This story is available exclusively to Business Insider subscribers.An enormous shift is underway in the auto industry as internal-combustion engines give way to electric powertrains.
Unfortunately, even the most optimistic predictions for future EV revenues mean that automakers would bring in a ruinous fraction of what they make now on the cars, trucks, and SUVs they sell in the millions annually.Automobiles pollute, and with a climate crisis looming, governments worldwide are demanding lower vehicle emissions and in many cases,But we have a long, long way to go.
"For GM, we estimate their EV revenues of $2.4 billion in 2021, rising to $5.5 billion in 2022 and $8.9 billion in 2023," he wrote. "For Ford, we forecast EV revenues of $2 billion in 2021, rising to $3.9 billion in 2022 and $7.4 billion by 2023." But bear in mind that getting annual revenues on EVs in the low single-digit billions should require capital spending in the medium-double-digit billions. To use the GM example, $27 billion is a lot of money to devote to bringing in roughly $10 billion, annually, by 2025.Factoring into this discussion, of course, is the growth trajectory of the Chinese market, expected to far surpass both the US and Europe.
That doesn't mean we can't have EVs. In the past year, I have driven a bunch, and for the most part, they've been wonderful. But whenever I take a closer look at what would yield cash flow through an actual EV business, I have a difficult time squaring EV hopes with where EVs are actually at in terms of market penetration. I want them to replace all the fume-belching cars and trucks on the road, as soon as possible. I won't mourn the loss of V8 Ferraris or hulking pickup trucks.
This realization leads invariably to one place, and that's to a politically challenging situation where governments backstop the transition from ICE to EVs. In many ways, this is what Wall Street is truly investing in, with Tesla as the largest current benefactor, as well as the only effective way to currently wager money on an EV revolution.
He'll keep trying as long as the government keeps giving them money
I don’t understand the hype around Tesla. They make electric cars, the same electric cars that other car companies are starting to turn their businesses to.
Electric or not car business is just car business and no stock mania will change that. Tesla is still a 50B value low margin, low growth company, like Ford, Nissan or others.
elonmusk I’m still waiting for the solar panel shingles
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