California is the crystal ball for cars & trucks

Economically California is the 5th largest economy in the world. In order of the size of the economy it goes 1. China, 2. EU. 3 US. 4. Japan 5. California. 6. Germany

Granted, California is not completely representative. For instance its taste for station wagons which are very popular in the EU is long gone. But it also doesn't have quite have the taste for light trucks the larger US market has making California more like the rest of the world. It has however often been referred to as the most competitive market in the world. And it is the home of one famous EV make and the home of much regulatory policy that has rippled throughout the world. And it is the home of Hollywood which has been important culturally in a global way and the home of Silicon Valley which has been important for business and culture. California man not remain as influential but it has been influential in a defining way during the internal combustion era and that era as results in California show is quickly coming to an end.

It also seems California was the market for BMW which I will argue has defined the internal combustion era. I know that BMW was not the largest maker. It didn't make the Model T and it didn't make the Camry or the VW Bug. I am also aware during this end stage of internal combustion that BMW has not produced the highest quality vehicles. BMW has in the past produced top quality and top reliability vehicles but in later decades those honors belonged to Toyota and Honda. However BMW as the "Ultimate Driving Machine" did produce the vehicles that people were most willing to pay a premium for and seemed to have the highest status for most people even outliving the yuppie claim. At the very top end Mercedes seemed to have an edge at times, but in general BMW seemed to be the brand more people were willing to pay a premium for. And in particular its 3 Series seemed to capture its mass market premium appeal especially in the land of California. California could be said to be the land of BMW.

But now when you look you don't see new BMW's in California. It is to the point that that it is hard to tell new BMWs from old BMWs. You don't see new BMW cars but you also don't see new BMW SUVs and its the new BMW SUVs which BMW claims is keeping its total brand sales from falling in the wake of 29% decline in sale of its cars globally- note BMW doesn't make light trucks. You don't see either new BMW cars or new BMW trucks in California. What you see is a complete almost instant route by EVs of BMW vehicles. And you also don't see BMW with a real competitor product on the horizon and BMW's EV offerings have taken a huge hit to sales as well.

This is the trend for the entire world. The new key trend setting market will not be California. It will be China and it is already the largest auto-market in the world by pretty much all measures, just as by honest measures China is the largest economy in the world right now. So just as BMW has disappeared from California the new auto brands are going to be companies like BYD and Nio.

This brings me to the most important points in this post. First notice how quick this happened to defining brand of the ICE era in its defining market. Also realize that this happened to this brand because of BEVs. Also realize now it is cheaper, much cheaper to make BEVs than to make internal combustion engine vehicles because with BEVs its not selling into the head wind of a peaked and declining market for ICE and there is no facing of unrecoverable prospective sunk costs. And also it is just cheaper to make a BEVs period. And the superior value proposition of BEVs is recognized by consumers, one firm does it without an advertising budget competing against defining BMW in California. Also don't be distracted by anomalies like the F150, globally its not even a niche, and in CA its outsold by an BEV car.

The transition this most resembles is the transition from landlines to cell phones. Just as with not having a cord making it so you can only take calls in a single room and BEVs make it so you don' t go to gas stations anymore and make it so you can even use your own electrons and energy. Plus they are just plain higher value better products in every way and don't come with the guilt factor. If you're in a culture where your generation did things that killed social mobility as with current parents in the US you don't want the added guilt of having poisoned future generations and having put them at risk of un-survivable war that guilt factor is huge. So imagine a switch where owning corded telephones as opposed to cell phones was not only stupid but also unethical now imagine that the switch actually lowered your bill. How fast would that happen? Look at California.

 

I think BMW has been seriously misreporting on its actual sales for a few years now. I think this started when a competitor began to very seriously eat into its global 7 Series sales. That competitor released a vehicle that's been eating into its global X Series sales as well. In CA I can think of only a single person that's owned a BMW X Series vehicle and they got rid of its some years ago and didn't own it for long at that. I simply don't see their X series on the road much at in CA and its going to be the same for the rest of the US- its not like its going to be down in CA on the X series but up in the rest of the US. What we're talking about is a huge hit to demand for the standard bearer for internal combustion- we talking about peak ICE and I am saying its real and its been happening in the most concrete of ways in a total litmus test market. There is of course a lot riding on trying to keep the truth of this narrative from getting out.

