[opinion] - hmmm…VW/Audi/Porsche may be in trouble…

[Der-Schwabe]

just like a Porsche.



just like Porsche - low volume manufacturer



yep - sounds german to me…



3.3 mm damage to the battery tray of your Taycan - sounds familiar to me…



German auto vs. China lower cost and higher volume EV's

Hmm, really? From what I have read, a significant proportion of US made Abrams tanks (20 out of 31) were destroyed in Ukraine.


" Recent images indicate that the rate at which Ukrainian forces have been losing Abrams tanks has increased significantly. This follows a period of intensive losses from late February to mid-April, with tanks first seen deployed on February 23, and the first loss confirmed three days afterwards. The vehicles were temporarily withdrawn from the frontlines in April, after which their protection levels were increased. Over 20 of the 31 Abrams tanks delivered to Ukraine are now thought to have been destroyed, disabled or captured, with most kills captured on film being achieved by guided artillery or by single use ‘kamikaze’ drones, while one was confirmed to have been achieved by a Russian T-72B3 tank after the two exchanged fire. Western media outlets’ interviews with Ukrainian personnel have highlighted their dissatisfaction with the Abrams’ performance, citing both technical issues such as vulnerability of electronic components to condensation, as well as their vulnerability to Russian fire. "

Ukraine is Losing its Last U.S.-Supplied Abrams Tanks Fast

So it was concluded:

" Summarising the issues with operating the tank class, U.S. Undersecretary for Defence for Policy Colin Kahl previously warned: “The challenge with the Abrams is, it’s expensive. It’s difficult to train on. It is very difficult to sustain. It has a huge, complicated turbine engine that requires jet fuel… Frankly, our assessment is just that the Abrams is not the right capability at this time.” This mirrored similar criticisms regarding other Western tank classes supplied to Ukraine, namely the Challenger 2 and Leopard 2, which similarly suffer from very heavy weights and particularly high maintenance needs. "

U.S. Concludes Abrams Tanks ‘Not Useful’ For Ukraine Following Heavy Losses

May be cars are not the same as tanks...

 

[whitex]

May be cars are not the same as tanks...

Definitely, however there are some common trends here, primarily the ever increasing complexity, the expense, and difficulty with maintenance. For example, I see more and more people on the roads driving with burned out headlights, or tail lights. A repair used to be a relatively inexpensive light bulb and a 2 minute swap with a screw driver as the only tool necessary. Today it's a dealer visit and a swap of a $500-$2,500 per headlamp or tail lamp assembly, plus sometimes hours in labor. With cars, many people just don't do it (some will drive with high beams permanently on for example once the low beams burn out for example).

So it seems both cars and tanks, the west tends towards complex engineering marvels, which may be acceptable for some car owners (especially then new), but for tanks, and probably the general car driver, a utilitarian design - quick and inexpensive to keep running, might be a better choice. Of course we also have governments with their bleeding hearts mandating more and more complex equipment into car, making them more expensive to buy and maintain, but that doesn't apply to tanks so much.

 

[chun]

Of course we also have governments with their bleeding hearts mandating more and more complex equipment into car, making them more expensive to buy and maintain, but that doesn't apply to tanks so much.

https://www.renault.co.uk/electric-vehicles/r5-e-tech-electric/configurator.html?conf=https://uk.co.rplug.renault.com/c/BACJv/AhtNM

Renault 5 has all those requirments imposed by governments, and more, at 26.000 euro.
And while it's definitely more expensive than a cheap car used to be in the past, income has also gone up.
And on the used market this will go for 15.000 in 2 years max.

The point I am trying to make is that it's not necessarily the governments fault/the complex equipment fault that the cars got more expensive to buy and maintain; but rather that it's the fault of the automakers refusing to take anything less than maximum profit.

Because there are cars that prove you can have all that technology at a good price, even in europe manufactured by europeans on european wages.

Now add to that chinese labor force, chinese manufacturing integration, and chinese speed in manufacturing, and you can get even cheaper.

 

[Travis]

Had a headlight replaced on a 2022 Macan, its was $4,000. Crazy. Technology is the reason cars have gotten so complicated and expensive. Not much different than many other products/industries. Look at road bicycles, a new high end bike is $15,000, has electric servo motors and batteries for shifting, wireless chips for wireless shifters, seat posts with batteries, wireless communications, complex hydraulic designs, carbon fiber spokes, list goes on. My front door has an electronic lock with WiFi, batteries, motor, etc. It cost 10x a conventional mechanism. HVAC systems are much more complex than they were 15 yrs ago, home appliances have complex control boards, it’s never ending tech. Certainly not limited to automotive industry. Speakers now have computer chips, cameras.

