It’s been a crushing week for the EV industry as the bad news that has been brewing for months was laid bare in the quarterly reports. Across the industry, corporate CEO’s are all admitting that demand is unexpectedly slow, orders are down, and suddenly projects are being delayed “indefinitely”.
Volkswagen admitted orders are down a shocking 50% and they are sacking 2,000 jobs in the software division. Ford posted an operating loss of $1.3 billion for the quarter — meaning they are losing $36,000 for every EV they sell. They face a ghastly full year loss of $4.5b, so not surprisingly, they are delaying battery plants, and plans to expand production. All up they are now holding off on $12 billion in investments.
The head of Mercedes-Benz described the market as “a pretty brutal space”. Harald Wilhelm hinted that some manufacturers won’t survive: “I can hardly imagine the current status quo is fully sustainable for everybody,” he said.
Panasonic has slowed EV battery production was reduced by 60% in Japan compared to the same quarter last year. While its US plants were OK, profit forecasts of the whole energy division were down 15% and depended on US subsidies.
News of cars kidnapping drivers, and airport car infernos have added to range anxiety and crushing interest rates to squeeze the EV bubble til it popped.
Toyota’s chairman and former CEO, Akio Toyoda, told reporters at an auto show in Japan this week that waning demand for electric vehicles (EV) is a sign that people are waking up to the reality that EVs aren’t the silver bullet against the supposed ills of carbon emissions they’re often made out to be.
“People are finally seeing reality” about EV technology…
Mr. Toyoda, a long-time skeptic of a full-steam-ahead adoption of EVs, stepped down from his role as CEO of Toyota this year amid criticism that he wasn’t serious enough about pushing the company into a quick adoption of battery-powered cars.
Peak EV has been reached too soon…
The Ford Chief Financial Officer, John Lawler, tried to put it in the best light he could
“The narrative has taken over that EVs aren’t growing; they’re growing,” Lawler said. “It’s just growing at a slower pace than the industry and, quite frankly, we expected.” —Automotive News
Even if EV sales are still growing, it’s far too soon for them to be tailing off. At this early point of the transition — when the EV share of the market is small, and if EV’s are going to take over the world in the next ten years, they should be going gangbusters. The really important narrative, that must surely chill the bones of any EV investor, was that the Chairman of Toyota said: ” People Are ‘Finally’ Waking Up to Reality of Electric Vehicles”. If EV sales growth is already shrinking it suggests the final size of the EV market, barring a miracle discovery, is not very big.
Many of these companies have bet big on EV technology, but they are not turning a profit.
Meanwhile, Volkswagen CFO and COO Arno Antlitz explained on a media call that EV orders in Europe are down to 150,000. That’s 50% lower than last year’s total of 300,000.
Despite the higher volume, EV losses continued to rise in the third quarter, with the company posting an operating loss of $1.3 billion, up from $1.1 billion in the previous quarter and more than double its loss from Q3 2022.
This means that Ford lost around $36,000 for every electric vehicle it sold in the quarter, surpassing its estimated $32,350 loss per EV in the second quarter. For the entire year, the carmaker expects a full-year loss of $4.5 billion for its EV unit. Why is that, though?
Ford admits that people don’t want to pay more for an EV than petrol and diesel cars:
Ford said in its earnings report that US EV buyers were “unwilling to pay premiums for [EVs]over gas or hybrid vehicles, sharply compressing EV prices and profitability.”
Even Tesla (TSLA) CEO Elon Musk, perhaps the biggest EV evangelist in the industry, poured cold water on the EV market and general economic landscape. Musk noted on Tesla’s conference call last Wednesday that the company was delaying construction of its upcoming Gigafactory in Mexico due to concerns about global economic conditions stemming from rising interest rates that make financing cars more expensive for consumers, thus crimping demand.
Ford has halted billions of dollars in investment in EV manufacturing, warning that customers will not pay a premium for these vehicles. The auto giant announced in its third-quarter earnings call on Thursday that it would postpone $12 billion in planned spending on electric vehicle production and pause some major projects, including the construction of a new battery factory in Kentucky.
