The EV transition is happening rapidly & SU isn't readyExperienced wrote:
1.....management has doubled down on oil and related services such as gas stations in a world where the growth trajectory is slowing and in the case of the gas stations, likely to be negative and so the market is punishing the SP
2....this transition is going to take a decade or two
I have to respectfully disagree with Experienced that the transistion for gas stations is going to take a decade or two. I don't think Suncor has a grasp on how fast GAS stations will become obsolete. Maybe that is why Suncor couldn't attract a buyer for their stations.
China's auto market is now up to 27 million new vehicles per year out of a world market of 76 million.Today we see that Volkswagen, who make half of their profits from China auto sales, are contemplating discontinuing their Skoda operations in China. Mercedes also makes half of their profit in China and their sales are falling dropping. Same goes for virtually every ICE auto maker who have been relying upon China for years.
The reason that sales of all the legacy automakers are suffering in China is that 36% of all new auto sales in China are already now EV's. About 10 of the 36 are currently hybrids but they are declining rapidly. As you can see, the transition to EV's has been exponential in China. Unless the legacy automakers make a huge and rapid commitment to EV's, sales in China will be lost forever if that is not already the case. BYD is killing every legacy auto maker in China and they are just getting started according to their announced plans.
The Stellantis plant near Chicago has been using ROBOTS exclusively on its assembly line for years, so the UAW boss is barking up the wrong tree with his complaints about moving production to Mexico to save on production costs.
Ford has made its intentions very clear with it Blue Oval City plans.
Honda is desperately lobbying Washington to extend the company an olive branch in terms of qulifying for some form of grant based upon the fact that Honda makes a lot of ICE cars. Honda's position is that without a grant extension to Honda, the company will suffer a catastrophic decline in sales. Think about that.
On average, ICE automaker plants are running at about 30% capacity now. Other than Toyota, no automaker is investing in ICE production at this point.
With no new investment in ICE production, it won't take long for the transition to happen. Forget about the political driven target goals for 2030 and 2035 as the auto makers themselves will be resetting the goal posts long before then.
In 3 weeks, the IRA program in the States is going to kick into gear. Americans are going to be able to get $7,500 off the price of EV's at the point of sale which is going to massively accelerate the transition in the USA.
I expect that Tesla will have a $25,000 (or $30,000 at the most) car available for sale by 2025. The rapid cost reduction will be enhanced by the $3,000 to $4,000 per vehicle incentive given to manufacturers of the batteries. Since the IRA has been set into law for ten years, consumers are going to be taking home EV's for $20,000 or less in the near future. I'm waiting and I bet that millions of car buyers would rather buy an EV for under $20,000 after the rebate.
The average price for a new car in the USA of which 94% are ICE vehicles has crept up to $48,000 this year. WHO is going to buy an expensive to buy and expensive to run ICE vehicle when they are going to be able purchase a fun and inexpensive EV for under $20,000. I'm waiting.
The transition AINT GONNA TAKE ten or twenty years. Think five years at the outside.
SU did NOT get satisfactory bid for their gas stations or they would have sold them. Don't believe for one second that SU chose to hold on to the stations for strategic reasons because gas stations are part of their vertically integrated advantage. What else was management going to say???? "Sorry folks, we couldn't find a buyer".