Sunday, December 31, 2017

2017 in Review

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2017, Year Seven of the Modern Age of Electric Cars is about to end, so i took the time to review some of the most important facts this year:


2017 in Words

There are a few words that could describe the general feeling in the Plug-in scene in 2017, those being:  "Tesla Model 3", "When will i get my EV?", "Chinese EVs" and "Tipping Point". 

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Tesla Model 3

If the Chevrolet Bolt was the first of the Second Generation EV's to arrive, GM's slooow production ramp up plan and the general anticipation for the Tesla Model 3 arrival lead to an Osborne effect in many western markets, in the first part of the year, with buyers waiting for the upcoming models, leading to a slowdown in the sales growth of First Generation electric cars.

Once the specs were revealed, and first deliveries of the Model 3 started, back in July, as well as the deliveries roadmap was confirmed, two things happened: Instead of being cannibalized by its younger sibling, the Model S actually improved its sales performance, possibly with many Model 3 would-be buyers opting to buy the larger model, instead of waiting for an eternity a year or more for the new car. The EV market as a whole also benefitted from the Model 3 reveal, not only because of the increased visibility in the media, but also due to the extended delivery dates for new customers, many buyers opted to buy one of the current EVs now, instead of waiting for 2019/2020 for a new Model 3.

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When will i get my EV?

The increased demand for EVs, especially in the second half of the year, caught legacy OEMs off-guard, and there were several cases throughout the year, like the Hyundai Ioniq BEV, VW e-Golf, Renault Zoe...

This has originated months long waiting lists in some of the most popular models, which forced many EV buyers to wait 3, 4 or even 6 months of waiting for their new car, which means sales this year (+/- 1.2 millions) could be even higher, had the current EV makers the production capacity to satisfy demand.

Let's hope the new year and the announced production increases help to solve this problem.

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The 2017 Best Selling EV

"You won't ever buy a Chinese EV? 
Remember Huawei.."

China is Rising - Fourth Chapter

2017 was Year Four for the Chinese EV market, despite a weak start of the year, due to government policies uncertainties, and with foreign makers still neglecting the Chinese EV market, where the local brands owning still 95% of this booming market to themselves, this allowed the Chinese EV makers global share to rise from 31% in 2015 to 45% in 2017, with China rapidly becoming the place to be, not only it is the largest PEV market in the World, but also the fastest growing one, volume-wise.

Even mentioning PEV Share, China is making giant steps, their plug-in share is now at over 2%, an important improvement over the 0.9% of 2015 and the 1.4% of 2016, and already above markets like the USA or Europe, both still around 1%.

If BYD and BAIC are frequently mentioned here, others are also contributing for this unstoppable wave, like SAIC (Roewe is now #9 in the global EV market), and especially Geely, that as an Automotive Group, is outselling Tesla, the BMW Group, GM, VW Group...Basically everyone, their 93k sales this year made it the Third Best Selling PEV OEM in the World in 2017, only behind BYD and the Renault-Nissan Alliance.

And in 2018 Geely will launch two additional trump cards, LEVC and Lynk & Co, their middle ground between the basic Geely brand and their Premium Volvo...



Tesla Growing Pains

2017 was supposed to be a breakthrough year for Tesla, it was going to be the time that the Model 3 was going to arrive and its almost impossible ramp up plan was going to make Tesla stock market imune and self suficient, and rule the world in five years time...

Only, reality is more complicated than that.

If the Model 3 did landed on Schedule, the production ramp up is proving to be much slower than expected, while burning cash at an alarming rate. Fortunately, the Model S/X sales continue to grow, and the stock market seems to like what Elon Musk has reserved for the future, thus keeping Tesla stock in near record levels.

2018 will be the "Make it or Break it" year for Tesla, if the Model 3 quality issues and production ramp up are solved in the Q1, Q2 the latest, of the new year, then Tesla can focus on making as many cars as possible, generating enough revenue to invest on the Model Y, Semi and Roadster II developments, ending the year as a less stock dependent company and with a bright future ahead of it.

If, on the other hand, production issues continue to arise into Q3 2018, investors could start to be nervous and the company stock price could suffer, endangering future models development and make Tesla vulnerable to the Legacy OEMs EV push in 2019/20.

With this on the agenda, being COO / Plant Manager of Tesla must be one of the toughest jobs on Earth.


Tipping point?

In 2025, we will look back at 2017 as the beggining of the second chapter of PEVs, after the 2011 introduction of mass-market ready Plug-ins, 2017 will be remembered as the tipping point where PEVs got out of the tree-hugger/Tekkies 1% niche and into a more mainstream market.

Legacy OEMs have already realized the inevitability of the EV wave and have shown their EV Plans to the World, while everyone in the supply chain is now adapting to the needs of the new technology

While Norway continues to be the poster-child for EV Share (38% Share!) and China the King of Volume (500.000 units in 2017!), others are also making themselves noted, like Iceland (14%) or Sweden (5%), of relevance is also the fact that big markets like Germany (1.5%), Japan (1.02%) or the USA (1.1%) being already north of the important 1% threshold, while others, like Canada (0.8%) or South Korea (0.9%) are bound to reach it soon.

Also of importance is the dissemination of plug-ins into countries not usually associated with EV's, like Malaysia (Over 6.000 units!), Ukraine (Over 1.000 units), New Zealand (1.000 sales), or Mexico (500 units), while PEVs are tipping their toes wheels into South American countries (Colombia, Brazil, Chile, Ecuador, Uruguai...), a region where we see for the first time Chinese OEMs and the others running neck to neck for the local buyers wallets.

6 comments:

  1. Ukraine disabled VAT for 1yr term for EV vehicles (new and used as well). We expect 3-4x grow EV mkt size in 2018.

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  2. I think that electric vehicles are really great and I am thinking of buying one model myself which is coming out in 2019. I think EV’s, are the dawn of future transportation. Many of the models are really great and I think we’ll see a lot of electric car on the roads by 2020 but will check Electric car buyers guide before buying a nice electric car.

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  3. jose thanks for the 2017 review...
    got a question or if u know or hear anything in china about if companies are receiving subsidy payments.Has this returned to normal or is there still a problem?

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    Replies
    1. Sorry, i do not have any input on that.

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