Good day from Goonellabah, NSW, Australia. So true, Lara - I started in 1972 to 1974 when I received air pollution results from my contract with the EPA NSW governments. I did this because I used to live in Eastern Arterial Rd, Lindfield NSW 2070, Sydney, one of the areas with air pollution. I went on to expose the air pollution across Sydney and Newcastle. I was in pain arse of every EPA of all States across Australia. I used to catch electric and light suburban trains, and when I was in Sydney, I went from Newcastle to Wollongong to Blue Mountain. - 🤗Cheers, Ian Cleland.
The biggest problem is that the old companies are under pressure to make short term profit and CEO's are paid on that performance. Further; pensions funds and investors are looking for returns quarterly and will penalize the company if they don't deliver. This is why Tesla has done well, it's investors were willing to take the long view.
GM Mary Barra is paid bonuses for release of more EV models, so GM releases several with virtually no volume and lots of cost. Tesla doesn't care and they tell investors this. Different mindset and different outcomes.
The problem is that given the truth of what you said, they didn’t start spending tiny amounts of money a decade or more ago to keep pace with Tesla. They denied the reality, probably because they never once drove a Tesla to understand what people liked about them.
"The biggest problem is that the old companies are under pressure to make short term profit and CEO's are paid on that performance. Further; pensions funds and investors are looking for returns quarterly and will penalize the company if they don't deliver. This is why Tesla has done well, it's investors were willing to take the long view." The reason Tesla have done well is Elon. He simply doesn't care about stupid shortsighted investors, neither does the board.
In the US, both GM and ford have announced shifts in production to Mexico. It's going to happen bit by bit but the US factories are going to close. IMHO the UAW priced themselves right out of the market.
I think you are kinda right but it will take awhile. Many ppl stubbornly buy American. Patriotism and brand loyalty are significant to some ppl. I’m a Ford fan, but not an owner due to the repair aggravation.
Number 11: Consumers know in their heart that cars are in a huge transition. So they procrastinate. Not sure yet about EVs, they don't buy ICE cars either because of the uncertainty about their future. So ICE sales stagnate.
Most dealers can’t find mechanics. If they do some aren’t good, and they still have to sell . Like you said “ we can will wait “ Uncertainty factor, and no trust because of recalls
Not for some time yet; they’ll continue to wander around the wrecked landscape like shocked dinosaurs that somehow managed to survive the 66 million year old asteroid that smashed into the Gulf of Mexico… within a few months or maybe a year or so later they were all dead. Just like the legacy automakers that can’t meet the new paradigm the changes of the marketplace have created.
For number two, what you and basically everyone misses is that management bonuses are tied to profits and other metrics that are hurt by losing money on EVs. So effectively all managers at legacy automakers are incentivized to fight EV production. This helps explain awful decisions like shared platform EVs…
Which is why management and the board should have split out an EV division as Ford sort of did, and Volvo actually did. Neither of those worked either, so maybe there is no way.
@@tommornini2470 Really this comes down to iterations and time. Internally, Tesla estimated that any company not deeply committed to making EVs by 2014 was doomed. Because there is a learning process, and Tesla figured three platforms to get it right, legacy taking four years minimum per platform…that would have them actually ready to compete in 2026. But of course legacy automakers didn’t think anyone could make mass market priced EVs and were not worried about losing 100,000 wealthy customers a year worldwide that much, so it was only when Model 3 ramped up in 2018 that alarm bells started going. But even knowing what needs to happen, management is incentivized to oppose it, and they are pretty stuck now. To compete on price they HAVE to make enormous new factories that use far less labor per car, but their unions would riot, managers would riot, it means writing off old factories that are now considered “assets” on the balance sheets so stockholders would riot, and all of that only pays off if they can design an EV that will sell 500,000+ cars a year. Which none of them have shown any ability to do. Dietz at VW had such a factory in the plans and got his pink slip for it. They cannot possibly compete making EVs in small numbers from small antiquated factories and still outsourcing a lot of the car parts. But what CEO is going to jump on that sword to try to get a huge new factory now?
Legacy auto also has pressures from declining sales which affects both them and their suppliers, leading to crippling cost increases. Government policies to reduce emissions are also becoming an increasing burden as the mandated standards are progressively tightened. Volkswagen, for instance is partly owned by their regional government, so there will be resistance from that quarter to facing up to the required workforce reductions (for them and their suppliers) to become cost competitive. That said, there is no need to become as vertically integrated as Tesla or BYD, so batteries can definitely be outsourced, for instance it would be insane for each manufacturer to build their own charging network. Tesla have set a high standard there, but I do not expect them to have worldwide domination of that market.
