tesla’s competition are gas cars, and they’re priced in the same range they are in Europe. In China, they’re priced in the same range. BYD, dealerships are bringing the prices down. Toyota, EVs, new EVs, they’re bringing the prices down. What about Xpeng? Prices down. WM motor? prices down. Nio, prices down. Everyone is doing it.
Everyone’s doing it, amazing for consumers. Then we’ve got the same thing happening in Europe. In Europe, Tesla said, you know what, we don’t care anymore about making massive profit margins. We want to take more market share. We want more cars in more homes. We want to build as many EVs as possible. And the way we can do that, sell as many EVs as possible, is to reduce the prices. Now you can buy a Tesla Model Y for around €42,000. In most European countries. That’s a very similar price to a similar-spec gasoline-powered car. And it’s cheaper than any other electric car that size from any other manufacturer in Europe right now. So what do other manufacturers have to do to compete?
They have no choice. They may not respond for a few months, but eventually, media pressure and shareholder pressure will force them to respond. Prices of EVs will come down in Europe in the same way they have in China for that same reason.
Point number 3: Chinese electric cars, well, what do they have to do to avoid bankruptcy? Start selling cars outside of China. Look at the price of cars in China, the price of the easiest. In China, they’re making nothing. They’re losing money. But if they sell those cars outside of China, well they can sell them for 40% more money and then they can make a profit. They can. Look at the price of a Volkswagen ID 3. It’s ridiculous in comparison to a similar spec, similar-sized car in China. It is. What about the Fiat 500 e? $52,500. It’s a joke.
You can get a similar-priced, similarly spec car with basically the same battery technology, the same ECU, and all that stuff. You can get one for about $12,000 in China. The Chinese are beginning to sell their EVs in Australia, New Zealand, Singapore, in Thailand. I’ve seen them everywhere here in Thailand, there’s a BYD Atto 3 parked, out in front of my driveway. There’s an Ora good cat, right just down the street, and 50 meters down the road, there’s a Tesla model 3. Tesla just began selling EVs here a couple of days ago. I’ve already seen a Model 3 here. They’re coming everywhere.
The Chinese are coming. And legacy auto will have no choice but to respond. Right now, they’re pricing their EVs too high. The reason is they don’t make any profit. They’re used to making a profit from cars. They don’t like not making a profit. So their EVs are expensive. They have no choice but to bring prices down to compete with the Chinese onslaught that we all know is on our doorstep. It’s here now.
Point 4: The battery glut. There is a glut, not only a glut of EVs in China right now, there is a glut of EVs. There are plenty of EVs sitting in factories and fields doing nothing because there are many of them in China. But there’s a glut of batteries. Capacity at the world’s biggest battery factories has declined over the last few months. These factories, these companies in China, they’ve just gone full scale, full-blown mental. I mean, turbocharged the hell out of something, stick a supercharger on it, then stick some nitrous in it. That’s what some of these Chinese companies have done.
Battery companies, CALB, can’t get market share at all. BYD, are just saying, you know what, we’ll beat you on price. But right now, the problem is CATL, the world’s biggest battery company, they have about 40% spare capacity. That is not the way you run a business. You need your production lines running at full steam at 100% or at least 90%. CATL knows that. So a price war has begun on batteries. But this price war has begun at a time in which the key minerals needed for those batteries have all come down drastically. The price of lithium carbonate is down 40%. The price of nickel was down, the price of phosphate, down. The price of iron ,down.
Everything that goes into these batteries, everything, has come down significantly in cost over the last few months. That means these battery companies who made billions of dollars in profit last year, can afford to bring down the price of their batteries. Meaning automakers who buy these batteries will be able to buy the batteries at a much lower price.
Now, remember, these facilities need to be run at a higher capacity. The capacity they’re running at CATL, for example, they’re losing market share. Now, they would be angry, they would be furious. If they want to get that market share back, what are they going to do? They’re going to call up Ford, which they’ve already done. Ford is going to say, yeah, thank you very much. We’ll use lithium phosphate batteries in our new Mustang Mach E. We’ll use them in the Lightning. Wow, what a discount, 50% versus the price of a ternary battery. Bang. Done.
That’s what they’ve done. Prices of EVs will come down because the battery packs and the components are coming down in wholesale price, Does this mean you shouldn’t buy an EV today? Does this mean you should wait? Well, I can’t tell you, please don’t email me, asking me that question. I’ve had lots of people asking me that question.
If you need an EV, if you need a car today, don’t go buy a gasoline-powered car. They’re rubbish. Your resale will suck. I’ve had a lot of trouble selling my gasoline-powered car. It’s been a nightmare. My brother’s trying to do it for me right now in Australia, and they aren’t moving. Don’t buy a gasoline-powered car. If you can go buy an electric bike, buy an electric skateboard, buy an electric scooter until the point when you need to buy a car. Towards the end of the year, you’ll get one cheaper.
New models are coming. Remember that MG4 is about to come into the market right now. Ora, will bring out their electric car. I mean, we’ve got a plethora of new models coming this year, not only from these Chinese automakers but from legacy automakers. The truth is this is a very positive development. EVs, within probably 18 months, will be at Parity. Not just in China. They’ve been at Parity in China now for a long time. They’ll be at Parity with gasoline-powered cars within 18 months at the absolute latest.
The EV revolution is here. There’s no stopping it. And it’s going to happen even quicker than you think. Now, the mainstream media wouldn’t want you to believe this. They want you to believe that this is not going to happen. It’s going to be slow. No, it’s 2040, maybe 2050. But, my friends, they’re wrong.

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The Electric Viking

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