SAI Weekly 32 - 24: Test Driving EVs Up North, Overcapacity in EVs, Volkswagen Story (in charts)
Since I missed last week’s newsletter, we may have multiple editions this week so I can catch up all up on a few different things. This one will focus on my trip to Vancouver and VW Group’s woes. First, about that trip to Vancouver.
Got back from Vancouver on Monday AM.
Delta, what is going on?? Of the last 4 trips I’ve taken, 3 of them have been delayed. two of them, enough so that I missed connections.
This time, I was connecting via Seattle to get home, but that flight was delayed and rescheduled to after my connecting took off. Suffice it to say, I decided to reschedule to a later flight, a direct one that took off much later. The Red Eye. Got into Detroit at 7:30am just in time to make my 9am in-person meeting.
The one silver lining was that rescheduling was quite convenient – I didn’t have to speak with anyone and did not have to pay any fees. The biggest problem was that I was now on a red eye and it was operated by WestJet so the amenities on offer, wifi and TV were NOT part of the Westjet flight.
Delta – get it together. I am tired of accepting that any flight I book with you is LIKELY to get delayed. This totally reminds me of China where flying out of and into Beijing, Shanghai or meant likely getting delayed. In that case, I ALWAYS tried to book the earliest flights since later flights meant additional risk of delay or cancellation.
Onto the Electrify Everything Canada Conference. Was good, small(er) and VERY regional but good. And it was a good chance to see how they do it up North, transportation wise.
One company that caught my attention – EVO Car Share. I stayed with an old Beijing friend and had another drive up from Seattle to hang and while I was there and not walking or taking the bus, we used the car share. It’s pay by the minute and the best part is that you can park it just about anywhere – when you’re out in the burbs.
Trying to sort out the economics of this business – mostly Prius’s being used because owning and maintaining that many vehicles has to be pretty expensive. It’s not surprising that it seems to be a publicly funded enterprise. Will learn more about this because it’s NOT unlike Zip Car, but with all the kinks worked out.
Next best thing about the show. I got to drive quite a few cars. Here’s a summary of what I got behind the wheel of and moved some electrons from cathode > anode:
This EV drove most like a car. It was slower than the others I drove and felt a bit heavier with a bit of mushiness - Of course it’s an SUV so it’s not supposed to drive like a sedan. I thought the front console (with two screens) was a bit over the top - the three air con vents really stood out and not really in a good way.
That said, I could see this becoming a decent seller for GM since it’s priced right and had was decently roomie.
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I really like this. The way it drove, the UI (User Interface) design on the center console. There was a HUD or Head Up Display and there were settings to make the car drive more or less aggressively. Two things that aren’t great - the price and the range. Also, it’s a VERY Scandinavian in design so many westerners (read Americans) might not find it that attractive, specifically the interior.
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Similar to the 3, although the 2 is a midsize sedan. Liked how it drove, had a good steering feel and you could lean into the corners.
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One company that made its presence known was Vinfast. They had a very large booth with a few different cars on display. I decided to take the VF8 for a spin, the B segment SUV / crossover. I tried to have an open mind about it and after I got out, I thought - not bad. Fit and finish was the worst of all the cars I drove that day, meaning that the materials, design and overall build quality wasn’t like the others, but I’ve seen a good deal of improvement since I first laid eyes on them.
As for driving, eh - it was the least compelling vehicle I drove. That said, it was the cheapest of the bunch, although not by much (vs the Blazer). The open question about Vinfast, who’s going to bankroll them moving forward? Expansion takes alot of capital and not Vietnamese Dong, more like a few dozen Brinks Trucks worth of Benjamins.
Be suspect of anyone that unapologetically sings it’s praises because it still needs some work to be able to compete with the legacies, let along China EV Inc.
Here’s a quick walk around of their BIG booth.
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This was my favorite vehicle of the day. Fast. Good steering feel, light but not too light. and the UI was quite logical and well thought out.
Great interior and exterior design. If Rivian keeps evolving this design language into their upcoming R2 and R3 and can learn how to manufacture at scale, tighten up its supply chain management and wring every ounce of benefit they can out of the VW Group tie-up - they will be just fine.
This R1S and it’s brother the R1T are NOT cheap so I’ll have to wait like everyone else for the R2 that’s supposed to start out around $40-ishK in 2026.
Curious to see the R3? Here you go:
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QUOTED / INTERVIEWED
- Chatted with Ed White from FT about overcapacity in China, but not only for Chinese brands but foreign brands. It’s something I’d mentioned previously in this newsletter - that eventually most if not ALL automotive companies will use China as a manufacturing hub and export out from their operations in the Middle Kingdom.
BIGGEST NEWS THIS WEEK
- Volkswagen wants to close plants in Germany. Its complicated. This is an overdue post since this was written about last week. That said, I still wanted to throw my perspective on this because there are some lessons to be learned that may have still not been pointed out in articles the last week or so.
Here’s my wrinkle, I am telling this story via charts created by ChatGTP:
Internal Combustion Engine (ICE) vehicle sales in China (in millions)
Volkswagen Group China Sales 2016 – 2023
This STEEP decline is mostly attributed to VW Brand.
Volkswagen Brand Sales 2016 – 2023
And as VW Brand’s sales have fallen precipitously in China, reliance on Porsche for profits has increased significantly.
But Porsche has recently run into major challenges in the last 18 months.
Porsche Year over Year profit change in China
So declining Volkswagen Brand sales has put the squeeze on factory utilization making everything much more expensive, while Porsche profits have been shrinking which puts pressure on Group profits. So VW Group is getting squeezed on both sides.
But who’s benefited from this?
BYD China Sales (in millions)
Tesla China Sales
This could be considered an oversimplification and I’ve gone over the ‘whys’ in past newsletters but context ALWAYS matters so I wanted to SHOW you this time why, not tell you.
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This weekly newsletter is a collection of articles we feel best reflect the happenings of the week or important trends that have effects on the global automotive and mobility sectors. We also provide a point of view that we hope educates and sparks debate.
The Sino Auto Insights team
I suspect that the average American will appreciate domestic EV alternatives to the Scandinavian Tesla minimalism. If that is so, where will Tesla be then ?.
Don't know many people subscribe to the "Wall Street Journal", great article on Jim Farley, the CEO of Ford, and his reaction to his trip to China. I posted the link, hopefully some non-subscribers can read it.