Chevy Volt a Failure - GM to Layoff 1,300

Rivian, Lucid's 2024 production targets disappoint as EV demand wanes

The EV sales we saw the last 5 to 10 years or so weren't because EVs make much sense compared to a gas-powered car for too many people. It was largely driven by Tesla being a cool toy. ... and ZIRP -- zero interest rate policy. People buying Teslas were buying status symbols / something cool, they weren't buying a car the way most other people do.

The bogey that made that possible was a stock market that made people feel rich on paper due to low rates blowing it up, and low auto financing rates (part and parcel f the same thing) that had people across the market driving way more car than they would have chosen, or could have ever afforded, without a distorted rates market.

It's why auto loan delinquincies are starting to rise now.

In the face of higher rates, Tesla has had to drop prices dramatically, and its sales still look to have peaked. Yesterday on the call, and in inteviews today, the Rivian founder and CEO explained the really tough quarter several times by saying that higher interest rates were making "consumers more conscious and price sensitive."

Take away those luxury car EVs, which were what have really driven the sales the market has, and there hasn't been a very good market for the Nissan Leaf and more "regular" cars like it.

None of that has corrected itself even close to fully. Financial conditions are still insanely loose, even with the overnight rate at 5.25 percent. They have been pumping liquidity in via the banks -- because they started to fail and they panicked when their tightening attempt began to cause problems. It's why you see stocks still bubbling up more again and things like NVIDIA going from a half trillion dollar market cap to more than $2 trillion in a matter of months.

This is the reality: Yesterday, Rivian's results showed that they lost $43,000 per vehicle in the fourth quarter! A while back, Ford revealed that it was losing $47,000 per electric vehicle.

There is no market for these cars without the fiscal and monetary distortions creating a survival of the unfittest environment. Unless something changes dramatically with the price of gas, it's going to take more of the fiscal and monetary subsidization (and the industry still isn't profitable) to keep these businesses going, or it's going to take internal combustion engines being outlawed and forcing people into EVs (and then at a cost to other things).

But right now?

 

Sexy is a bit of a stretch. But I just looked because you said that, and I agree, it is a way nicer looking car than the old Prius was.

 

Yeah, but your Alfa is horndog that doesn't discriminate. I saw it looking over a Kia Soul.