As Tony Seba has said the 100 million plus vehicles sold annually will drop precipitously due to electronic autonomy down to about 5.5-10 million vehicles annually before 2030 but possibly by 2025. or a 10-18x reduction in vehicles sales. Its clear also that these vehicles will last about 10x longer than a vehicle from Ford or GM and do so much, much more reliably- about 1 million maintenance free miles vs Ford and GMs mediocre reliability over a useful life of about 100k miles. So you might as well multiply the 10x in a useful life by the 10-18x reduction in vehicles to scale down Ford and GMs vehicles sales in the coming years. This is nothing new for GM as we know it recently went bankrupt, tried to blame its union and was rewarded by having Obama fire its head as a precondition of being bailed out and then got essentially kicked out of the EU and never managed to pay back its government loan. Well recently right after giving its shareholders a 25 billion dollar gift on its workers backs it tried to screw is workers again and now it is down to producing about 8.4 million vehicles a year- quite a drop. Now let us adjust that for the future GM faces by multiplying 2018 sales by a 100-180x reduction in sales within about 5 years. This by the way has already begun, in a year where Tesla is way up GM is way down, present GM sales as a precursor to this trend have GM having the worst year in about 20s- worse than the 9% loss year that bankrupted GM requiring a government bailout which it failed to fully pay back but still managed to have 25 billion as a gift for shareholders. So its sales would go from 8.4 million to somewhere between 46-84k per year and its revenues would drop proportionately from 147 billion in 2018 to 816M-1.47B and is employees would drop from 178K to 988-1.78K but of course it will go under way, way before that (a mere 9% shortfall took it out last time)will it be bailed out, it will like it did before probably be trying to sell its plants to Tesla and then blaming Tesla for not wanting to take them. Ford isn't in a better position and that is shown in its market cap because the market gets it, the only that helped either of them was talk of electric pick ups- we saw a camouflaged Ford pick up coming out of a Tesla factory with a bunch of other Tesla's, maybe it wants Tesla to underwrite it the way GM keeps apparently trying to do with Waymo on autonomy but hand waving about its Cruz automation? Lets walk through this some other ways. The bulk of Tesla's new sales are now below the average vehicle cost in the US of 50k per vehicle (which has doubled recently because of Ford and GM and hiding behind he pickup tarrifs and bulky SUVs- to drive up gas consumption- with an insane emission waiver.) When Tesla announces a new model Ford and GM suffer because it means people recycle their old vehicles holding out for a Tesla or equivalent electric and forging a new Ford or GM because neither is viable in electrics. When Tesla sells a vehicle the coming Teslas are rated for 1 million miles (both battery and motor or full power train,) and that means that future purchase possibilities will be withheld from Ford and GM in their core tariff protected US market for up to 5 generations- they can't even hold their breath for 5 years. Also, Teslas are all coming self-driving ready and are already electric. This is where Musk has said that it won't be economical or profitable to continue to sell vehicles to the public and where Ford and GM with revenue and factory capacity and jobs to maintain ends up having to scale down operations by 100-180x. To understand this lets look at why this would be so and why it would be allowed and why it can't be stopped and why is for the greater good. The average family in the US is spending 10K a year on vehicles (purchase, maintenance, fuel, insurance, repairs, taxes, DMV, parking,) its is way way too much. This new electronic autonomy model drops that to 1K a year on vehicles making it irresistibly compelling on price alone- a 10x reduction. But it is also massively more convenient and people are already familiar with Uber and Lyft, its just these new $83 a month subscriptions have more cars out on the road and no drivers in them and frees up the garage and means no more having to park or fuel or do repairs and maintenance- all time saved. Tesla already has its fleet of these building out of its leases which it retains at the end of the lease. For the family its a massive increase in convenience and a chunk of income retained for the family which can be spent on other things like desperately needed security and paying off ridiculously inflated mortgages- it is a life line and a massive stress reducer and health improver. For cities (historically the primary political constituents) it is also a life line as it deals with deadly urban sprawl (which kills their tax base) and traffic and cuts street outlays and outlays for freeway widening and it protects the tax base. It also means people with more time (commutes are safer and much more relaxing.) It can't be stopped because it is already here and lobbying and dirty laws to slow it won't work- fossil fuel companies will be