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The underlying issue here is that European car manufacturers are in deep financial trouble. Employees are getting more expensive. Cars are getting more complica
by gizmo 3y ago
The underlying issue here is that European car manufacturers are in deep financial trouble. Employees are getting more expensive. Cars are getting more complicated and contain more chips. This increases R&D expenses. Margins are getting squeezed. Asian competitors are on their tails. Lexus and Mazda are attacking the lower end of luxury cars and Chinese manufacturers are the only ones that can produce economy (electric) cars at a profit.
European carmakers are looking into subscriptions, knowing it will anger their most loyal customers, because their main business is struggling. They look at sofware companies with envy. To put it in perspective, Volkswagen, Europe's largest carmaker with 675,000 employees has the same market cap as Crowdstrike and Snowflake.
- sgt101 3y agoI think that the problem is that cars are getting simpler and contain less precision engineering. Making a ICE drive chain is very very difficult, there is a long supply chain required. This moat is drying out very very fast.
- Tanoc 3y agoNo. Definitely not. The drivetrains swap has made them simpler in that regard. But ever changing and increasing safety standards mean that a single bodystyle costs hundredss of millions of dollars to develop. Mostly caused by SUVs and CUVs that make the physics of an impact much harsher. The widespread popularity of the Jeep Cherokee and Ford Explorer in the early 1990s have been detrimental to so many facets of the modern world...
- gizmo 3y agoCars are getting way more complicated. Just look at all the tech inside of modern headlights and side mirrors. Don't you think you need a complicated supply chain for all the sensors in modern cars? ICE drive trains aren't impossibly complicated. It's 200 year old technology that has been near perfected. Modern engines last 200k miles no sweat and require little more than an oil change. BEV is simpler in some ways but more complex in other ways. BEVs are much heavier and that means you need more structural components, heavier suspension, more complex crumple zone, etc. Electric cars also can't be repaired as easily. BEV aren't simpler than ICE cars, it's just a different set of costs/benefits.