Australian (ASX) Stock Market Forum

Electric cars?

Would you buy an electric car?

  • Already own one

    Votes: 10 5.1%

  • Yes - would definitely buy

    Votes: 43 21.8%

  • Yes - preferred over petrol car if price/power/convenience similar

    Votes: 78 39.6%

  • Maybe - preference for neither, only concerned with costs etc

    Votes: 37 18.8%

  • No - prefer petrol car even if electric car has same price, power and convenience

    Votes: 25 12.7%

  • No - would never buy one

    Votes: 14 7.1%
  • Total voters
    197
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SirRumpole said:
What gives you that idea ?

We once had 3 manufacturers servicing a market much smaller than today.
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Those 3 manufacturers Australian operations were all unprofitable, and were supported by incentives and tariffs.

The Tesla factory will want to aim to produce 1 Million cars per year so that economies of scale exist and costs are lower per car.

But, Australia only buys about 1 Million vehicles per year in total, (that’s not just cars, that’s trucks and motorbikes too), and Tesla isn’t going to capture 100% of the market, they might be lucky to get 10% of the market.

So out of their 1 Million cars produced, 900K will need to be sold elsewhere.

So instead of producing 1M in Asia, and sending 10% here, it would be reversed, eg produce 1M here and send 90% to Asia, That’s going to produce a situation that’s not economically ideal, and would require either

1. Asians to be willing to pay more for an Australian made car

2. Tesla to accept smaller margins or losses

3. the government to subsidise each car we send to Asia.

4. The government to subsidise each car sold here due to a smaller inefficient factory being built to begin with.
 
Value Collector said:
The Tesla factory will want to aim to produce 1 Million cars per year so that economies of scale exist and costs are lower per car.
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How did you arrive at that figure of 1 million per year ?

Under the plan I outlined, the manufacturer

a. would save on initial capital outlay by not having to pay for the establishment of factories and production lines

b. would be the leading seller of EV's in a reasonably wealthy country currently starved of sufficient supply.

I reckon those factors would counterbalance the relatively small market size.
 
The Kia EV6, which seems to fit most of what my wife wants/needs in a car, is now sold out for three years of production.
They are just not taking orders.
The Ioniq 5 which was her next choice, is also not taking orders.
This may be ok in the future, as according to MSN

1647755266962.png
South Korea's Hyundai has launched the first electric car assembly plant in Indonesia, as the Southeast Asian archipelago looks to exploit an abundance of resources used in EV production.

AAVc03f.jpg© Handout Indonesia's President Joko Widodo (fourth from left in white shirt) visits the Hyundai factory
Indonesia is the world's largest nickel producer and also rich in cobalt, bauxite and copper ores, key materials in the manufacture of batteries for electric cars.

President Joko Widodo has said his government is aiming to establish an integrated EV "ecosystem" ranging from metals mining to battery production and car assembly.

The Hyundai factory will produce the firm's newest model the IONIQ 5, with an annual capacity of 250,000 vehicles.
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Indonesia, along with Pakistan, India Thailand, Malaysia Kapan the UK and a hanfull of South eastern African countries drive on the left hand side. So if they are making vehicles, they may be more inclined to make RHD versions for OZ.
Mick
 
SirRumpole said:
How did you arrive at that figure of 1 million per year ?

Under the plan I outlined, the manufacturer

a. would save on initial capital outlay by not having to pay for the establishment of factories and production lines

b. would be the leading seller of EV's in a reasonably wealthy country currently starved of sufficient supply.

I reckon those factors would counterbalance the relatively small market size.
Click to expand...
I love the idea of building cars here, but the reality is if we take a large Ford for example, they make 4.18 million cars at the Dearborn Plant in Michigan.
They sell all those cars in the U.S, they don't have to ship them, they can just train them, drive them, truck them.
In Australia we bought 71,000 Ford vehicles, so we would mean have to put 4,105,000 on ships to take them to the market, a car carrier carries 8,500 ships so that is a lot of shipping costs.
So we can't compete on a cost basis by a lot, for Ford build the cars in the U.S they only need 8 ships to send 71,000 cars here.
If Ford built the cars here, they would sell 71,000 of them and would have to rent 500 ships to send the rest to the U.S.
It just isn't a big enough market place, unless you stop imported cars coming in, or add a huge tariff to them to make our low volume cost base competitive.
 
SirRumpole said:
How did you arrive at that figure of 1 million per year ?

Under the plan I outlined, the manufacturer

a. would save on initial capital outlay by not having to pay for the establishment of factories and production lines

b. would be the leading seller of EV's in a reasonably wealthy country currently starved of sufficient supply.

I reckon those factors would counterbalance the relatively small market size.
Click to expand...
1 million per year is the targets for their existing factories, if you suggested they build a factory making say 100k a year instead it probably wouldn’t be worth their time and effort, it would be a distraction.

They would save on capital out lay under your plan, but capital is currently cheap, they can borrow at about 1%, so it would probably require further subsidies to reduce the build cost if they don’t make enough each year to get the economies of scale, or subsidies to cover the cost of shipping the excess cars to Asia.

We have pretty good supply of Teslas, no worse than any other country really, the only shortage is teslas actual production, but they are building factories as fast as they can, and capital isn’t the issue, labour is.
 