made to pay for the slack as they go down the drain they have limitless externality liability where proper precedent will ripple and improper will be ignored. Electric autonomy will go in jurisdictions around the world and the huge safety benefits and pollution benefits and lives saved from accidents and the economic losses from the medical for accidents saved and the benefits for the disabled and the elderly and restaurants where guests aren't so constricted is simply too much to stop. It is also already here. Google did 100 demonstrations in CA 10 years ago before moving to the more ideal Chandler AZ with is perfectly ruled new streets for is testing development regime. Its done 10 years of testing of its self-driving platform there with human supervisors in the vehicles. It is now rolling out an un-supervised phase before roll out to the general public. Tesla has the highway about nailed and now its entered the acid test of private parking lots at about 3-4mph but notice with smart summon there is no human in the vehicle or at the wheel. This announcement by Tesla may have spurred Google on. Notice also that Amazon just got unrestricted testing for its package aerial drones and Toyota just announced it will be getting into the aerial drone space. These are essentially pre-trials for the transport of people in aerial electric drones- people are precious cargo with different constraints but note with aerial drones that any flight over populated areas has to be fit for people because accidents would drop freight on people- so the FAA just provided unrestricted trials to Amazon- surely Amazon wants to go from 1-day shipping to 15min to 2hrs shipping- why because as an example of this going from 2 day to 1 day already doubled sales. Quantum computers too are about to optimize the Hamiltonian problems for perfect routing order and perfect pallet stacking order massively improving logistic efficiency. This brings us to China. China is still a communist country. It surely won't be big on allowing parasitic post capital defunct capitalists to hide behind unneeded jobs to use human hostages to extract profits for non-contribution. So here will Luddite movement to stop wind resistance from being the limit of production. Continued next post.
continued Electric cars are almost solid state vehicles. They have something like 18 moving parts vs 3200 for ICE vehicles. As an example Toshiba has a hard drive factory that builds solid state hard drives from scratch with no humans involved in the process. The Chinese Tesla factory went up from scratch to functionality in 9 months and at a 62% price reduction. Tesla's vehicle gross margin is already at about 22.5% and in China it may be more like 37% if he cost of the factory is an indication. Compare how many Bolts have sold to how many Model 3s and compare the margins on the two- same kind of picture from that angle too. Notice that Tesla doesn't have the ICE obsolete sunk costs and can simply move people to move forward if at all necessary and doesn't have to un-employ people like GM and Ford to downsize. Amazon is going to put UPS out of business for similar reasons. This is why GM, Ford and UPS workers really need to stage hostile take overs of their firms. They added all the value to these firms, these firms really belong to them not the rent seeker like a credit card you can't ever pay off so-called owners. They need to be able to do something like strike to drive their firms stock values into the ground and then acquire the firms outright and then automate away the boards, execs, managers and supervisors and automate to the limit. Then they should covert the firms to a membership basis and do everything pay-as-you go. Past employee owners would retire on the cash out of their shares but the shares wouldn't be replaced, it would just be a membership-vestment-retirement basis after that. BMW is about to possibly have its worst year in 50 years, its Reinish capital model workers should acquire it and do what is right. Tesla doesn't have the obsolete sunk cost liabilities, it doesn't have the staffing and training issues, it doesn't have the externality liabilities of these ICE maker former competitors. It can do aerial drones and electric motors or focus on its storage and power generation or its planned HVAC or citizen cord cutter efforts. It can get into marine and aviation, it can easily adapt its factories and expertise and opportunities to where it needs to go to hit demand sweet spots. Its competitors are like the firms that didn't see the PC and didn't see the cell phone and didn't see he smart phone coming - well really all that combined doesn't do this change justice it is all that rolled into one and more- it is the greatest, fastest, hardest change since the industrial revolution- Tesla understood it from the start and was built from the ground up to pursue and thrive in it. Lets also say that Tony Seba is proving right again and the Bloomberg people are simply wrong (no surprise there,) but adjusting to fit Seba's model now. Seba has been right on this for more than a decade now and looking back every time he was off it was because he was too conservative!!!
