{"id":131048,"date":"2023-01-26T19:27:05","date_gmt":"2023-01-26T19:27:05","guid":{"rendered":"https:\/\/fin2me.com\/?p=131048"},"modified":"2023-01-26T19:27:05","modified_gmt":"2023-01-26T19:27:05","slug":"for-automakers-the-ev-surge-is-everything-everywhere-all-at-once","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/for-automakers-the-ev-surge-is-everything-everywhere-all-at-once\/","title":{"rendered":"For automakers, the EV surge is everything everywhere all at once"},"content":{"rendered":"
DETROIT (Reuters) – The surprise leadership shuffle on Thursday at Toyota Motor Corp, renewed urgency at Renault and Nissan Motor Co to restructure their alliance and Elon Musk\u2019s declaration that Tesla Inc will be the world\u2019s No. 1 automaker by a wide margin have one thing in common: What once defined the global auto industry\u2019s center is no longer holding.<\/p> The announcement that Akio Toyoda will step down as chief executive of the world\u2019s top-selling automaker on April 1 came just hours after Musk used a quarterly earnings call to declare that Tesla was now the auto industry\u2019s leader in profitability and manufacturing efficiency – the crown Toyota held for three decades.<\/p>\n Toyota\u2019s incoming CEO, Koji Sato, faces a daunting task. He must accelerate the Japanese automaker\u2019s efforts to develop more competitive electric vehicles. But he will get little breathing room from Tesla or the Chinese EV manufacturers who are using their leads in EV technology and production costs to slash prices.<\/p>\n Tesla already earns roughly seven times as much per vehicle as Toyota. Its 17% pretax margins are roughly double the average for the rest of the industry. And after a rough 2022 for the company\u2019s shares, the stock has gained 28% to open up 2023.<\/p>\n Musk hinted again on Wednesday that Tesla is working on a new vehicle that could sell profitably for under $30,000 – which would compete head-on with mass market models from Toyota, Volkswagen AG, Ford Motor Co and General Motors Co.<\/p>\n Musk has in the past teased products that took far longer to deliver than he initially promised, such as the long-delayed Cybertruck.<\/p>\n But the Tesla chief\u2019s ambitions are clear: To reorder the auto industry hierarchy that for decades had Toyota at the top.<\/p>\n \u201cI don\u2019t think you could see a second place with a telescope, at least we can\u2019t,\u201d Musk said when asked how the auto industry could look in five years.<\/p>\n Global automakers are experienced with periods of feast and famine that come on roughly seven-to-ten year cycles. What is happening now is different.<\/p>\n The shocks of the pandemic, two years of supply-chain chaos and possibly a recession this year are colliding with a once-in-a-century shift of the industry\u2019s fundamental technology.<\/p>\n As combustion vehicles give way to electric vehicles with high-powered computer chips for brains, many of the advantages of incumbency that Toyota enjoyed are withering away.<\/p>\n The shift to electric, computerized and software-driven vehicles has opened the door for Tesla and other startups, particularly in China, to re-set the ground rules for competition. Tesla\u2019s price war could be just the start.<\/p>\n \u201cWe question whether competitors can keep up in this EV race,\u201d Morgan Stanley auto analyst Adam Jonas wrote in a note this week.<\/p>\n Incumbent automakers can no longer count on refinement of mature vehicle technology to stay competitive. Established automakers are investing heavily in EVs – some faster and with more success than others.<\/p>\n South Korea\u2019s Hyundai Motor Co on Thursday reported better-than-expected results powered in part by strong sales of its new EV lineup. Hyundai forecast its EV sales would grow by 54% this year – a faster growth pace than Tesla has forecast.<\/p>\n Chinese manufacturers pouring EVs into Europe have as much as a 10,000 euro cost advantage ($10,600), Patrick Koller, chief executive of auto supplier Forvia, said earlier this month.<\/p>\n The intensifying competition puts pressure on Renault and Nissan to resolve negotiations to restructure their alliance. The companies are now aiming to announce a deal – including an investment by Nissan in Renault\u2019s EV unit – by Feb. 6, sources told Reuters.<\/p>\n Renault and Nissan once argued that their alliance gave them significant advantages in economies of scale. That potential still exists. But first they will have to fight to stay at their current size as Tesla and Chinese manufacturers try to strip away their sales.<\/p>\n \u201cEven though the market is shrinking, we\u2019re growing and EVs have doubled almost year-over-year,\u201d Tesla Vice President Lars Moravy told analysts on Wednesday. \u201cWe always look at it as how much of the total vehicle space do we have, and we\u2019re just going to keep growing in that space. There\u2019s 95% for us to go get.\u201d<\/p>\nTHE SHIFTING GROUND<\/h2>\n