This is a very very serious problem and the livelihoods of so many customers, workers, corporations, stockholders, etc. is in the balance. Tesla can not (and probably does not even want) to meet the total demand for cars or even EVs. It needs other manufacturers to fill the gaps. These 10 problems certainly are among the big ones. What has happened to the auto market in China needs to happen in Europe and the USA - lots of companies making low priced EV cars. Perhaps Ford has the best plan by setting up new, independent teams and eventually factories and gradually shifting resources toward those that can become profitable. This is why some sort of "Marshall Plan" is needed to rebuild and modernize the auto industry, in the fashion Tesla is modeling.
@@tedg1609 Yes, that plan was centralized; not so sure about how decentralized China is as far as auto industry is concerned. The government does play a role there; as does the US government here. As I understand it, the Marshall Plan was a deliberate effort to rebuild infrastructure, along with modern factories (restoring the economy and jobs), after pretty complete devastation from World War II. The auto industry is undergoing a similar (but much less significant) situation. I even suspect Tesla could and maybe would help - perhaps by selling "factory plans" and employee training plans, maybe sharing supply chains, software, etc. Tesla already shares patents, processes, and by demonstrating what EV manufacturing looks like. It would not hurt or slow Tesla down while definitely furthering its mission.
"This is a very very serious problem and the livelihoods of so many customers, workers, corporations, stockholders, etc. is in the balance. " There is no serious problem here. EVs are taking over. Smart companies replaces dumb companies. "Tesla can not (and probably does not even want) to meet the total demand for cars or even EVs. " Of course they can if needed. But there are Chinese brands here to help either way. "It needs other manufacturers to fill the gaps." Incorrect. "What has happened to the auto market in China needs to happen in Europe and the USA - lots of companies making low priced EV cars. " They are already priced competitive but the prices will go lower over time. "Perhaps Ford has the best plan by setting up new, independent teams and eventually factories and gradually shifting resources toward those that can become profitable. " No. Tesla have the best plan. Ford is also quite unstable in their execution. "This is why some sort of "Marshall Plan" is needed to rebuild and modernize the auto industry, in the fashion Tesla is modeling." Nonsense. We don't need anything besides what we already got. Stupid companies will get replaced by smarter companies.
Legacy needs to look at their design and management cost structure, as well as, reducing capacity and workforce. 92 to 95% of the car's costs are determined by engineering and cost structure union labor only accounts for 5 to 7% according to Munro and Associates. Tesla understands this, they pay their factory workers well and make a profit. I think Legacy auto really needs to understand their true problem instead of hitting the EASY button, lay off workers and close plants.
Missed one: legacy auto makes more money selling replacement auto parts then they made in profit selling the car originally. Electric cars need less replacement parts.
The main reason the NA auto industry outsources so much of their parts is because their unions demanded higher pay. The companies soon learned that they could buy the outsourced parts cheaper than paying their union members to build in house. Now the UAW has squeezed every cent they can get from Ford, GM, and Stellantis so they are more pressured than ever to only manufacture their highest profit vehicles, can't make money on the cheap variants that used to be their bread and butter. Stellantis will die because of this policy. GM and Ford will do better with their stronger focus on EVs and reducing manufacturing costs. UAW is committing suicide with their wage demands force GM and Ford to start hiring huge numbers of robots to take over their jobs. Ford and GM will be early customers of humanoid robots.
Your point #8 is the main thing legacy manufacturers have going for them in terms of continuing to sell ICE and hybrid vehicles. In the US, consumers are very reluctant to give up doing things the way they've always done them.
I think Tesla needs to stop selling EVs that cost less than $80k in California, in response to California giving other EV competitors a financial advantage.
Exactly! So we don’t need to engage in union- busting, the unions are not responsible for what these legacy auto manufacturers have been doing over many years/decades, and there is nothing that the government can do to save them, and so this notion that Donald Trump is going to somehow be the answer to all of our problems is ridiculous on its face, as no president can control market forces. The government didn’t save the horse and buggy from going under, they didn’t save the jobs of coal miners from going under, they’re not going to save the gas, guzzling, oil burning internal combustion engines from going by way of the horse and the buggy either. So in a market based economy, which is the US economy, market forces will drive innovation, and will drive our future, and when the legacy auto manufacturers finally face the fact that their products are no longer acceptable to the marketplace, then the end of their run will finally be over, and there will be no one thing that we can point to, and simply place the blame on that one thing or entity, as there are many things that has been happening for many many years that has put the final death knell in the coffin of the legacy auto manufacturers, and the sooner they recognize that, the sooner they will start to reinvest in more profitable enterprises. Comphrende. Cheers 🥂
The problem with that thinking is the same as “tax the rich.” Don’t pay the best leaders market rate and you won’t be able to hire good leaders. Tax the rich, and they’ll relocate elsewhere and take their taxes with them.
