EP 7: EVS - TESLA & FORD STRUGGLE, WHILE HONDA AND TOYOTA EXPAND NORTH AMERICAN INVESTMENTS
Strap in for a rollercoaster ride through the electric vehicle market as we unpack the highs and lows facing industry titans like Tesla and Ford. Witness the strange paradox where EV sales dip and automakers cut costs, yet the horizon glows with promise as Asian manufacturers like Honda and Toyota rev up their investment engines in North America. Explore the complexities of Hertz's EV fleet sell-offs and the bold steps forward in battery innovation that could redefine energy storage and electric mobility.
Cruise with us to the renewable energy front in Germany, where sodium-sulfur batteries are emerging as game-changers, and zoom over to Texas where ERCOT's grid load forecasts signal a power-hungry future. As we dissect these electrifying developments, you'll gain a deeper understanding of the rapidly shifting landscape of the EV industry and what it means for consumers, companies, and the global push toward green energy. Tune in and power up your knowledge on the latest energy trends that are shaping our world.
Transcript:
Speaker 1: 0:00
Hi, this is your energy video for the last week of April 2024. Well, there's so much contradictory news coming out of the EV space these days. It'll make your head spin. Tesla's decline in sales and recently announced layoffs, combined with Ford's continuing losses and Hertz's decision to sell off another 10,000 rental EVs, would have you think that maybe EVs have hit their high watermark. Yet at the same time, a number of Asian car companies are announcing new battery and EV investments in North America, and battery tech keeps getting better. Let's jump in and look at some of those announcements, and then we'll talk about taxes.
Speaker 1: 0:35
This past week, tesla announced it would lay off nearly 700 workers at its Nevada plant as part of its plan to cut 10% of its total workforce. Meanwhile, it announced it was slashing EV prices in a bid to boost sales, which fell significantly. Q4 2023 saw deliveries of 387,000 cars, 20% lower than Q4 of last year. Then Ford reported steep losses on its EVs, to the tune of $1.3 billion per quarter. Sales were down 10% as well, but revenue was off by 84%. Ouch, ford is working to cut costs, but has a long way to go as it plans lower-cost EVs in the future, and CEO Jim Farley now cautions that EVs might not see price parity with gas-powered vehicles until 2030. Then there's Hertz. During its earning call, it noted that it would sell off yet another 10,000 EVs, adding to the 20,000 it was already working to dispose of, essentially cutting its existing electric fleet by 50%, while recognizing $195 million of EV-related depreciation charges. It's a far cry from late 2021, when Hertz had trumpeted plans to buy 100,000 Teslas and as many as 65,000 Polestars, while also looking to GM for significant future volumes. Repair costs and low resale values have clearly put the hurt on Hertz and it would appear the future of EVs is pretty grim, but not so fast.
Speaker 1: 2:01
Other announcements push in the other direction so fast. Other announcements push in the other direction. Last week, honda announced plans to develop an $11 billion EV manufacturing capability in Ontario, involving JV investments from South Korea's POSCO and Japan's Asahi Kasai. Honda's stake would include a standalone battery facility and separate EV plant, starting in 2028 and capable of churning out 240,000 EVs annually. Associated supply chain investments would involve Posco's Cathode Active Material plant and Asahi Kahaya Separator plant. Meanwhile, toyota is putting down an additional $1.5 billion into its Indiana EV plant that will enable it to build a three-row electric SUV, as well as a battery-packed assembly line that will use batteries made in North Carolina from its facility there. The Indiana investment now stands at $8 billion, while North Carolina's $13.9 billion.
Speaker 1: 2:56
In separate battery-related news, japan's NDK insulators received an order for over 230 megawatt-hours of sodium sulfur batteries from BASF's stationary storage business unit. These will be used in a large German hydrogen plant being developed in northern Germany by HH2E to smooth out renewable energy supplies and run electrolyzers at higher capacity factors. Sodium-sulfur batteries are relatively new on the storage scene at large scale, but given their high capacity and long duration discharge, they're good for shifting renewable energy over somewhat longer periods than lithium-ion batteries typically do. Ngk says it has installed sodium sulfur batteries in over 250 locations to date.
Speaker 1: 3:38
And finally, texas low growth forecasts just jumped enormously, increasing 40,000 megawatts from last year. Part of that is simply lots of new load from factories, data centers and the oil patch that's all coming to Texas. But another artifact is simply that ERCOT, the grid operator, has changed the way that it forecasts future demand. Previously, ercot could not factor in demand that was not financially committed, but 2023 legislation now obligates ERCOT to consider future loads that transmission operators have identified. Total potential load by 2030 could now be as high as 152,000 megawatts. Putting that in perspective, ercot's all-time peak demand record from last August was just over 85,000 megawatts, set on August 10, 2023. Well, that's all for this week from Maui. Thanks for watching and we'll see you again next week.