Suncor Energy Inc T.SU

ICE vehicles are pricing themselves out of the market

[Obscure1]

The guy is a wholesaler who does lots of videos.  He goes around to dealer lots and looks at the inventory.  This video is from a trip to a Jeep/Dodge dealership (Stellantis) but I have watched similar videos from him for Ford and GM.

The legacy auto makers are focusing almost entirely on truck production.  They are loading up dealerships with higher end "expensive" trucks that very few people can afford.  The legacy auto makers are targeting the luxury end of the market like they did during the days of supply chain shortages.  As a result, the inventory at dealerships just sits and sits and sits.  Eventually the auto makers have to hold huge blow out sales so that they can replace the existing inventory with new models. l

The days of US$50,000 average vehicle costs are DONE and the legacy business model is flushing fast.  Despite the glowing numbers that Ford and GM and Stellantis reported for 2022, the actualy inventory is not sold to end customers and is still sitting on dealer lots. 

If you are in the market for a new ICE vehicle, be patient.  The steep 40% to 50% discount numbers that China is seeing for ICE vehicle sales may be Coming to America sooner than you think.  The discounts won't start at 40% to 50% but they will happen. 

In the meantime, 36 Kr reported yesterday that Tesla suppliers have been informed that they need to prepare to supply Tesla with parts for 4 million new smaller version Model Y's per year.  Logic dictates that is the $25,000 Tesla model that we have been hearing about which will be produced in Mexico and probably Shanghai next year. 

The choice of producing a smaller version of the Model Y makes sense as it is based upon a one piece chassis punched out by Tesla's (built by IDRA) 9 Tonne Gigs press.  Elon has guided in the past that Tesla intended to basically make cars like Lego parts that can literally be clicked together.  There is no place for  the100 year old "line" system designed by Henry Ford as the math doesn't work anymore.  

Don't shoot the messenger.  I'm just reporting what I'm seeing.  As an investor of SU that depends heavily on gasoline sales, just think about what is already taking place. What you do with the information is up to you.

[meritmat]

So if energy companies are such a bad buy......why is Buffet dumping billions into Chevron/Oxy?

[Experienced]

Great question!! I'll ask him on my way to Tucson next month and let you know...lol

[Experienced]

Actually, OXY is transforming itself into a carbon capture and renewable energy company which is why Buffet is interested in owning a piece of it.  They already have one of the world's largest solar energy farms in TX. Ironically, your question underlines the point I have been making about SU for over a year - it needs to use its huge FCF to move into a non oil businesses with meaningful

[MigraineCall]

OXY is nicely positioned for the future of Carbon capture and injection, and is building more. Much of it is used in the process of OXY's enhanced oil recovery, by injecting it into the formations to coax more oil out of the reservoir. Not only does the process produce more oil, OXY stands to benefit by earning a growing chunk of ever increasing carbon credits. Why can't we do that here

[mrbb]

SU dumped their solar and wind farms. Are u saying SU is wrong and should follow what's OXY doing? you said "Carbon from carbon capture is going to replace a lot of oil demand in energy intensive businesses like cement for construction and asphalt for roads to name a couple of things.  Carbon, not oil is going to be a big business in the future." sorry, carbon and CO2 are not

[Kman86]

You're still here?

[Obscure1]

A better question might be "Why am I still here?" I like the intelligence and knowledge that is respectfully posted here.  I keep coming back for it.  I used to own about 60,000 shares of SU.  I was a big fan but a couple of things kept eating away at me.  1) Why were the institutional investors continuing to dump SU when the FCF was so good? 2) Why was SU

[PabloLafortune]

If it comes to pass that new trucks sold in Canada are discounted even 30% from todays prices, the only question for me is how many I will buy. Wouldnt be less than 2.

[meritmat]

Might take 3-5 years for chev to clear there back log.  Still huge waiting list on diesel trucks  Same with John Deere 4 wheel drive tractors.  Shortage of chips.  You want a new tractor you need to order know and might get it a year from know.