"As long as the top executives make 7 figure compensation - the workers should ask for more money." The workers asking for more money doesn't solve anything. The salaries of the other employees is a bigger bucket as well.
I honestly think Elon Musk's XAI312x is the safest bet for long term hold, and will survive out of every other altcoins. It will get adopted in US, Ecuador, Asia, starting from Japan, and slowly spread out and gain. This is a winning coin, apart from all the technical greatness.
Sad, but true! Super video Lars, thanks!!
14:21) “inventory problem”? In rural Nova Scotia, overflowing Jeep/Ram dealer advertises “Up to $19,000 discount.” Great - if you want one. Few do😮
Add. 6) The reason they love hybrids, no other car needs so much maintenance
Good day from Goonellabah, NSW, Australia. So true, Lara -
I started in 1972 to 1974 when I received air pollution results from my contract with the EPA NSW governments. I did this because I used to live in Eastern Arterial Rd, Lindfield NSW 2070, Sydney, one of the areas with air pollution. I went on to expose the air pollution across Sydney and Newcastle. I was in pain arse of every EPA of all States across Australia. I used to catch electric and light suburban trains, and when I was in Sydney, I went from Newcastle to Wollongong to Blue Mountain. - 🤗Cheers, Ian Cleland.
What are you talking about?
Thanks. Best video in a long time.
The biggest problem is that the old companies are under pressure to make short term profit and CEO's are paid on that performance. Further; pensions funds and investors are looking for returns quarterly and will penalize the company if they don't deliver. This is why Tesla has done well, it's investors were willing to take the long view.
GM Mary Barra is paid bonuses for release of more EV models, so GM releases several with virtually no volume and lots of cost.
Tesla doesn't care and they tell investors this.
Different mindset and different outcomes.
The problem is that given the truth of what you said, they didn’t start spending tiny amounts of money a decade or more ago to keep pace with Tesla.
They denied the reality, probably because they never once drove a Tesla to understand what people liked about them.
"The biggest problem is that the old companies are under pressure to make short term profit and CEO's are paid on that performance. Further; pensions funds and investors are looking for returns quarterly and will penalize the company if they don't deliver. This is why Tesla has done well, it's investors were willing to take the long view."
The reason Tesla have done well is Elon. He simply doesn't care about stupid shortsighted investors, neither does the board.
In the US, both GM and ford have announced shifts in production to Mexico. It's going to happen bit by bit but the US factories are going to close. IMHO the UAW priced themselves right out of the market.
I think you are kinda right but it will take awhile. Many ppl stubbornly buy American. Patriotism and brand loyalty are significant to some ppl.
I’m a Ford fan, but not an owner due to the repair aggravation.
I bought a 2023 Jeep Compass Sport manufactured in Mexico 6 months ago. So far so good 1:52
Chevy Silverado made in Mexico for ever! NYTIMES reports GM pays UNION autoworkers $10 … a Frunkin’ DAY!
Thanks, Lars for another awesome presentation. #TheHighlander. 😊
An elephant is a mouse built to government specifications. Same thing happened to ICE vehicles. 😢
Number 11: Consumers know in their heart that cars are in a huge transition. So they procrastinate. Not sure yet about EVs, they don't buy ICE cars either because of the uncertainty about their future. So ICE sales stagnate.
Yeah. One would be dumb to buy an ICE car today.
Every time I am convinced that your channel is a real gem on UA-cam. Thank you for your creativity and efforts!🥿🛡🌶
Denial has consequences.
Denali hs consequences as well.
Let's all report the annoying XAI312x spam!
Just a thought here - the dildo of consequences rarely arrives lubricated. Sorry, legacy automakers!
Is that the new game show replacing Truth or Consequences? Ouch!
Most dealers can’t find mechanics. If they do some aren’t good, and they still have to sell . Like you said “ we can will wait “
Uncertainty factor, and no trust because of recalls
Legacy automakers are done.