 

[whitex]

The point I am trying to make is that it's not necessarily the governments fault/the complex equipment fault that the cars got more expensive to buy and maintain; but rather that it's the fault of the automakers refusing to take anything less than maximum profit.

I think it is a combination of both. I've seen a study which tracked cost of cars in average hours of earnings. That has been climbing. I can't find that study now (it was for the USA, not EU) but a quick Googling yielded the price of the original car for the masses, the Model T, which was $260 brand new, in today's money $4,662. The only place I know of where you can get a new car for that much today is maybe in China, and those cars lack most of the western government required safety features. Here is one even cheaper, though not for highway use:
https://electrek.co/2023/11/14/two-years-after-buying-a-2000-electric-truck-from-china/

I think in general the governments have great intentions, but don't realize that they are legally mandating a standard of living which is above the average citizen production (i.e. the average person does not produce enough to afford the legally mandated standard of living). So in the end the math does not add up - society as a whole is not producing sufficient output to provide for the desired standard of living for everyone. Take a GDP per capita for a country. Two neighboring countries in EU, say Germany and Poland, more than 2x difference between them, yet the same mandated standards. If you look at Bulgaria, even lower GDP per capita. Bottom line ends up being that people have to work more, in order to produce more, so they can afford a new car. For example, while emergency braking is a great feature, not everyone may be able to afford it. Having a personal physician, and a personal chef, and a personal bodyguard, would likely be beneficial for personal health too (even prevent some murders!) - but it's obvious to most we shouldn't be legally mandating this.

 

[daveo4EV]

why are the german's in trouble?

this is why…



just one example of german sausage making (you know the kind you don't want to see up close)

the video/talk is simply fascinating example of why existing companies can't respond to disruption.

 

[A.Mayor]

why are the german's in trouble?

this is why…



just one example of german sausage making (you know the kind you don't want to see up close)

the video/talk is simply fascinating example of why existing companies can't respond to disruption.

Baseless

 

[snstevens]

why are the german's in trouble?

this is why…



just one example of german sausage making (you know the kind you don't want to see up close)

the video/talk is simply fascinating example of why existing companies can't respond to disruption.

Great video from someone who actually worked on the development. I hope that the Mission-E wasn't designed in the same manner ?

Thanks for sharing!

 

[whitex]

Baseless

It appears to be based on someone's direct experience. Do you have any sources which contradict any of it?

PS> I happen to own a Q8 etron and can confirm they did reuse a bunch of stuff from their ICE cars. For example the car has an extraneous "Accessory Mode", where everything is on except for the "engine", which also means the air conditioning doesn't work - this mode is pointless in an EV. There are many more such idiosyncrasies which make no sense for an EV.

 

[daveo4EV]

Baseless

based on what? seems pretty normal entrenched corp. thinking that prevents them from seeing hte forest for the Tree's while they try and not abandon their existing cash cow(s)…

 

[Tooney]

Even Porsche can't find its lane in China as foreign automaker sales skid

• Porsche sales fell 42% in China in the first quarter
• Sharp decline of legendary brand reflects wider China-market problems for all foreign automakers
• Chinese EV makers moving into premium segments after dominating low-cost EVs

Unlike other Volkswagen Group (VOWG.DE), opens new tab brands VW and Audi, which showcased five new electric models at the Shanghai show, Porsche retreated to its combustion-engine heritage. The automaker unveiled two limited-edition variants of its 911 in a display surrounded by vintage examples of the legendary sports car. A lighted sign read: "There is no substitute."

The automaker's shares are now down 44% from its stock market debut and 21% year-to-date. Porsche's China sales have fallen for three straight years.

Volkswagen and Porsche CEO Oliver Blume dismissed concerns about declining Porsche sales in China as he addressed reporters after unveiling VW and Audi models on Tuesday ahead of the Shanghai show.

"We don't care about the volume," Blume said, adding he was more concerned about keeping prices high - at a level "appropriate for Porsche."

Blume denied Porsche competed directly with Chinese brands such as Xiaomi and Yangwang: "They are cool cars," he said, but they lack Porsche's "driving ability" and play in a "lower pricing segment."

Blume said the company might abandon the EV segment entirely in China, where more than half of new cars sold are now EVs and hybrids. Porsche sells two EVs here, the Taycan and Macan. It does not report specific model sales by country but Blume said Porsche's EV sales in China were "relatively low."

"We will see in the next two to three years whether Porsche exists as an electric brand here," he said.

The core attributes that have historically made a Porsche a Porsche - the throaty roar of a 911's flat-six-cylinder engine, for instance - don't have the same appeal in China as in other Porsche markets.

"The concept of Porsche as a golden brand means nothing to younger generations in China," said Bo Yu, China country manager at research firm JATO Dynamics.

