When Tesla first offered its Model S in 2010, the price of batteries was $1,200 per kWh.
It took until October 2023 to get that number below $100 per kWh
Today, just one year later, the price per kWh is now at $53
What does that mean to EV vs ICE manufacturers?
* the breakeven point where it is cheaper to produce an EV for less than it costs to produce an ICE vehicle is $60/kWh
* the latest estimates within the industry expect the cost will drop to as low as $10/kWh by 2030 with a $30 target now seen as being possible in 2026 or 2027 due to the supply of batteries growing at an extraordinary rate in the USA and China which is expected to far outpace demand for at least the next 4 years
What's happening in the auto industry today?
* for the past decade, Toyota and VW have vied back and forth for the title of producing the most cars in the world at about 10 million per year
* VW: is now in crisis as their Chinese sales (where auto companies have historically derived 50% or more of their profits) have fallen off a cliff - is now faced with closing 3 plants in Germany where capacity utilization has dropped to under 60% which is unsustainable for survival - has told their German workers that they need to take a 10% pay cut for the company to survive in Germany which has resulted in 100,000 workers going on strike which is not going to end well for VW - has US$195 billion in debt which will never get paid >>>> VW is racing towards bankruptcy
* Toyota: only dropped 5.1% in the first half of the year but their never ending business strategy changes are not fooling anyone - with it's $362 billion in debt, Toyota has waited too long to adapt - company survival wthout government intervention is very much in doubt
* The news for Nissan and Mazda is even worse
* The American Big 3 have all taken a step back in reacting to the future EV direction of the industry. Are they going to be too late to the game with their ever increasing prices? I dunno.
Will Trump follow through with a 100% tarrif on Chinese vehicles or ban their importation altogether? Maybe Trump will allow the Big 3 to partner with Chinese EV companies who will produce in the USA. Without protection or partnerships, the Big 3 are done. The fact is no longer open to debate but nobody will talk about it.
Check out the BYD Dolphin hatchback. It is a very well made care that is selling for US$14,000. There is no logical arguement that supports buying anything else in the category.
Tesla is expected to introduce a competitive hatchack to the Dolphin for $25,000 to $30,000 in the first half of 2025. It won't be long until Tesla introduces its Cybercab which the company says will be made with approximately 1/2 of the parts it uses in its Model 3 cars. What will the Cybercab be priced at?
The Trump administation and hopefully the new Poilievre government will likely provide Suncor with the support it needs to flourish as a tar sands producer of oil for the next 4 years. I hope Suncor uses the opportunity wisely to figure out how to dump or repurpose its 4 refineries before it is too late. At the very least, SU will need to reallign the production capabilities of its refineries to match the inevitable change in demand for gasoline.