The Journal editorial board points out that there are policy moves that can be made to reduce the incentive to produce small cars in Mexico – namely corporate average fuel economy standards and trade deals that help American exports.
It’s true that auto makers have shifted production of small cars to Mexico, where wages are about 85% lower than in the U.S. But small cars aren’t profitable to make in the U.S., though they are necessary to meet the Obama Administration’s increasingly onerous fuel-economy mandates.
Some brave soul should also tell Mr. Trump that auto makers have moved production in Mexico because of its free-trade deals that provide better access to global markets. Mexico has 10 trade deals with 45 countries including the European Union and Brazil, which make up half of the global car market. The U.S. has 14 agreements with a mere 20 countries.
.. The bailout did work, for everyone except the taxpayers, who lost $10.5 billion.
Batteries May Trip ‘Death Spiral’ in $3.4 Trillion Credit Market
Battery technologies starting to disrupt the electricity and automobile industries may also emerge as a trillion-dollar threat to credit markets, according to Fitch Ratings.
A quarter of outstanding global corporate debt, or as much as $3.4 trillion, is linked to the utility- and auto-industry bonds that rely on fossil fuel activities, the ratings agency wrote in a report published Tuesday.
Batteries have the potential to “tip the oil market from growth to contraction earlier than anticipated,” according to Fitch. “The narrative of oil’s decline is well rehearsed — and if it starts to play out there is a risk that capital will act long before” and in the worst case result in an “investor death spiral.”
.. petroleum consumption will peak in 2030 and decline thereafter, the World Energy Council said in a report this month
a16z Podcast: Software is What Distinguishes the Hardware Winners
Will Car companies become like Foxconn — stuck assembling commodity hardware?
.. Smartphone components have become a kind of Lego kit for all kinds of consumer technology. Cameras, sensors, and batteries all get mixed and matched in different permutations to create different gadgets. It might be something that enables your connected home, offers a video capture system for cops, or powers a remote video chat/treat machine for your dog (I know, we all need that). But since practically every component is now available to everyone — and the manufacturing expertise to tie it all together as well — it becomes very hard to distinguish via hardware alone.
Software is the key to breaking from the pack, say Benedict Evans and Steven Sinofsky in this post-2016 CES podcast. What Benedict and Steven saw and learned from this year’s gathering of the consumer electronics industry in this segment of the a16z Podcast.
The Tesla Model 3 Is Still a Rich Person’s Car
Meanwhile, many hundreds of thousands of vehicles is a lot to produce, even for a more established manufacturer than Tesla. The Toyota Camry was the most popular car in America last year, with 429,355 vehicles sold, followed by the Toyota Corolla at 363,332 and the Honda Accord with 355,557. For its part, Tesla delivered 25,202 Model S cars in the U.S. during that same period. To put that figure in context, it’s about the same number of Lexus GX460 full-size SUVs or Fiat 500 hatchbacks that were sold last year. All of which is to say: For the Model S to reach Camry or Accord-levels of popularity, Tesla would have to ramp up its production capacity quickly and substantially to start delivering by its late-2017, as the company has promised. In all likelihood, many Model 3 reservation customers will wait longer than two years for their vehicles.
.. These are not everymen and women; they are elites. Tesla is still the BMW of electric cars.
.. By contrast, the average new car buyer in 2015 put down only 10.4 percent cash, which means that the average down payment was $3,488.