There’s a “hornet’s nest of anxiety ” about slowing EV demand
Honda and GM have abandoned plans to work together making a cheap EV. A year ago they said they expected “to begin production of “millions” of these affordable EVs by 2027.” Now, it’s none. What’s also shifted is that commentators on EV’s are all openly discussing “the slow down”:
…the decision to scrap plans for more affordable EVs is sure to deepen worries about the future of the EV market in the US and abroad. Tesla’s price cuts, shrinking profit margins, and softening demand has kicked up a hornet’s nest of anxiety about the massive shift to electric vehicles that’s currently underway.
And that anxiety is being reflected in a number of the big player’s moves, including GM’s recent announcements about longer wait times for its upcoming slate of electric trucks and Ford’s move to temporarily cut one of three shifts at the factory that builds the electric F-150 Lightning. –– The Verge
Bad portents: EV’s are taking twice as long to sell
EVs are … lingering longer on dealership lots. Dealers are taking 88 days to sell their entire supply of electrified cars and trucks, compared with 39 days in October 2022, according to Cox. Petrol-powered vehicles, by contrast, are selling in 60 days.
Only one-third of US consumers say the next car or truck they buy is likely to be electric, according to a survey from Yahoo Finance/Ipsos.
Even though sales hit a new record high, the slow-down is upon us:
A record 313,000 electric vehicles were sold in the US in the third quarter, according to data group Cox Automotive. Electric cars climbed to 7.9 per cent of total industry sales in the third quarter, up from 6.1 per cent a year ago, Cox Automotive found.
Even so, the pace of growth is slowing. Year-on-year sales growth for the third quarters of 2021 and 2022 was about 75 per cent; this year the increase was a comparatively cooler 50 per cent, according to Kelley Blue Book, a research company owned by Cox Automotive.
General Motors’ biggest bets on the future — electric vehicles, autonomy and subscription software — are all running into trouble, and now the likelihood of sharply elevated labor costs is raising the stakes even higher.
Electric cars: GM last week abandoned its target to produce 400,000 electric vehicles (EVs) through the first half of 2024, citing slowing demand, continued manufacturing bottlenecks and profitability concerns.
The company had already announced it would delay production of its next-generation electric pickup trucks until 2025 to figure out how to make them more profitably. And it recently paused production of its BrightDrop electric commercial vans until next spring.
Marketing fantasies from the Boom Times of Wind. Who were they kidding? | Siemens Gamesa
By Jo Nova
It’s dire. After suffering a 36% fall in June due to unexpectedly bad maintenance bills, Siemens Energy has lost another 37% on Thursday as it revealed orders and revenue would be even lower than the current subdued expectations. The share that sold for 24 euro in May is now selling for 7.
Things are so bad Olaf Scholz, Chancellor of Germany has even said Siemens Energy is “very important”. Apparently talks are “intensive”, which presumably means the company is on death’s door and the German government is being asked to help save it.
And so we arrive at a point where a company selling products that depend on government subsidies is now asking to be subsidized itself. And the whole green industry depended on government pumped “science” and artificially low interest rates to exist in the first place. Like a pyramid scheme skiing on a two ponzi scams, sooner or later it has to collapse.
Siemens Energy shares in Germany crashed on Thursday after the company warned its wind turbine business is grappling with quality issues and offshore ramp-up challenges. The company said it’s evaluating various measures to strengthen its balance sheet and is discussing state guarantees with the German government. This comes as a financial crisis in offshore wind energy is brewing.
UPDATE: Siemens Energy is a spin off from the larger separate giant Siemens which has a market cap of 100b Euro and 300,000 employees. The smaller energy division has 90,000 employees and a market cap of only 7b Euro now, but it was 30b a few years ago. Siemens still owns 25% of the spin off energy division.
The windmill business has not recovered from the Siemen’s June shock that bigger turbines was not always better, and ominously something was wrong which would cost an obscene amount to fix. It didn’t bode well that the problem was narrowed down to either the rotor, the bearings “or the design”– which covered pretty much everything. By August Siemens Energy announced a jaw dropping annual loss of €4.5 billion.
