have<\/em>\u00a0to say that,” says Lindland. “Governments are mandating that they have to build EVs even though demand hasn’t grown significantly.”<\/p>\nWhat’s more, Volkswagen\u00a0is trying to turn the page on its emissions cheating scandal. “It’s penance for past sins on Dieselgate,” says Merrill Lynch’s Murphy.<\/p>\n
But there is also a concern\u00a0among GM’s Cadillac and other luxury brands that they are losing out to what analyst Lindland calls “Generation App” \u2014\u00a0a rising group of worldly, earth-conscious buyers weaned on iPhones who will ultimately aspire to electric chariots.<\/p>\n
Adds Murphy: “You\u2019re looking at a marketing game to attract customers even if they don\u2019t yet buy EVs. There’s\u00a0concern among luxury-makers that Tesla may be taking market share from them.”<\/p>\n
A big reason Tesla struggles is because \u2014\u00a0despite its promise to build a $35,000\u00a0Model 3 \u2014\u00a0the high cost of batteries destroys profit margins below $50,000. Merrill Lynch\u00a0estimates EVs have to be in the $55,000-$60,000-plus price\u00a0range to drive reasonable profit levels.<\/p>\n
“It’s tough\u00a0to understand why any automaker would significantly push econoboxes in the $30,000\u00a0range unless they need to meet regulatory requirements,” says Murphy.<\/p>\n
Makers of those $30,000 econoboxes say, however, that there is legal risk in addition to regulatory. Specifically, they fear that governments will target Big Auto with lawsuits as they did Big Tobacco,\u00a0suing them for such environmental damages as hurricanes and\u00a0fires allegedly\u00a0caused by carbon dioxide\u00a0emissions.<\/p>\n
“We consider that to be a real business\u00a0risk, so we’re working very hard to be \u2014\u00a0not\u00a0part of the problem \u2014\u00a0but to be part\u00a0of the solution,” Honda Motor Co.’s vice president\u00a0of\u00a0environmental vehicles, Steve Center, told Autoline. Honda makes the $23,000\u00a0Insight hybrid and plans to electrify most of its lineup by 2030.<\/p>\n
Don’t discount the personal activism of CEOs in wanting to be part of that solution, too. Tesla CEO Elon Musk is an outspoken green activist who has made saving the planet part of his company’s mission statement. His activism is echoed by two new EV partners\u00a0\u2014\u00a0Ford Chairman Bill Ford Jr. and Rivian founder R.J. Scaringe.<\/p>\n
Scaringe and Ford see eye-to-eye on green activism. \u201cWe believe the world needs to electrify,\u201d says\u00a0Scaringe. Happily, Rivian also meets Merrill Lynch’s investment threshold for $60,000-plus vehicles. Rivian is\u00a0also attracting investment because it holds a\u00a0key to perhaps the biggest door Tesla\u00a0has unlocked: autonomy.<\/p>\n
“The reason that Tesla’s valuation has been so high is because of its potential,” says analyst Lindland. “Investors see that potential in electrification\u00a0and in self-driving cars.”<\/p>\n
And sure enough, markets reacted positively to its stock sale plan\u00a0this week despite the dilution in overall shares. Musk has been as much a missionary for robot cars as for battery power.<\/p>\n
Rivian’s trucks \u2014\u00a0with their “skateboard” battery construction opening enormous storage space \u2014\u00a0have\u00a0attracted Amazon investment for its autonomous delivery potential. GM has made Cadillac its lead EV brand, but close behind is its investment in Cruise Automation,\u00a0a West Coast-based ride-sharing competitor to Waymo and Uber that the General intends to staff with driverless Bolt EVs.<\/p>\n
These ride-sharing services \u2014\u00a0including one unveiled by Tesla\u00a0last month \u2014\u00a0all test exclusively with EVs. Merrill’s Murphy\u00a0has been bearish<\/a>\u00a0on Tesla’s profitability:\u00a0“But\u00a0in reality Tesla has changed the game, and everyone is chasing Elon.”<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"Jaguar I-Pace sales \u2013 the first direct Tesla-fighter from a European lux-maker \u2013 have been disappointing. Aimed at the Tesla Model S\/X, its costs about $86,000. Tesla Inc. reported a bigger-than-expected $702 million loss in the first three months of the year, pushing the electric car-maker back to the capital markets for as much as […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/23749"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=23749"}],"version-history":[{"count":0,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/23749\/revisions"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=23749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=23749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=23749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Jaguar](\"https:\/\/www.gannett-cdn.com\/presto\/2019\/04\/29\/PDTN\/314ecc23-555d-4c2d-83f3-aff15babfaee-TDNBrd_DETROIT_10-24-2018_TDNXX_1_A006__2018_10_23_IMG_Jag_Fr3_4_1_1_S92763T5_L63646744_IMG_Jag_Fr3_4_1_1_S92763T5.jpg?width=540&height=&fit=bounds&auto=webp\")
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