RE:RE:RE:RE:RE:Overlooked aspect of the Mr.Lube businesshawk35 wrote: Be very careful with the numbers you are using. Most projections are now obsolete. The reason is, the catalyst for moving to EV was the carbon tax being fully implement which increases the cost of gasoline. All that changed with Russia. Gas prices are now higher than the target for full implementation of the carbon tax. And the carbon tax will continue to be added on top of these already high prices for several years.
In Quebec you can get up to a $13,000 rebate from Ottawa and Quebec City. Couple that with sky high gas prices and lower annual maintenance for EV and you have a complelling reason to buy EV. It won't be long until Ontario offers their own rebate to protect all the new EV jobs that Queen's Park is now paying for. Already sales of EV are backordered because of increasing demand and limited supply. Won't be long before that changes.
Don't get me wrong, I believe in EVs and follow that market closely. However, supply limits will limit sales for a long time (at least 2025). The 20% new vehicle sales in 2025 is a current projection, based on current supply and supply being built at the moment.
It takes 3-4 years to develop an EV and the manufacturing capacity, including the car battery assembly. That's the first hurdle. Look at the Cybertruck, announced in 2019 and may launch in 2023 in limited quantities.
Also, while there are subsidies to purchase EVs, affordability is still an issue, since only limited production is available under $75k CAD, and those models often miss key features.
The other hurdle is the one with batteries. When you build a model, plant and battery assembly lines, you do it based on today's technology. Today's technology requires much more metals to get to 20% of new vehicles sales in EVs than is currently mined. Developping a new mines with permits, ramp-up, etc easily takes 3-4 years. The current projection for mining of cobalt and lithium isn't enough to get to 20% EVs in yearly sales. New technologies are being developped but will likely be only integrated in the supply chain after 2028.
As an investor looking at the different EV companies, a year ago, I was telling my fellow investor friends that I wasn't worried about demand since "the market will absorb any new production of EVs", but I was worried about production and costs, since those are problematic in the sector. Look at Lucid, Rivian and the other newcomers, they're all feeling the cash crunch even though they have long pre-purchase waiting lines for their EVs. That was a year ago, when gas prices weren't those we're seeing today, the demand was already surpassing the offer by far. It may be even worse today, but sales can't be higher than supply and that will be true for years, maybe even a decade.