Confidence is gone. In July the Swedish energy giant Vattenfall stopped work on the offshore wind farm plans off Norfolk. In August the Danish wind firm Ørsted lost 25% after it revealed it may have to write off ” the value of its US portfolio by nearly £2bn.” The share market was so skittish it wiped off nearly £7bn in value that week. Overall the Ørsted share price has dropped by two-thirds from its peak in early 2021.
A week ago Deutsche Bank “slashed its 12-month share price forecast for Danish energy giant Ørsted by 36%, citing supplier delays, lower tax credits and rising rates.” — CNBC
Things haven’t exactly been good for Vestas either:
Despite massive subsidies, bountiful good intentions and Draconian regulations on fossil fuel competitors green energy doesn’t work and Net Zero is pure fantasy.
This is the rotor of the newest, largest offshore Siemens SG 14MW . Look how big these machines are.
It will theoretically end up propped up on a stalk 140 meters high over the ocean waves, or something like that. The blades are 115m long. Imagine fixing it.
The Daily Sceptic has the story of an Australian farmer in Victoria who has gone off-grid to try to be as self sufficient as he can, not out of ideology, but for pragmatic reasons. He has two 3 bedroom homes, with 30 solar panels and a 1kW wind turbine each. For storage they have about 30 German lead acid batteries which at current prices is about $15,000 of batteries each. But even so, each house still has bottled gas stoves, and a 6 kVA petrol generator. The generators are set to come on when the batteries get too low, which often happens in the evenings of autumn, winter and sometimes in spring. (He estimates about 60 – 100 hours each year). Even above all that equipment that needs gas, fuel and maintenance and cost about $160,000 in total to set up, they still have to grow, cut and collect, ouch, 100 kg of wood (220lbs) per week in winter for each house.
He warns that anyone who thinks the nation can run on wind and solar without fossil fuel or nuclear energy is “totally deluded”. And these are farmhouses on the coast in Victoria — so a milder climate — we’re not talking of snow.
The author was a part time specialist medical practitioner until the government tried to force him into a medical experiment (you know the one) that he didn’t want to take part in. Now he is an anonymous peasant farmer with chicken and sheep. So he’s a bright guy, who had a good income, and the kind of man that can rebuild a 70 year old diesel generator that weighs 1.4 tonnes. How exactly does this kind of system translate into a national energy for people living on high density blocks with no trees, a heat pump and a Tesla they need to plug in?
Extrapolating from our renewable energy experience, anyone who thinks that a modern society can function with a power grid that runs on just solar and wind power without fossil fuel or nuclear backup that’s able to immediately provide up to 100% of power needs on cloudy, still days and dark, windless nights, is totally deluded!
And getting grid-scale lithium ion battery storage to provide the sort of supply time that we have on our farm would cost trillions of dollars, deplete the planet’s non-renewable resources to the point of imminent exhaustion and then it would have to be done all over again in 10 years.
Nothing is truly set and forget:
After 20 years the first of our solar panels have started to fail and have been replaced. …
Renewable energy systems should more honestly be called replaceable energy systems. None of the components can be expected to work for more than 25 years and often a much shorter time than that.
Even with nearly 3 tons of lead acid batteries for two homes, they still really only have a one day supply:
In theory we have three to four days of zero input power supply if we were to flatten the batteries, but in practice we don’t let the batteries drop below 70% capacity in order to protect them and make them last as long as possible. So we are limited to about one day of stored capacity.
Both house systems are close to as optimised as we can get them and represent a total investment of around $160,000.
I’m assuming the $160,000 was for both houses together, I hope I’m not reading that wrongly. And of course, here in Australia, the solar panels were almost certainly subsidized, so the true cost is even more.
