EV Quick Hits, May Edition
Various and sundry news from the world of EVs, including financial woes, Tesla foes, and EV battery blows.
Is it?
Things are beginning to get difficult for the EV market to the point where the weakening consumer demand, massive losses by legacy automakers, and the lack of a nationwide charging network cannot be conveniently hidden through euphemisms, misleading statements, and lies of omission. Automakers, journalists, and lawmakers alike are guilty of this dishonesty, and people are simply not buying what is being sold to them. Let’s look at a few issues surrounding the EV “transition” in the U.S.
The Existential Crisis of EV Automakers Not Named Tesla
Rivian: The Edsel of trucks
Automakers are experiencing a rude awakening with their EV programs. Increased competition is bringing profits down at a time when EV brands (not named Tesla) continue to hemorrhage money, putting their cash flows into jeopardy and making their financial survival questionable.
Of course, the EV programs of legacy automakers such as Ford and GM will likely persist for a while due to the profitability of their gas- and diesel- powered vehicle divisions, and Tesla’s size and robust cash flow will almost certainly keep them in the game. But pure-play brands such as Rivian, Fisker, and Lucid, cannot continue to operate at a loss for much longer. Witness the breakdown of current EV market share:
Source: CarEdge Data
While Tesla had around 70 percent market share for the last five years or so and is now down to around 50 percent due to increased competition, the company is still poised for survival and will succeed where others such as Rivian will ultimately fail due to poor financial fundamentals and the fact that there is simply no market for a $75,000 battery-powered truck among the buying public. The delivery van program brokered with Amazon is great but will not be enough to keep Rivan from eventual ruin.
With slowing market demand and increasing competition, the EV “movement” is becoming a financial disaster to automakers not named Tesla that will have to either significantly scale back their EV aspirations or abandon them altogether lest they go broke.
…And Tesla’s Not Doing So Hot Right Now, Either
“We’re still Number One…for now”
Tesla is in danger of not realizing the benefits that usually accrue to a first mover from wide-spread market adoption. Think of Coke versus Pepsi; in the cola wars, Coke reigns supreme no matter what Pepsi does because…Coke was first.
But so was Tesla. Why can’t Tesla gain from its first mover position as did Coke?
For now, Tesla dominates the EV market. But that position will be threatened by Chinese EV manufacturer BYD for a simple reason: Battery technology.
At the heart of every EV is the battery. BYD started out producing batteries for cell phones. When the company made the decision to manufacture EVs, it received an investment from Berkshire Hathaway and is now producing an equal volume of EVs to that of Tesla with its entry level EV costing around $10,000. BYD can do this because of its advanced Blade Battery technology which many industry sources consider as best in class.
Tesla has not pursued its own battery technology, a surprising revelation that might be the company’s undoing. Tesla not only buys its batteries from Panasonic and LG, it also buys prismatic lithium-ion phosphate batteries from the world’s largest battery manufacturer (Contemporary Amperex Technology Company) for the Model 3 and Model Y. Because Tesla does not control this crucial part of the production process and has only recently begun to vertically integrate battery production, it might be too late to take on BYD’s mastery of scaling the entire EV manufacturing method and deliver the unicorn of cars - the affordable EV – to the mass market.
Expensive, toxic, explosive, and heavy lithium-ion batteries could spell disaster for Tesla in the long term. BYD entering the U.S. market might just put Tesla at a major disadvantage. Stay tuned.
But What’s Really Hot are Battery Fires
“Ya know, this firehose doesn’t seem to be working…”
“Don’t worry – EV, e-scooter, and e-bike battery fires are rare,” our brave media reports. In my opinion, this is pure B.S. With an ever-increasing number of EVs, e-scooters, and e-bikes in congested cities, lithium-ion battery fire incidents are much more frequent. We’re just not hearing about them.
In the past we heard of reports spontaneous combustion of cheap laptop and cell phone batteries due to having no proper circuit protection in the event of a lithium-ion battery failure. Those small devices are mostly safe today now that such circuit protection is fairly cheap and common in the U.S. But counterfeit (or absent) circuit protection in Chinese-made EVs, e-scooters, and e-bikes are a real problem that our “green” media consistently refuses to report, and I predict this will continue once those affordable BYD Seagull EVs are introduced into the U.S. market in the next few years.
As we all know, EVs have battery packs that contain thousands of individual lithium cells that are densely connected together. A single lithium cell can be breached by puncture, impact, poor manufacturing quality, or faulty charging. If breached, chemical reactions can be suddenly unleashed which leads to a physiochemical condition known as thermal runaway, a catastrophic failure mode that feeds off itself like an exploding ammunition dump or a fireworks factory on fire.
And it’s a righteous bitch to extinguish. The growing heat ignites and reignites like a flamethrower, producing toxic fumes that mix with oxygen to burn even hotter. And turning water hoses on an EV battery fire only makes it worse. H2O chemically reacts with lithium to form flammable hydrogen gas – kind of a mini-Hindenburg scenario – that can actually make an EV battery fire burn hotter and longer.
Knowing this, tow yards around the country want nothing to do with EVs that have been damaged in a collision. That’s because EVs need to be segregated from other vehicles behind concrete containment barriers to protect the yard and the adjacent cars from being incinerated should an EV spontaneously combust. And tow truck operators are hesitant to pick up EVs involved in collisions because they might ignite during the tow, plus they’re more expensive to store due to higher liability insurance and handling expenses.
All of this makes life more complicated and expensive for the hard-working people having to deal with the absurdities of this ill-fated “transition” to EVs.
(Battery fire content should have been credited to Tuco’s Child)