The 3 finalists in 2022 World Car of the Year are all electric. Unless you want to watch all the separate category finalists, then jump straight to 10:50 in the video below:

The category winners and overall winner will be announced on 13 April.
My pick is the Ioniq 5. It's unique in so many of its features, and its design is a weird blend of quirky contemporary moderness.
I think Australians got to order a total of 200 in 2022, and if you want to join the queue for the next batch you will get this message today (21/3/2022):
1647817968193.png
Teslas were not included from what I can gather on the basis of their models being upgrades rather than new releases. But I may be wrong as there was no other explanation offered.
 
SirRumpole said:
Inflation is coming...
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That works against your plan, because the higher the inflation rate, they better off they would be buy owning the plant themselves, rather than renting from the government, because at some point in the future what ever deal they did with the Aussie government would expire, and they would have to rent or buy the market at the much higher prices due to inflation.

However if they borrowed the money today at say 2% for 10 years, the capital value of the plant would increase with inflation.

But could you imagine the political up roar of the Aussie government paid for the full capital outlay of a Tesla factory, and gave it to Tesla rent free.
 
Value Collector said:
That works against your plan, because the higher the inflation rate, they better off they would be buy owning the plant themselves, rather than renting from the government, because at some point in the future what ever deal they did with the Aussie government would expire, and they would have to rent or buy the market at the much higher prices due to inflation.

However if they borrowed the money today at say 2% for 10 years, the capital value of the plant would increase with inflation.

But could you imagine the political up roar of the Aussie government paid for the full capital outlay of a Tesla factory, and gave it to Tesla rent free.
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Doesn't make sense.

If they (Tesla) don't outlay any capital expense in the first place, they don't have to repay anything. If the agreement expires and they don't want to renew, they simply walk away and they don't have to find buyers for the plant .

If they are making a profit from each vehicle they should be happy, they basically have no amortization costs with the production facilities and they don't have to pay for the upkeep of the factories and machines..
 
SirRumpole said:
Doesn't make sense.

If they (Tesla) don't outlay any capital expense in the first place, they don't have to repay anything. If the agreement expires and they don't want to renew, they simply walk away and they don't have to find buyers for the plant .

If they are making a profit from each vehicle they should be happy, they basically have no amortization costs with the production facilities and they don't have to pay for the upkeep of the factories and machines..
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What I am saying is that if Tesla has to go to all the effort to build and set up a factory in Australia, they will be sacrificing the ability to set one up some where else, because it takes a certain amount of brain power out of the organisation, it’s not just money, and if they have a 10 year deal, after 10 years who ever is in power the government might decide to charge them rent or want to sell the plant at market prices.

All I am saying is that when Tesla can borrow money for 10 years at low rates inflation works against your plan, because buying the plant themselves would create a capital gain for them over time, and reduce future cost.
 
mullokintyre said:
The Kia EV6, which seems to fit most of what my wife wants/needs in a car, is now sold out for three years of production.
They are just not taking orders.
The Ioniq 5 which was her next choice, is also not taking orders.
This may be ok in the future, as according to MSN

View attachment 139268

Indonesia, along with Pakistan, India Thailand, Malaysia Kapan the UK and a hanfull of South eastern African countries drive on the left hand side. So if they are making vehicles, they may be more inclined to make RHD versions for OZ.
Mick
Click to expand...
As I research what is available as I search for my wife's Mazda CX 5 replacement, I have prepared a spreadsheet with some of the relevant criteria for many of the EV cars available in OZ.
The dimensions of the CX5 would be the sort of dimensions for its replacement.
First of all, she wants All Wheel Drive.
Having had a succession of AWD Suburus prior to the Mazda, its something she regards as critical.
Given that we live in the country, she does a lot of country driving, range is extremely high on the list.
Plus we have some pretty marginal roads to negotiate, so ground clearance is another important factor.
As we often have to cart around grandkids and all the 25 tons of ancillary children's accessories, not only being able to fit at least two children's car seats in, plus have access to get the little critters out without having to be a contortionist would be go no go factor.
Then comes things like the comfort factor on longer trips (some of her HMR's are 300km round rips), the colour (only likes white cars, they are more visible on the road), then basic things like A/C , heater/demist, all around cameras lane assist etc etc.
Price is not that high on the important factor list, though she would baulk at paying anything with 6 figures in it.
Whatever she ends up choosing, its going to be along wait to get it in the driveway.
Mick
 
SirRumpole said:
The Defence Force weighs in to the EV debate.

(Has VC called some old mates ? :cool: )

Just stating the bleeding obvious really, I hope someone in power takes notice.

www.abc.net.au

Defence experts call for EVs, green transport acceleration over concerns foreign oil a 'massive' weakness

Defence analysts are calling for Australia to speed up its transition to EVs and green transport, saying the country's heavy reliance on imported oil is a "massive" security weakness.
www.abc.net.au www.abc.net.au
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Well it is not tomorrow we will see EV tanks do we?
When all we buy is coming from China, including most of EVs bit and pieces i think oil is the last of our worries
 
SirRumpole said:
The EV tanks will have to carry portable petrol generators for recharge !
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Or run on renewable hydrogen based synthetic fuels, or ammonia like what FMG is converting ships to, or hydrogen fuel cells, it doesn’t have to just be battery EV’s.

Remember some of the largest pieces of military equipment in world (aircraft carriers) are already EV’s, that only need refueling every 20 years, because they have a nuclear reactor creating their electricity.

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But also, just having a large section of the civilian economy running on EV’s increases or security, it means that if shipments get delayed or are limited to what can be escorted in by the navy, then most of the economy can continue running and the limited supplies can be rationed to the other areas.

Eg. My personal driving round won’t be taking any fuel away from other areas.
 
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