Does anyone care? 600 million Africans don’t have electricity
They burn wood for power. Forests are razed and no one even notices. As Geoff Hill says, they warm their homes and cook their food the only way they can — by chopping down forests and converting wood to charcoal, a fuel used by the Greeks and Romans. If they had coal fired power or gas plants they wouldn’t need to cut down 400 year old trees.
An area the size of Switzerland is being denuded every year, 70% of Africa’s forests are gone, but it’s as if the rest of the world barely registers it.
Solar panels don’t work under thick cloud, and can blow away in cyclones, hydro plants won’t work in droughts, but fossil fuel plants survive bad weather. Do the Greens really care about the environment, or the poor — does the ABC, CBC or the BBC?
His advice: don’t let them get away with propaganda that keeps people in poverty
When you see a newspaper article claiming that sandstorms and creeping desert are solely down to climate change, write a letter to the editor – even just a few lines – explaining that a loss of vegetation is what allows the sand to blow and the desert to grow. This is not a denial of climate change, but a call for action. We must make sure Africans have the same access to electricity as in developed countries, then there will be no need for charcoal.
This is really a staggering issue of suffering and loss:
Exerpts from Geoff Hill’s paper, NetZeroWatch
In Africa there’s a war against trees. … on a continent where millions have no electricity, the only fuel is wood, usually reduced to charcoal.
According to the World Bank, there are 25 countries that have less than half their people on the grid, and all bar one (Haiti) are in Africa.
Africa’s population has grown four-fold since 1960 and now stands close to 1.4 billion, and an estimated 80% of households rely on wood or charcoal. There are alternatives, including gas, kerosene and, where it’s available, electricity, but all come at a cost. Where trees are not replanted, the land degrades. Forest soil is loose and powdery, and blows in the wind; soon enough, there’s a desert where the jungle once stood.
Africa produces 60% of the world’s charcoal, around 25 million tons a year. Some is exported to Europe, but most is for local use. Yet it’s largely excluded from academic texts, and ignored by those who call for an end to oil, coal or gas.
Most civilizations had a Charcoal Age
Charcoal was a crucial fuel:
It’s the five-to-one rule that makes it work. Five tons of wood can be reduced to one ton of charcoal by burning off the moisture, gas and other elements, leaving a solid block of energy. This allows large amounts of fuel to be moved even where transport is a challenge. The seller can pack a dozen bags on a bicycle, and for buyers, a single bag (8–12 kg) can last a week.
Charcoal is among the most important materials in the story of civilization. It burns hotter than logs, with enough energy to liquify metal. Without it, the Pharaohs would not have had their jewellry and gold coffins, and the Greeks, Romans and Zulus would have fought with clubs instead of spears. It is used to filter drinking water and to keep your fishtank clean. Later came coking or mineral coal, the two often used together, and without them we’d have had no nails, barrels, warships or cannons, and no bronze or iron age. The industrial revolution and, later, the wires that made possible Edison’s capture of electricity and Alexander Graham Bell’s telephone, all relied on the ability to melt the various metals and blend them into alloys.’
Malawi, for example, has 21 million people, and 90% of them rely on wood and charcoal. When the government tries to ban charcoal, people smuggle it anyway.
A staggering 85% of the population is not on the grid, and Malawi has no oil or natural gas. Three quarters get by on $2 per day or less
The new hope is coal. Malawi has proven reserves of more than two million tons, with several mines in operation. A thermal power station is being built at Zalewa, a small town north of Blantyre, and the projected output of 300 MW will almost double the existing supply. Whether any of the cleaner technologies now available in South Africa will be used to limit emissions is not clear.
Tanzania to the north and Zimbabwe in the south have a growing dependence on coal, and the trend looks set to continue, even while Europe and the US seek to scale down their use of fossil fuels. In Malawi, all electricity is controlled by the state, and there have been several price hikes in recent years. Two solar plants produce just 80 MW, with another two on the drawing board, but there is a problem: Malawi has cloud cover an average of 38% of the year, peaking at close on seven days out of ten in January and February.
We can all see what’s coming. How will any tree survive?