Not for some time yet; they’ll continue to wander around the wrecked landscape like shocked dinosaurs that somehow managed to survive the 66 million year old asteroid that smashed into the Gulf of Mexico… within a few months or maybe a year or so later they were all dead.
Just like the legacy automakers that can’t meet the new paradigm the changes of the marketplace have created.
this is what happens when they laugh at Elon and Tesla for over a decade
Yeah.
For number two, what you and basically everyone misses is that management bonuses are tied to profits and other metrics that are hurt by losing money on EVs. So effectively all managers at legacy automakers are incentivized to fight EV production. This helps explain awful decisions like shared platform EVs…
Which is why management and the board should have split out an EV division as Ford sort of did, and Volvo actually did.
Neither of those worked either, so maybe there is no way.
@@tommornini2470 There is one way. Go all in on EVs. It would not be easy, but it's the only way.
@@tommornini2470 Really this comes down to iterations and time. Internally, Tesla estimated that any company not deeply committed to making EVs by 2014 was doomed. Because there is a learning process, and Tesla figured three platforms to get it right, legacy taking four years minimum per platform…that would have them actually ready to compete in 2026. But of course legacy automakers didn’t think anyone could make mass market priced EVs and were not worried about losing 100,000 wealthy customers a year worldwide that much, so it was only when Model 3 ramped up in 2018 that alarm bells started going.
But even knowing what needs to happen, management is incentivized to oppose it, and they are pretty stuck now. To compete on price they HAVE to make enormous new factories that use far less labor per car, but their unions would riot, managers would riot, it means writing off old factories that are now considered “assets” on the balance sheets so stockholders would riot, and all of that only pays off if they can design an EV that will sell 500,000+ cars a year. Which none of them have shown any ability to do. Dietz at VW had such a factory in the plans and got his pink slip for it.
They cannot possibly compete making EVs in small numbers from small antiquated factories and still outsourcing a lot of the car parts. But what CEO is going to jump on that sword to try to get a huge new factory now?
Legacy auto also has pressures from declining sales which affects both them and their suppliers, leading to crippling cost increases.
Government policies to reduce emissions are also becoming an increasing burden as the mandated standards are progressively tightened.
Volkswagen, for instance is partly owned by their regional government, so there will be resistance from that quarter to facing up to the required workforce reductions (for them and their suppliers) to become cost competitive.
That said, there is no need to become as vertically integrated as Tesla or BYD, so batteries can definitely be outsourced, for instance it would be insane for each manufacturer to build their own charging network. Tesla have set a high standard there, but I do not expect them to have worldwide domination of that market.
15:15) If VW refits 1 factory EVery 2 years, they will be “done” in just 270 years.
Can we just wait to see what he does instead of judging him on what we all are prognosticating that he will do
who “he”?
Who is he?
This is a very very serious problem and the livelihoods of so many customers, workers, corporations, stockholders, etc. is in the balance. Tesla can not (and probably does not even want) to meet the total demand for cars or even EVs. It needs other manufacturers to fill the gaps. These 10 problems certainly are among the big ones. What has happened to the auto market in China needs to happen in Europe and the USA - lots of companies making low priced EV cars. Perhaps Ford has the best plan by setting up new, independent teams and eventually factories and gradually shifting resources toward those that can become profitable. This is why some sort of "Marshall Plan" is needed to rebuild and modernize the auto industry, in the fashion Tesla is modeling.
Marshal plan was central planning. China is highly decentralized plan. Kinda opposite.
Tesla will be happy to fill the gap.
Robotaxi means fewer cars manufactured per year.
@@tedg1609 Yes, that plan was centralized; not so sure about how decentralized China is as far as auto industry is concerned. The government does play a role there; as does the US government here. As I understand it, the Marshall Plan was a deliberate effort to rebuild infrastructure, along with modern factories (restoring the economy and jobs), after pretty complete devastation from World War II. The auto industry is undergoing a similar (but much less significant) situation.
I even suspect Tesla could and maybe would help - perhaps by selling "factory plans" and employee training plans, maybe sharing supply chains, software, etc. Tesla already shares patents, processes, and by demonstrating what EV manufacturing looks like. It would not hurt or slow Tesla down while definitely furthering its mission.
Too late. Ford STARTED designing a ground-up EV LAST YEAR. Tesla started in 2003… 20 Frunkin’ years😮
"This is a very very serious problem and the livelihoods of so many customers, workers, corporations, stockholders, etc. is in the balance. "
There is no serious problem here. EVs are taking over. Smart companies replaces dumb companies.
