Which Carmakers go Bankrupt First with the Death of ICE Cars?

Which Car Companies Goes Bankrupt or Restructures First?

They will be losing 50-90% of their legacy auto business from 2024-2028. When and how fast will depend upon their region and types of cars they make. Large trucks and SUVs will take 2-5 years longer to replace. China and Europe and transition about 2-4 years faster than in the USA.

Which is already very weak? Many car companies are already financially very weak. Most have huge amounts of debt.

Bad handling of semiconductor shortage and supply chain? These problems are already causing car companies to lose 5-15% of their production for 2020 and 2021 and 2022. These problems could last to 2024 or even longer.

A lot of debt impacted by higher interest rates? We are now entering a recession and period of high interest rates. This will make holding debt or raising debt far harder.

High margin parts business lives on for another decade.

They need to survive a 50-90% hit to ICE business in 2024-2028

Which has the most dependency on China and Europe ICE car sales?

When do prices for used ICE cars collapse? This will expose car companies depending upon leasing of cars. The leasing business depends upon the resale value of cars.

Some other Tesla videos from Nextbigfuture:
The huge wave of iron LFP batteries will enable electric cars to reach 50 million sales in 2025.

A $30,000-35000 Tesla Model 3 will be enabled by higher use of silicon in anodes with iron LFP battereies

Real risks vs FUD for Tesla

Tesla Killers or Tesla Kills Competition

17 thoughts on “Which Carmakers go Bankrupt First with the Death of ICE Cars?”

  1. I dunno Brian,
    Tesla $$$ are doing anything but dropping. Am having a very hard time believing that a model 3 will be $30,000 in 2028.

    • There is a standard range model 3 in China that sells for the equivalent of US$40000 after a $2000 subsidy. The US RWD starting Model is $46000. The price bubble is bursting on used cars. There is a youtube video showing that there are now thousands of used cars stacking up. This and some dealers of new cars are starting to see increased inventory. Combined these effects will start a flattening and return to lower car prices. Especially as chip production gets more sorted.

  2. Well Chrysler could go bankrupt in a world of only ICE’s so I’d nominate them.
    Mitsubishi wouldn’t go bankrupt so much as exit the auto market (long overdue IMHO).

    • Yes, mitsubishi motor is a tiny part of the mitsubishi conglomerate. Chrysler is a piece of Stellantis. Stellantis might go bankrupt before volkswagen.

      • I think the German government will keep VW afloat even at a huge cost and likewise the Italian government and FIAT. Stellantis might break up, but the core Fiat units will carry on with state aid.

      • Why would VW go bankrupt? As far as I can tell they are #2 in EV production behind Tesla (and no, I don’t count Chinese EVs that are not exported).

        For me the #1 and #2 EV replacement options for my Acura are an Audi and a VW.

        • VW does not make profit on their EVs. They lose money on them. If they lose sales of profitable ICE cars in a rapid shift then they will start losing money. Interest rates are going up and they have a lot of debt. If they have to roll over debt then they start paying higher interest rates. VW does have a lot of sales in China. So if they lose the sales to Chinese EVs (not exported but domestic China production for local market), then that mainly leaves Europe. If there is a big ramp in Europe and they go from 18% to 9% of the market and with each EV with no profit this could cause a bankruptcy.

  3. Where’s all that extra electricity going to come from? Along with power lines and recharging stations to get it to the cars?

    • In China it is a lot of coal power but also new solar and wind.

      4000 kwh for each BEV that drives 15000 miles. This needs about 1.5 tons of coal per car or one dedicated solar roof.

      50 million BEV in 2025 would need 75 million tons of coal.
      100 million BEV in 2025 would need 150 million tons of coal per year.
      This would displace 400-800 gallons of oil per car. 10-20 barrels per car assume 15 gallon avg per year.
      50 million would be 750 million barrels per year.
      100 million would be 1.5 billion barrels per year.

    • Plenty of excess power to charge at night right now, giving plenty of time to slowly expand for increased EV usage.

  4. I’m not taking any bets. The market is weird right now.

    My hunch is EVs will continue growing, but a complete replacement of ICEs in 10 years seems nuts nowadays.

    For starters, not enough battery production capacity, besides of the supply chain constraints we are seeing due to covid and the Russian/Ukrainian conflict.

    And really? replacing the hundreds of millions of ICE cars for EVs seems a tad over-optimistic for me, specially for those not living in the first world.

  5. I can’t see how in any sane universe electric cars go from 2% to 50% of auto sales in just six years. That’s just not going to happen. The grid wouldn’t stand the strain, production can’t expand that fast, prices would have to drop through the floor for people to afford them.

    Sixteen years? Maybe. Six? Just is NOT happening.

    I *could* see some of the auto companies going bankrupt in a recession, sure. With the remainder picking up the slack.

    • Electric cars are already at 25% in China and over 10% across the EU. 224k BEV in the first three months of 2022 in EU. Nearly double 2021Q1.
      Gasoline prices doubled. Iron LFP battery factories have received over $100 billion in investment in China.

      Ballpark about 4000 kwh for a year of driving for 15000 miles. This is about 1.5 tons of coal. Instead of 400-1000 gallons of gasoline.
      50 million cars in China would use 75 million tons of coal. Currently about 6 million EVs and EV buses etc.. in China using about 9 million tons of coal per year.

      5 years to buy and own new ICE car and drive it. $45k new, $20k to drive for fuel + oil changes and maintenance and depreciation $30k.
      EV $50k new, $4k to drive, $5k maintenance, depreciation for tesla and some others $10k.
      $20k for EV vs $50k for ICE.

      An online calculator lets you compare states, car models etc… driving habits etc…
      I think it is incorrect on the depreciation of Tesla vehicles which have not depreciated as much.

  6. 20% of EV car owners went back to ICE’s. And, ICE’s are not constrained by the critical mineral shortages like EVs are. Of course, with the 70% reduction in global Neon gas due to Russian sanctions – we will see industrial lasers going offline. And, that has the potential to crash SemiC production globally. And, without those chips, no cars will be built.

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