In the race for “free” but random energy, or perhaps for bigger status symbols, China set a new record in July with a 16MW wind tower with a rotor diameter of an awesome 853 feet (260m). It’s a bird mincer one quarter of a kilometer across. But already plans are being drawn up for an even bigger one.
Imagine something as tall as New York’s Chrysler building, but spinning. China’s Mingyang Smart Energy has announced plans for a colossal 22-megawatt offshore wind turbine, and standing in its presence will be an unprecedented human experience.
The new turbine proposed for 2025 by MingYang, according to Bloomberg, will have a peak output of 22 MW, and a rotor diameter over 310 m (1,017 ft), corresponding to a swept area of at least 75,477 sq m (812,425 sq ft, 14.1 NFL football fields, 60 olympic swimming pools), minus hub.
Complexity and false hope is eating the crown of Australia’s Net Zero transition — the Snowy 2.0 Pumped Hydro scheme. Things have gone from “debacle” to Soviet Grade Industrial Fiasco. After Florence-the-tunnel-borer got stuck and created a sinkhole, workers spent seven months trying to shore up the ground, playing God against the mountain — pumping in grout, cement and polyurethane foam. But the foam made a gas so toxic the tunnel had to be evacuated. To make things worse the workers were originally told the gas was water vapor but it turned out to be isocyanate. At every point the Snowy Hydro team hid the bad news and issued propaganda, and it’s only taken the ABC a year to tell us the workers predicted the sinkhole, and three months to investigate the safety breach.
Still, that’s better than the NSW regulator who knows all the other safety breaches but won’t even share them, because it’s so bad ” it may affect the contractor’s reputation.” (Which it surely just did anyway.)
This is your low-carbon future. It was supposed to cost $2 billion but the bill is $12 billion. It was supposed to be finished, but it’s barely begun. Florence the tunnel borer was meant to have dug a 15km long hole through the mountain, but it’s only bored through 150 meters. It did about a weeks worth of progress before being stuck for 19 months.
They knew at the start things were doomed, but did it anyway. Workers drilled ahead and hit soft ground only 100m from the opening. Water gushed out, proving there would be mass mud within. But they filled the hole and went ahead anyway. They were supposed to have a slurry system in place, to cope with the mud, but it wasn’t there. In just 8 weeks the borer was predictably bogged — wallowing in up to 4 feet of water. Drowning perhaps in fantasies of building a sacred weather talisman.
Do normal industrial projects, given normal scrutiny, go so wrong, for so long?
ABC Four Corners, By Angus Grigg, Lesley Robinson, Kamin Gock
Workers had warned a sinkhole was likely. They had been telling the contractor the ground was too soft to continue the strategy of inching forward in the hope of hitting harder ground.
“Florence was pulling out triple the amount of soil it should have been,” one worker says. “We warned them it was going to cause a sinkhole, but they did not listen”.
Energy investor Simon Holmes à Court says Snowy has “misled the public on a number of occasions”.
“They got the cost wrong, the ground conditions, the time, the schedule, and I think the way they levelled with the public, they’ve got that wrong too.”
“They’ve given us reason to believe that things are on track. When we later found out that they’re not.”
Who does the NSW state government serve?
Four Corners asked the NSW regulator how many safety breaches there have been at Snowy 2.0.
It refused to provide the numbers, saying it may affect the contractor’s reputation.
Isn’t that the point?
Florence cost $150 million but Bogged-Florence has cost the nation $2 billion (or more). For the last 19 months, count them, nineteen, the borer has barely moved.
Someone should made a children’s book out of this so even preschoolers learn how stupid money can be magnified to do damage far beyond the initial expense.
In the end all this work and money is for one week of electricity and no one said “wait a minute”?
Snowy 2.0 was sold as being key to a low-carbon future — capable of powering 3 million homes for an entire week.
All this, for the same price as three coal plants that could power homes for 50 years…
Project management so bad it’s unprecedented — “the worst so far”
If Snowy 2.0 had been a coal mine endangering workers, would the ABC have waited months to look into it?
