Recent car industry, battery industry and AI industry developments are setting up well for Tesla. UAW just added about $900 or more to the cost of competitors cars (ICE and EV). Battery prices are dropping globally. Ford has delayed $12 billion in EV and battery investment plans. Honda, GM and other traditional carmakers are all doing less with planned moves to EV. This means less EV competition and some reduced demand for EV parts.
There has been a global glut of battery capacity and reduced battery prices in 2024 would help Tesla on its major cost. Nickel battery prices are under $100 per kwh which is down from over $140 per kWh. There are reports of iron LFP batteries at $75 per kWh. Lower battery costs and more available battery supply will mean lowering the cost of a Tesla model Y and model 3 by $1000-2000.
CATL is scaling up new sodium ion batteries. These will be in the $90/kWh from sodium ion and there are new improved versions of LFP batteries. These could be 10-20% better CATL MP3 or other LFP+ batteries.
Ford, GM and Stellantis have tentative agreements with the UAW which needs to have deal ratification by 146,000 union members. Assuming the current settlements are ratified then assembly plant worker will get 25-30% more from now to April of 2028. Less-senior workers and temporary hires will receive much bigger increases. The increases will be phased in at about 5-10% per year steps. Ford estimates that the contract will raise labor costs by $850 to $900 per vehicle. All three automakers said they have taken steps to pare costs and become more efficient, having known for months that they would have to begin raising worker pay. Non-union carmakers will have economic and other pressures to eventually increase wages but there can be a significant lag. There will be some time where the cost structure of Ford, GM and Stellantis is worse than competing car companies.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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I really don’t understand how the big 3 will compete but being a Gen X’r I have never understood how they competed up to this point in time. The big 3 seem like little more than convoluted retirement packages.