I think BMW has been doing a lot of this redirection type of stuff lately in the media. For instance it was/is facing injunctions around the world for spontaneous combustion even of its parked vehicles- Korea is one place where this is happening. To be fair this has happened to Ford as well. Seems possible as with the Tata defective airbag inflator canisters affecting many makes, Ford and BMW may share a common supplier responsible for the fires. I don't know. But all the media focused on a competitor that really doesn't have this type of problem and my guess is this is BMW again trying to redirect. Same with quality, BMW has been down in recent years with its interior quality. A friend whose had one from 4 or 5 years said she'd never by one again because of the seats are coming apart and the arm rests are coming apart- about a month ago I overheard her telling a coworker never to buy one. Another friend who is an absolute life long BMW fanatic, literally a generational BMW fanatic told me he was dismayed to learn in a forum of the paint rubbing off on the plastic start/ignition button in his top end BMW 7 series. I can no longer easily differentiate new from old BMW's models but he's the only person I know with an apparent newer BMW, replacing another 7 Series- he also said that his former 7 Series had much better seats- he kept the old one didn't trade it, but he's a conservative guy and loyalty is a big thing with him- but this is wearing on him. I was getting gas at Costco the other day and and there was a BMW 3 series- could have been a 5 series guessing it was made after 2012, it was stopped and all this white smoke started bellowing out from under the hood and I thought lets get away is its going to explode. Well it turned out it was just pissing all its radiator fluid out, but the attendant came and stood their with an extinguisher- given the way Costco does its lines and this was late Friday there was probably an audience of 100 people that witnessed this- the guy and his gal were humiliated standing at the front of the car with the hood up while it blocked access to one side of the pump islands and car piss all over the place and look of shock on his face.

Then there is the issue that none of the German makes seem to be getting the software right, I saw a review in The Hill of the Audi E-tron and they said the software was so bad it was a deal breaker. Can't imagine iDrive will be doing BMW any favors. I see a lot more of a particular competitor's BEV SUV (a very expensive vehicle) than I ever see BMW X series in CA. And I don't think its just that I am looking for that competitor's vehicles. There have been some BMW dealers or execs in the BMW dealer chains in CA that have come forth in an honest way about the problem but at this point I've come to realize even they have greatly understated the situation. I think BMW must have thought the same old standards of collusion would save them, but that is not what this is about. BMW misread the tea leaves, this is about a new way of life with new benefactors and beneficiaries and this is a consumer strike as much as it is consumer choice. What was cool can become cliche' and I think BMW has been the victim of things like diesel gate even more than VW. I think what is happening is just as smoking is no longer cool- its seen as stupid and reckless, that is what is has happened to BMW's ICE brand. When you buy one you're seen as selfish, irresponsible and stupid- these are the unconscious undercurrents, it signifies failure and lack of vision not success and being clued in. There is only one thing that can save BMW and that is becoming the outright leader in green but that can't be done with hybrid trickery or scams like FCV as these are like going from Camel unfiltered to Camel filtered when smoking is not cool anymore.

I was talking to a young person who has a friend in South Carolina. That friend is a Southern Motor head and they had for an extended period argumentation, months and months about the relative merits of muscle cars verses EVs. Nothing would get through to the Carolinian until finally that young person said to the friend, look the EV is simply superior in every way. That got through and the changed the tune of the guy from SC. He was able to see it. But it seems the foremost promoter of EVs always understood this. BMW still doesn't understand this. You can't just slogan out of it (BP Beyond Petroleum) the new generations everywhere know that fossil fuels are about slavery (dictatorship and loss of democracy,) hostage taking (pensions, austerity, mortgages, insurance products including health care, and even taking hostage their own employees in trying to turn petroleum employees against their unions and their own economic interests) and terrorism (I think even the Pontif pointed this out,) and lying (sequestration and secret energy policy to cover endless ever increasing fossil fuel losses) but consciously or unconsciously new generation knows this and of course rejects it- lead in the gas, tobacco, CFCs, coal, slavery, fossil fuel enhanced debt peonage- its over. Suspect the great short burn is coming followed by more rational shorting of fossil fuel interests that should be shorted.