I am wondering about your statement that low valuation is not a structural issue. However, I see high Capex needs as the primary constraint for cash flow generation and share price appreciation. What changes do you see in this respect? How could OEMs decrease their Capex needs? Looking at such start-up companies as Lucid and Rivian, they both have a large cash burn due to Capex. Arrival tries to present a CAPEX-light model but does not seem successful so far. I would appreciate your view.
I wonder if future installments will consider the effect of the Oil industry on the economic dynamic for the legacy auto transitioning to EVs?
I perceive a lot of foot dragging and whistling past the grave yard in the lack of urgency of Legacy Auto's EV transition and I wonder if economic pressure plus old boy network rib nudging can be documented.
After all if the legacy OEM successfully convert their products to EVs they still have a business but Oil companies stand to loose up to 2/3 of their market.
Great article. I wonder what you have to say about the impact of the market's transition to EVs on the valuation of the financial arms of OEMs (dependent as it is on the resale value of legacy ICE fleets). Also, how the adjacent market of stationary storage (including vehicle-to-grid) could affect the assessment of total market size for EV companies.
Having worked with many legacy OEMs in the development of new models, I completely agree with this description of their practices and limitations. Most of the auto brands we grew up with will disappear in the next decade.
I am wondering about your statement that low valuation is not a structural issue. However, I see high Capex needs as the primary constraint for cash flow generation and share price appreciation. What changes do you see in this respect? How could OEMs decrease their Capex needs? Looking at such start-up companies as Lucid and Rivian, they both have a large cash burn due to Capex. Arrival tries to present a CAPEX-light model but does not seem successful so far. I would appreciate your view.
I wonder how a (probable) shortage of battery materials this decade could create a prolonged auto shortage and affect the economics of the industry. Can shrinking volumes be combatted with increased supply/demand dislocation (higher margins) to keep OEMs alive?
Great article, indeed. Thanks a lot!
I am wondering about your statement that low valuation is not a structural issue. However, I see high Capex needs as the primary constraint for cash flow generation and share price appreciation. What changes do you see in this respect? How could OEMs decrease their Capex needs? Looking at such start-up companies as Lucid and Rivian, they both have a large cash burn due to Capex. Arrival tries to present a CAPEX-light model but does not seem successful so far. I would appreciate your view.
I wonder if future installments will consider the effect of the Oil industry on the economic dynamic for the legacy auto transitioning to EVs?
I perceive a lot of foot dragging and whistling past the grave yard in the lack of urgency of Legacy Auto's EV transition and I wonder if economic pressure plus old boy network rib nudging can be documented.
After all if the legacy OEM successfully convert their products to EVs they still have a business but Oil companies stand to loose up to 2/3 of their market.
https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php
Great article. I wonder what you have to say about the impact of the market's transition to EVs on the valuation of the financial arms of OEMs (dependent as it is on the resale value of legacy ICE fleets). Also, how the adjacent market of stationary storage (including vehicle-to-grid) could affect the assessment of total market size for EV companies.
Having worked with many legacy OEMs in the development of new models, I completely agree with this description of their practices and limitations. Most of the auto brands we grew up with will disappear in the next decade.
Noice
Great article, indeed. Thanks a lot!
I am wondering about your statement that low valuation is not a structural issue. However, I see high Capex needs as the primary constraint for cash flow generation and share price appreciation. What changes do you see in this respect? How could OEMs decrease their Capex needs? Looking at such start-up companies as Lucid and Rivian, they both have a large cash burn due to Capex. Arrival tries to present a CAPEX-light model but does not seem successful so far. I would appreciate your view.
I passed ( an exhaustive) comment, but then the app took me away to sign in and the effort was wasted.any chance of recovery please?
Who do you think are teslas biggest competitors when factoring in the points above? BYD?
I wonder how a (probable) shortage of battery materials this decade could create a prolonged auto shortage and affect the economics of the industry. Can shrinking volumes be combatted with increased supply/demand dislocation (higher margins) to keep OEMs alive?