"Tesla can not (and probably does not even want) to meet the total demand for cars or even EVs. "
Of course they can if needed. But there are Chinese brands here to help either way.
"It needs other manufacturers to fill the gaps."
Incorrect.
"What has happened to the auto market in China needs to happen in Europe and the USA - lots of companies making low priced EV cars. "
They are already priced competitive but the prices will go lower over time.
"Perhaps Ford has the best plan by setting up new, independent teams and eventually factories and gradually shifting resources toward those that can become profitable. "
No. Tesla have the best plan. Ford is also quite unstable in their execution.
"This is why some sort of "Marshall Plan" is needed to rebuild and modernize the auto industry, in the fashion Tesla is modeling."
Nonsense. We don't need anything besides what we already got. Stupid companies will get replaced by smarter companies.
You mentioned cultural & structural, but the Unions to be specific. New factories means greater mechanization.
Legacy needs to look at their design and management cost structure, as well as, reducing capacity and workforce. 92 to 95% of the car's costs are determined by engineering and cost structure union labor only accounts for 5 to 7% according to Munro and Associates. Tesla understands this, they pay their factory workers well and make a profit. I think Legacy auto really needs to understand their true problem instead of hitting the EASY button, lay off workers and close plants.
Missed one: legacy auto makes more money selling replacement auto parts then they made in profit selling the car originally. Electric cars need less replacement parts.
The main reason the NA auto industry outsources so much of their parts is because their unions demanded higher pay. The companies soon learned that they could buy the outsourced parts cheaper than paying their union members to build in house. Now the UAW has squeezed every cent they can get from Ford, GM, and Stellantis so they are more pressured than ever to only manufacture their highest profit vehicles, can't make money on the cheap variants that used to be their bread and butter. Stellantis will die because of this policy. GM and Ford will do better with their stronger focus on EVs and reducing manufacturing costs. UAW is committing suicide with their wage demands force GM and Ford to start hiring huge numbers of robots to take over their jobs. Ford and GM will be early customers of humanoid robots.
The unions were really stupid asking for a raise when the companies were struggling to survive.
Your point #8 is the main thing legacy manufacturers have going for them in terms of continuing to sell ICE and hybrid vehicles. In the US, consumers are very reluctant to give up doing things the way they've always done them.
Show consumers the money. Walmart switched their supply chain to China - customers bought the lower price products…
EVs will take over. Any short term profits does not matter much.
👏🏻👏🏻👏🏻👏🏻✌🏻
I love the vision behind XAI312x! Your video really captured its potential!
I think Tesla needs to stop selling EVs that cost less than $80k in California, in response to California giving other EV competitors a financial advantage.
As long as the top executives make 7 figure compensation - the workers should ask for more money.
This cult of worshipping CEOs is disgusting.
Exactly! So we don’t need to engage in union- busting, the unions are not responsible for what these legacy auto manufacturers have been doing over many years/decades, and there is nothing that the government can do to save them, and so this notion that Donald Trump is going to somehow be the answer to all of our problems is ridiculous on its face, as no president can control market forces.
The government didn’t save the horse and buggy from going under, they didn’t save the jobs of coal miners from going under, they’re not going to save the gas, guzzling, oil burning internal combustion engines from going by way of the horse and the buggy either.
So in a market based economy, which is the US economy, market forces will drive innovation, and will drive our future, and when the legacy auto manufacturers finally face the fact that their products are no longer acceptable to the marketplace, then the end of their run will finally be over, and there will be no one thing that we can point to, and simply place the blame on that one thing or entity, as there are many things that has been happening for many many years that has put the final death knell in the coffin of the legacy auto manufacturers, and the sooner they recognize that, the sooner they will start to reinvest in more profitable enterprises. Comphrende. Cheers 🥂
The problem with that thinking is the same as “tax the rich.”
Don’t pay the best leaders market rate and you won’t be able to hire good leaders.
Tax the rich, and they’ll relocate elsewhere and take their taxes with them.
"As long as the top executives make 7 figure compensation - the workers should ask for more money."
The workers asking for more money doesn't solve anything. The salaries of the other employees is a bigger bucket as well.
"This cult of worshipping CEOs is disgusting."
Who is worshipping which legacy automaker CEO?
Bought XAI312x after watching your video, super excited! 💰
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Also, there’s a lot of synergy between those different factories, not in a good way.
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