“It’s one of the only times where I’ve actually had a proper emergency, where the tunnel had to be evacuated,” [Tony Callinan, NSW branch secretary for the Australian Workers’ Union (AWU).]
“I’ve seen many major projects and unfortunately, this job’s one of the worst … sorry, it is the worst by far.”
Is this the start of the ABC throwing the Snow 2.0 scheme under the bus?
Four Corners’ full investigation Tunnel Vision from 8:30 on ABC TV and ABC iview.
The only thing it has produced for the environment is a sinkhole.
Last week my EPL tendon went snafu. For no reason, my left thumb just stopped doing what it always has. It didn’t hurt, but it didn’t work. It was rather disconcerting. I wondered if it was the first sign of some hideous degenerative nerve condition that would put me in a wheelchair. But after searching with the dreaded Dr Google, I figured out I’d just torn the EPL tendon. Who knew tendons can wear away painlessly and break? Who knew we can diagnose these things without an xray, just with an eyeball? So, I had surgery in hospital yesterday to fix it.
I looked at anatomy drawings and it dawned on me, we can see all the tendons on the back of our hands if we flex them the right way in the right light. And by golly, my right thumb had two tendons, but my left only had one. It was so obvious. Have a look at your own hand. We have two long tendons running down the back of your index finger and pickie* (though these look like one single tendon on our fingers, the two are obvious on our thumbs). Essentially, one tendon pulls on the top knuckle, and one pulls on the one below. These cords run down our hands through tunnels that keep them neat — like rolling over pulleys. They run right over our wrists and connect to muscles attached to the long bones of our forearm. Every time you wiggle your fingers, muscles are tugging from somewhere deep in your forearm, a long way from your hand.
Somehow as babies we all learn which muscle moves each knuckle to get full finger control. No wonder it takes months to learn fine motor skills…
Look at your tendons
The classic test for the torn long thumb tendon, apparently, is to place your hand on the desk and lift up your thumb. So this is me, trying to lift my left thumb. Nothing. No action. No cord under the skin. I’d never paid attention to the ridges that flowed before. But it’s so cool…
When the EPL Tendon is missing, the thumb can’t rise off the desk. | Click to enlarge.
Hardware, now gone.
Tendon breaks can occur with a long delay after a bone injury. I broke my arm two years ago iceskating. As the tendon stretched over the wrist, either the screws or bone scars abraded the tendon. Apparently they can’t be repaired easily after being shredded. Obviously, I needed to take out the metal hardware in my wrist too, lest it degrade the replacement.
On Monday I casually sent an email with my self-diagnosis to the surgeon who fixed my broken wrist two years ago. I must have been very convincing because 30 minutes later I got a phone call from his secretary saying I was booked in for surgery “Thursday”! That was a shock. Pandemonium hit my diary. So, yesterday I had the plate and screws removed, and a tendon graft and an overnight stay. The surgeon took one tendon from the index finger to restore control of the thumb. Apparently we don’t miss the extra extension on the finger as much as we do on the thumb — the ultimate prehensile tool — as I keep explaining to my cat. My arm is in a half cast. I’m typing slowly. I started this post a week ago.
And naturally after the secretary called, I sought second opinions. I was lucky enough, as a writer in the underworld of science, to get free advice from a GP, an orthopedic surgeon and an anesthetist. How rich am I?
For the next 3-6 weeks I’ll be typing less. Posts will be shorter. Sorry. I’ll do my best…
*Corrected. I thought we had two tendons on each finger, but it is not so — the middle two fingers only have one. For some reason we must need slightly more control with two tendons on the index and pinkie finger.
Sometimes we just need to pay attention to what adversaries are doing.
Why would China be so worried about foreign EV’s near airports and holiday resorts of VIPs?
Winston Sterzelspent 14 years in China and has some of the best insights and connections behind the propaganda wall.
….
I am unavoidably distracted by other things for the next two days. Sorry I will not be able to reply to emails or comments. Thanks to the moderators for keeping the ship running.
h/t John Connor, Furiously curious, Kim, and RexAlan
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