Ok, so let us discuss the downsides of the coming storm for a moment.
First, the cold, hard facts. BEVs are going to outcompete all other forms of car drivetrains, this is about as inevitable as the move from horse and carriage to the T-Ford, or the transition from single core chips to multi core chips. BEVs are simply a better technology overall. Of course it is not a perfect tech, all tech has downsides, but it is still better than all the other drivetrains when looking at the two metrics that matter (costs and convenience). Fuel cells and ICE are just too expensive to fuel and maintain, and when BEVs reach price parity and you can get an electric Toyota Corolla clone for the same price, why would any sane person choose the car that costs significantly more to fuel and maintain? BEVs can do it just as well if not better in everything that matters, with a few reasonable tradeoffs.
Now, can anyone drive one today, no, still need some infrastructure. At the countryside, infrastructure is solved since everyone has a driveway and can install a charger for a fraction extra of what the car costs. Apartment dwellers can’t do that though, so charging becomes limited to whatever parking space has a plug. This will be resolved as more and more people get EVs, but we are merely heading that way; we are not there yet.
ICE cars are on the way out. But they are not gone yet and will not be gone for another 15 years, at the very least. Owning and operating an ICE vehicle will become more and more expensive from this point out though. And they will be more inconvenient to own, by 2030 they will be a bit more inconvenient and cost a bit more compared to BEVs, and by 2035 they will be a lot more invonvenient. This is what will trigger people to switch.
What does this mean though? Well, for one thing, GM and Stellantis will go bankrupt by 2025 or so, right after the Japanese brands. Imagine a chip maker saying “Nah we are sticking to single core even though it’s cheaper to go multi core” - that is most of legacy auto today.
This is one of the darkest sides of the transition and will lead to millions of job losses. A lot of new ones created as well, of course, and by 2040 everyone will be better off - but that doesn’t change the fact that a lot of people will be unemployed in the rust belt the coming years, and there is nothing that can be done to prevent this. Worse, a large fraction of them will possess skills no longer relevant for the new age of manufacturing. Who will need expertise in combustion engines, transmissions and gearboxes when those are no longer required?
This does not mean GM and Stellantis will completely kick the bucket - GM in particular could be bailed out - but the ICE parts are about as done as Clinton. And it will be ugly for a while. I see GM and Stellantis falling as inevitable, but Ford might still make it by the skin of their teeth.
Europe does not fare any better of course. As ICE goes down, BEVs will go in more and more demand. EU is already at 40% BEV/PHEV and will hit something like 70% before 2024, and 80% BEV by 2026. German and French auto is largely screwed here, but some brands will be bought up, consolidated and salvaged.
As for China, they are right now doing a race to the bottom steel bath to kill off any weak competition, which is one of the reasons for Tesla lowering prices right now. Of course Tesla has the highest margins in the business, I think the model 3 cost something like $25k to make and they sell it for $35k. So Tesla can still lower their margins. The same cannot be said for other competitors like Nio and XPeng, both in dire straits and facing the very real threat of bankruptcy.
How long will this last, I think we will have the worst behind us in 2026-2027 sometime. But the next few years… Not pretty, and if you live in the Rust belt you should prepare for the coming storm. It is not the end of the world, just a butt ugly shitstorm that will blow over eventually. Brace yourselves.
Can this be avoided? No, the Chinese and Europeans will make sure of it.
