VW panics as auto industry disruption continues"After its CEO criticised rivals for discounting EVs, VW China has cut the price of the ID.3. Its new base price in China is RMB125,900 ... the equivalent of 15,989 Euros. This compares to a base price of 39,995 Euros for the ID.3 in Germany"
VW has cut back production in its EV plant in Germany by 30% and has also cut back shifts in 3 plants in Brazilian plants due to a lack of consumer interest. So now we see VW cutting prices by 60% in China. In the meantime, VW's ICE sales are getting slaughtered.
What has any of this got to do with SU??????????
Tesla slashed prices and are breaking sales records quarter after quarter in country after country. BD did the same and they are also breaking records in China and starting to ramp up international sales.
So?
EV's have rapidly become significantly less expensive the ICE vehicles to buy before the IRA rebates (available in different forms in most countries) and before the massively lower operating costs are taken into consideration.
Tesla expects the cost of its soon to be released 3rd generation cars to drop 50%.
So?
There is an irreversible trend taking place where EV's have already become much cheaper than ICE vehicles and it is going to get a lot worse for gas powered vehicles over the next 5 years
So?
SU is pretty much a one trick pony (production and sale of hydrocarbon fuels for gas/diesel powered vehicles in the USA and Canada. TMX isn't going to help much if any.
As the trasition to EV's accelerates, SU shareholders are going to be left holding a progressively empty bag.
I keep reading here how oil demand is going to increase and oil prices are going to go up.
If that is true, why did Saudi Arabia recently announce that it was extending in 1mm bpd reduction through August and why did Russia announce it was cutting exports 1/2mm bpd? Worse still, why did those incredibly bullish announcements barely move the needle on oil prices?
Europe and China and India and the developing world want lower oil prices. None of those geopolitical entities loves the USA, but they will ultimately do what is best for themselves. The USA is oil independent (and can grab Canadian oil if and when it needs it) so they are happy to watch Russia squirm.
If you take off your blinders and look at what the inevitable, you will be able to see why SU shares have sold down from the $50s to the $40s and now into the $30's.
Do you actually believe that oil prices are going to go back up anytime in the near future? First, it was "wait until the US starts refilling the SPR". Then it was "increased demand for oil is just around the corner". Then we heard "Russia wouldn't be able to sell its oil".
In the past, OPEC was calling the shots. That no longer appears to be true.
It's OK to think you are smarter than the powers that be who run the world, but it could end up being expensive.
While all of the above is scary for SU shareholders, the EV transition is just the beginning. By 2030, the energy grid is going to look very different that it does today, and not in a good way for SU shareholders.
No amount of hoping or wishing or self-delusion about increasing demand for oil is going to change the inevitable.
Feel free to continue finding excuses for justifying an inevitable losing strategy if that works for you. I'm annoyed with myself because I waitied to the mid-forties to get out as "those fund managers must be wrong".