shifting ground
Global automakers experience periods of feast and famine that fall on cycles of approximately seven to ten years. What is happening now is different.
The shock of the pandemic, two years of supply-chain chaos and possibly a recession this year are hitting the industry with a once-in-a-century shift in fundamental technology.
As combustion vehicles give way to electric vehicles with high-power computer chips for the brain, many of the power advantages that Toyota has had are being eroded.
The shift to electric, computerized and software-driven vehicles has opened the door for Tesla and other startups, especially in China, to re-set the ground rules for competition. Tesla’s price war may be just beginning.
“We question whether competitors can keep up in this EV race,” Morgan Stanley auto analyst Adam Jonas wrote in a note this week.
Incumbent automakers can no longer rely on the refinement of mature vehicle technology to remain competitive. Established automakers are investing heavily in EVs – some faster and with more success than others.
South Korea’s Hyundai Motor reported better-than-expected results on Thursday fueled by strong sales of its new EV lineup. Hyundai estimates that its EV sales will grow 54% this year — a faster growth rate than Tesla predicted.
Chinese manufacturers putting EVs in 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.
Intense competition puts pressure on Renault and Nissan to resolve talks to restructure their alliance. Sources said the companies are now aiming to announce a deal – including an investment by Nissan in Renault’s EV unit – by February 6.
