In a recent YouTube video, Sam of “The Electric Viking” dropped a bombshell on the electric vehicle industry. According to Sam, reports from both Tesla and Bosch indicate that while Tesla may make a profit selling EVs, most other automakers are facing significant losses.
Manufacturers Are Losing Money on EVs
Legacy automakers are in a bit of a bind with EVs. Sam pointed out that these manufacturers are actually losing money on each EV. He added that this financial hurdle is the main reason legacy automakers are dragging their feet on electric vehicles, even though brands like Hyundai and Kia are making compelling EVs.
A Major Loss
According to Boston Consulting Group, the average EV sale rings in at around $50,000, but it costs manufacturers a whopping $6,000 more to produce each car – that’s a net loss! And for some companies like Ford and Neo, the situation is even worse, with losses reaching nearly $30,000 per EV.
The Reason Behind the Losses
So, what’s driving these red numbers? Sam explained that a major culprit is the limited scale of EV production. In China, the industry seems to have a magic number: 500,000 EVs produced per year is the supposed sweet spot for profitability. But many established automakers are falling far short of this target, leaving their EV ventures stuck in a cycle of losses.
The Problems
The video also delved into the tricky situation car companies are facing: prioritizing quick profits now or building a future-proof plan. Some, like Toyota, are taking a shortcut by buying pollution credits from Tesla instead of investing in making their own EVs. Sam shared that this might save them money right now, but it could leave them in the dust down the road when it comes to competing in the growing market.
The Demand for EVs
Sam also talked about how much people actually want EVs. A recent survey showed a whopping 40% of US consumers are eyeing an EV for their next car! But there’s a catch: these drivers have some specific demands.
Balancing the Expectations
The drivers want their EVs to charge up in just 20 minutes, and travel 350 miles on a single charge, and all for a price tag under $50,000. Sam shared that balancing these expectations with making a profit is a big hurdle car companies need to overcome.
The Solutions
Sam also touched on the need for partnerships and joint ventures to drive greater scale in EV production. By sharing costs and resources, automakers and suppliers can lessen the financial risks associated with EV manufacturing.
Looking Ahead
Concluding the video, Sam asked the big question: Can Tesla or any other automaker be able to deliver a truly affordable and appealing EV around the $25,000 mark? Sam added that if they crack that code, it’s likely we’ll see a boom in EV sales around 2026. This would mean more choices for drivers, with lower prices, longer driving ranges on a single charge, and faster charging times.
Share Your Thoughts
So what do you think? What strategies do you believe these companies should prioritize to improve profitability and competitiveness?