 

[chun]

Blume denied Porsche competed directly with Chinese brands such as Xiaomi and Yangwang: "They are cool cars," he said, but they lack Porsche's "driving ability" and play in a "lower pricing segment."

Blume said the company might abandon the EV segment entirely in China, where more than half of new cars sold are now EVs and hybrids. Porsche sells two EVs here, the Taycan and Macan. It does not report specific model sales by country but Blume said Porsche's EV sales in China were "relatively low."

"We will see in the next two to three years whether Porsche exists as an electric brand here," he said.

So he's saying they are not competing with better cars at lower prices, they are competing at higher prices ? So more price hikes.

And they are pulling back on EVs... rather than try to make a competitive one.

I guess Porsche doesn't want to be regular joe's, the engineer/doctor sports car anymore, they want to be ferrari, sell only to milioners and investors. Definitely explains the strategy of releasing a limited range of 2000 911 heritage every 4-6 months...

 

[whitex]

So he's saying they are not competing with better cars at lower prices, they are competing at higher prices ? So more price hikes.

And they are pulling back on EVs... rather than try to make a competitive one.

I guess Porsche doesn't want to be regular joe's, the engineer/doctor sports car anymore, they want to be ferrari, sell only to milioners and investors. Definitely explains the strategy of releasing a limited range of 2000 911 heritage every 4-6 months...

Traditional automakers are having a hard time with new casual driver user experience. This is further compounded by EV drivetrain, leaving engineering organizations applying ICE concepts to EVs, such as an accessory more which turns on electronics but not the ICE engine, therefore not air conditioning compressor. Yep, I got one of those mode in my wife's Audi Q8 eTron - total nonsense.

So Porsche is doubling down on its strengths, ICE track cars and collector cars. People spending $200K+ for such cars are not going to feel disappointed that they got beat from the light by a soccer mom in a Model 3 performance. That is because the soccer mom doesn't go to the track, nor exhibit her car at shows - so problem avoided, happy customers again, higher prices, higher margins, volumes much less, but higher margins was the goal, not higher profit.

 

[Wivenhoe]

I think all Western manufacturers are struggling in China. They have been saying for years that the Chinese government were heavily subsidising Chinese EV’s. Trump is adding cost to make imported cars uncompetitive, China artificially reduces costs of Chinese EV‘s to make imported cars uncompetitive. Same result = reduced markets for European manufacturers. Europe impose some tariffs but not enough to make subsidised Chinese cars uncompetitive = Chinese car sales grow everywhere except perhaps US but China may well win the tariff battle sooner than later and then the US will be swamped by cheaper Chinese cars.

Tesla will then be in more trouble as their selling points of price, software and battery tech will be beaten on all points by cheaper Chinese models. If Tesla then shut those Chinese cars from the Supercharging network after allowing other imports access, I suspect the lawyers will earn a fortune.

Mercedes saw the trajectory and announced they would stop producing small cars i.e. Move to more prestige cars where sales are not on price alone. Porsche will never compete on price alone, let alone against subsidised competitors so what he said is just the obvious.

 

[whitex]

think all Western manufacturers are struggling in China. They have been saying for years that the Chinese government were heavily subsidising Chinese EV’s. Trump is adding cost to make imported cars uncompetitive, China artificially reduces costs of Chinese EV‘s to make imported cars uncompetitive. Same result = reduced markets for European manufacturers. Europe impose some tariffs but not enough to make subsidised Chinese cars uncompetitive = Chinese car sales grow everywhere except perhaps US but China may well win the tariff battle sooner than later and then the US will be swamped by cheaper Chinese cars.

You seem to be assuming that all that Chinese cars have over traditional auto manufacturers is price advantage. While they do have that advantage, that has never been a problem for Porsche. They always sold cars for more than other brands, with similar features as daily drivers. Other VW brands even competed nearly directly - Audi A8 vs VW Passat were nearly the same car, yet Audi didn't fold tents unable to sell the A8 (heck, back in early 2000's I bought a W8 Passat which was more powerful than any A8 sold at the time, yet cheaper, and when working on it on a lift, plenty to parts had "Audi" stamped on them). So something seems different here - Porsche cannot seem to complete on design and features, not just price. They are simply not keeping up on technology and consumer expectations which are continuously being raised by the competition. Porsche engineering is not agile enough.

If Tesla then shut those Chinese cars from the Supercharging network after allowing other imports access, I suspect the lawyers will earn a fortune.

I doubt it. No law says they have to open the network to anyone. Even the government incentives only require one other company with access to infrastructure (the last administration worded the qualifications for the billions of grants as "EV charging not locked to a single vendor", so Tesla + Ford definitely qualifies).