Showing posts with label kandi. Show all posts
Showing posts with label kandi. Show all posts

Wednesday, December 16, 2020

The US Automotive Market From a Global Perspective

Before Tesla, there were only 3 major American automakers: General Motors, Ford and Chrysler. Apart from some very small companies, every other automobile manufacturer in the US had either gone out of business or been bought up by one of the Big Three. And even Chrysler had been owned for a while by Daimler-Benz, turning the American Big Three into a Big Two. Chrysler is an independent, American-based entity again, and the Big Two became the Big Three again. 

The inability of any other corporation to challenge the Big Three led many to predict that Tesla wouldn't last, and some, although fewer, are still predicting that Tesla will either go broke or be bought out by one of the Big Three. Also, many people give other new American automakers such as Rivian, Bollinger and Lucid little chance of surviving. Some disagree, saying that EV's have changed the game, as demonstrated by Tesla. To that, some reply that the game is still making automobiles and that it hasn't changed all that much, despire Tesla having made a huge splash.

If we change our focus from the US to the global automotive industry, suddenly things are much more complex: there are currently more than 50 different countries who each have their own indigenous automobile brands. I'm not talking about all of the countries where automobiles are manufactured, because a company based in one country will very often have manufacturing plants based in other countries. If we count every country where there is an automobile factory, the count goes well up into three figures. No, what I mean is that more than 50 different countries have their own independent companies making their own separate brands of automobiles.

That number might seem very high to some Americans, because most of those countries have never tried to import cars to the US. From the 1980's to the present, the only countries who have imported cars to the US in large numbers have been Japan, Germany, France, Italy, South Korea, the UK, Sweden, Czechoslovakia/the Czech Republic and the former Yugoslavia. In the 1980's both Yugo from the former Yugoslavia and Hyundai from South Korea began importing automobiles into the US. At first, both brands, while undercutting every other automaker in the the US in price, were also very inferior in the quality of their products. Yugo disappeared again from the US market, while Hyundai improved its product quality to an amazing degree in a remarkably short time and are now thriving in the US along with their South Korean subsidiary KIA.

China's enormous automotive sector will very soon be trying to make a go of it in the US, with three brands importing cars: XPeng, Nio and Kandi. The US imports from these companies will be electric only. And other Chinese brands will be following, most likely importing EV's only. 

It seems that the whole wide world is in love with crossovers and SUV's. I'm not. But apparently the whole world is. In India, wealthier customers have been buying the same cars as wealthy people elsewhere: Rolls Royces, Mercedes, BMW's, Jaguars and so forth. They've been buying the same electric SUV's, The Jaguar I-Pace and the Audi e-tron. But there's a brand-new all-Indian electric SUV, the Tata Nexon EV, 


 

and the Indian automotive press is going more than a little bit nuts over it. Reviewers say it's just as good as the I-Pace and the e-tron, some say it's better. There's obviously a lot of Indian patriotic pride here over a domestic product which can stand comparison with the finest luxury SUV's in the world, but there's obviously also a very special new vehicle here. 

And although I haven't heard anyone else say anything about it, I have wondered whether Tata might bring the Nexon EV to the US, as the first Indian attempt to enter the US automotive market.

Monday, November 30, 2020

EV Headlines

Tesla stock is selling for over $500 a share, and the market cap of the company is over half a trillion dollars, which is more than the combined value of the rest of the North American automotive market sector. That is: more than the combined market cap of GM, Ford and Chrysler, plus all of their North American parts suppliers, plus all North American auto-parts stores and auto-repair businesses.

Many Tesla fans seem convinced, not only that Tesla makes better cars than anyone else on the planet, but also that no other manufacturer will ever catch up with them, and that Tesla will eventually, literally speaking, take over the entire world. If you believe that, then maybe Tesla's current valuation could be justified in your eyes. To everybody else, this looks like a bubble, and the only questions are when it will pop, how bad it will be, and how many of you fans will still think that Elon Musk is Jesus after you're living in your Teslas because you had to sell your houses after Tesla stock was wiped out, and then living on the sidewalk because you had to sell your Teslas. I know, I know: many of you will still think he's Jesus. Even if he sells all his Tesla stock before it crashes and is 4 times richer than Jeff Bezos. I know absolutely incurable madness when I see it.

An automotive stock whose market capitalization is currently slightly higher than GM's is NIO. This may surprise you if you've never heard of NIO, and if you're not heavy into EV's, you probably haven't. They are a Chinese company with some impressive models coming soon to the US market. So, how many vehicles have they sold worldwide since their start up in 2014? Just over 50,000. How many vehicles has GM sold in the same time? Over 20 million. Just in the US and Canada. So is NIO another bubble? Aehhmm...

Maybe GM is drastically undervalued. Maybe none of this, literally speaking, makes any sense at all. 

NIO and another Chinese Company, XPeng, will be bringing high-performance cars to the US market soon. Automotive journalists have test driven NIO's and XPeng's products and described them as serious competition for Tesla. 

But the car currently regarded as the most serious competition for Tesla is the Lucid Air, coming soon from the American start-up Lucid Motors. I don't have range anxiety, but I know that many of you do, so for your sake I'll just mention that the Lucid Air goes over 500 miles on a single charge.

And that 500-mile range excites a lot of people. Bores the Hell out of me. But the following excites me. In another market sector, the affordable electric car, yet another Chinese company, Kandi, is making big news in the US: their model K27 

may actually beat NIO and XPeng and Lucid into US showrooms. To be frank, some of the cheapest electric cars for sale so far have been golf carts which somehow have received street-legal status. Kandi's entry-level K27 is no golf cart. Some reviewers have described it as roomier, peppier and just all-around better than a Smart Electric. And Kandi has K27's in Texas right now and is working on getting them homologated and setting up a dealer network. Looks like like they might miss their stated intention to have cars for sale in the US by the end of this year. But even if so, they won't miss it by much.

And the K27 is rather affordable. I'm not clear exactly what the sticker price will be. It was going to be $20,000, but if a recent report it's accurate, Kandi have changed their minds, and lowered it to $17,500. If that's accurate, it might be a smart move on Kandi's part, because $17,500 minus the federal $7500 EV rebate equals exactly $10,000, and then any state or local rebates which bring the K27 down into four figures, so much for for-real new EV's not being affordable. For example, it would cost $6000 in Colorado, and as low as $3000 in California. For a legit -- although very small -- brand new EV which has all the features you'd expect on a new car. I'm picturing a lot of suburban Daddy's girls in families which never considered EV's before this, getting brand-new Kandis for their 16th birthdays. Could be big. Could be big business. Watch this space.

Oh, btw, just for extra oomph: if the K27 does go on sale for $17,500, that would be exactly half of the $35,000 sticker price which Tesla promised for the Model 3, but never delivered on. I know, a lot of Tesla zombies will insist that Tesla did so offer a $35,000 Model 3, but just keep in mind, they also believe that they, as Tesla stockholders, will soon rule the world. And that Elon Musk makes about $20,000 a year working for Tesla. They believe a lot of very silly things.