The Expert Podcast

…A major automotive manufacturers warning that the rate we're going we could be heading down a path for disaster for both automotive dealers and new car buyers. It could be that new cars are 40 to 50% more expensive because of EVs, but also that there'll be less of them available, meaning that dealers don't have enough cars to sell. What do you mean by this We'll still antice, which is the company that makes Chrysler Jeep Dodge, Ram Those kind. Vehicles is saying that vehicle tech costs could mean smaller mock. for new cars. So. The manufacturing of electric vehicles might seem like it's less intense than. Gasoline or diesel were internal combustion engine vehicles that have a lot of moving parts pistons and lubricated, crankshafts and all those kinds of things. It seems simpler to build electric motors and a battery but there's a lot of tech that goes into that. Right It may not be as intensive manufacturing, but the tolerances and tech might be more significant. And according to their CEO. the cost of technology the kind that will power electric vehicles. Has real implications for the auto industry and its employees and could lead to future cuts. They're already cutting jobs in automotive manufacturing, even before. EVs are a large percentage of the sold vehicles. EVs are somewhere around 5% of new cars sold, maybe 10 in some markets. They're already cutting manufacturing jobs because. Of the Evie switchover and it can have more of an impact than just jobs. It could have an impact on buyers. One of the challenges, if not the biggest one. It's getting the price of the vehicle. Reasonable for consumers What they're worried about is if they do not make changes we will end up with an overall electrified powertrain which is 40% more expensive than conventional. So at the rate they're going right now electric vehicles are going to be 40% more expensive than gasoline vehicles for the cost of the car. Not counting…The PO the cost of electricity to plug it in and everything else. 40% more. So they're saying it's going to be a challenge to make it affordable to the middle-class. Cause already new vehicles. Are way more expensive than they used to be. Right now vehicles are averaging $42,000 for a new car. If you add 40% to that. Now you're talking almost $60,000 for a new car. If you had a 40% to a four. vehicle. So what this CEO is warning is that they don't make changes to the process. New cars are going to cost 60 grand for electric vehicles And. They're not going to sell as many partially because of the cost but also partially because of the production process. And the other warning is for the dealer side If middle-class consumers don't buy so many vehicles that means the market will shrink. And if the market shrinks we don't need that many plants. And then that's like a domino effect You know you don't have as many plants You don't have as many employees You don't have many suppliers as many dealers, and that's an employment problem. It also undercuts the climate goals. So if you want people to buy electric vehicles if they're $60,000 or more, Then you're not going to sell as many in there Won't be as many on the road. If we cannot sell EVs to the middle classes then the volumes meaning how many you sell are small And if the volumes are small the impact on the plan that is limited, and that destroys the purpose of what EVs are supposed to do…The…Industry we'll go from hero to zero in three years. If they don't find a way to get the cost down. By the end of the decade 2020 or 29. I predict that the transition to electric vehicle from…combustion vehicles is going to be one of the biggest…cases of management. Industry transition. And even consumer adoption. In the history of the industrial revolution.