Lots of speculation as to who will go bankrupt first. Toyota $186billion in debt, Ford $139billion in debt. VW $192billion in debt, Daimler $151billion in debt,BMW $114billion in debt, Nissan has 2.3 trillion yen of outstanding debt & S&P have just slashed it’s credit rating to junk.
Mazda has already been to three of the biggest Japanese banks for bailouts in the last few years after it’s sales in north America slowed, Some of these legacy automakers have more debt than countries. 
Could the German government even afford to bail out their automakers as they’re heavily invested in them.
Toyota & VW couldn’t make enough vehicles to pay off the interest let alone the debt. Ford Europe laying off thousands of workers, GM offers buyouts to most of its U.S. workers amid shift to electric vehicles.
We’re supposed to believe that all of these established manufacturers have all just been producing cars for a laugh at a massive loss.
As opposed to running for the exit of the EV utopia and allowing China to run our economies like it’s running our governments.
Most legacy automakers make pitiful profits on electric cars. With the cheap manufacturing costs in China & the USA inflation reduction act + the $7500 grant on USA made EV’s the future ain’t looking too bright for European made EV’s for export. The only places they will make any profit is in China or the USA unless the EU start coming up with the same sort of grants/subsidies.
Quite a few of the major car manufacturers are building new car/battery plants in the USA to get a slice of that action because they don’t stand a chance of competing on price otherwise.
It will interesting to see if the U.S government currently under democratic leadership will ‘let’ Ford and GM go bankrupt, being that they are large democratic party donors. The government had already bailed Ford out for the second time in 2019.
There should be no bail outs. Especially for the banks. Otherwise bad behaviour and poor management decisions within these companies will continue, i.e banks will make poor decisions knowing that the government will bail them out if their risky investments did not work out…as was the case for Silicon Valley Bank and Signature Bank of whom have now gone under.
As for the other legacy auto makers potentially going bankrupt - GOOD. They were slow to make the transition to EV’s, especially Toyota, and now they will pay the price.
I have spent a number of years running teams within legacy automakers, so have a little insight. At a basic level, borrowing money to expand the business makes perfect sense providing the profit you can make from that expansion exceeds the interest cost of the borrowed money. At the moment, automakers (including trucks) are all having to develop alternative technologies to fossil fuel (be that electric, hydrogen, synthetic fuels etc.) - legislation in 2035 means it is necessary to do so, and this is very expensive to do - one reason for increasing levels of borrowing.
Saying all that though, my time in the automakers was eye-opening in how hard it is to make vehicles profitably.
A car is about 2,000 individual parts, all of which are expected to work perfectly in cold, heat, humidity, salt, and the abusive hands of mechanically un-sympathetic drivers. They are expected to do this for the whole length of the warranty period (3-7 years, typically) lest the automaker have expensive repairs to do.
To achieve all this, very rigorous design, engineering, specification and testing is done. The durability/longevity testing processes are hugely time, and resource intensive as you would expect.
So, this all means that for a new vehicle with very little content carried over from a previous car, the development programme will cost well over €1Bn and take 5 years. After that 5 years, you then try to sell the vehicles and recoup that €1Bn+ engineering outlay through the profit made on each individual vehicle. If you expect to sell 500,000 units over the model’s on-sale life, then you would add €2,000+ to each vehicle’s cost price.
What happens if you are wrong on that 500,000 units though? What if the desires of your customers, or market preferences change between during the 5 year development of that programme? What if you only sell 300,000 units in the end - you have now lost an additional €1,333 per vehicle, or €400m in total.
James Dyson supposedly spent €500m to get his car programme very close to production, only to find market conditions and customer desires have changed and his car can no longer be sold profitably at the price level the market will pay.
Taking a not uncommon but impactful scenario as an example, what happens if in year 3 of your 5 year programme, governments legislate a substantive change that means your in-flight programme is now completely sunk - i.e. developing a new diesel engine, or a vehicle platform that does not have space engineered in for a large battery pack? Much of that €1Bn then gets completely written off.
All of the above is heavily simplified of course, and in reality automakers are better at forecasting trends and changes, but it all made me think - why would you want to be an automaker?
Not quite sure why I wrote all that, but perhaps it is interesting to some 
Martin.
MJJ_ZX6RR:
Not quite sure why I wrote all that, but perhaps it is interesting to someMartin.
Good stuff.
MJJ_ZX6RR:
I have spent a number of years running teams within legacy automakers, so have a little insight. At a basic level, borrowing money to expand the business makes perfect sense providing the profit you can make from that expansion exceeds the interest cost of the borrowed money. At the moment, automakers (including trucks) are all having to develop alternative technologies to fossil fuel (be that electric, hydrogen, synthetic fuels etc.) - legislation in 2035 means it is necessary to do so, and this is very expensive to do - one reason for increasing levels of borrowing.Saying all that though, my time in the automakers was eye-opening in how hard it is to make vehicles profitably.
A car is about 2,000 individual parts, all of which are expected to work perfectly in cold, heat, humidity, salt, and the abusive hands of mechanically un-sympathetic drivers. They are expected to do this for the whole length of the warranty period (3-7 years, typically) lest the automaker have expensive repairs to do.
To achieve all this, very rigorous design, engineering, specification and testing is done. The durability/longevity testing processes are hugely time, and resource intensive as you would expect.
So, this all means that for a new vehicle with very little content carried over from a previous car, the development programme will cost well over €1Bn and take 5 years. After that 5 years, you then try to sell the vehicles and recoup that €1Bn+ engineering outlay through the profit made on each individual vehicle. If you expect to sell 500,000 units over the model’s on-sale life, then you would add €2,000+ to each vehicle’s cost price.
What happens if you are wrong on that 500,000 units though? What if the desires of your customers, or market preferences change between during the 5 year development of that programme? What if you only sell 300,000 units in the end - you have now lost an additional €1,333 per vehicle, or €400m in total.
James Dyson supposedly spent €500m to get his car programme very close to production, only to find market conditions and customer desires have changed and his car can no longer be sold profitably at the price level the market will pay.
Taking a not uncommon but impactful scenario as an example, what happens if in year 3 of your 5 year programme, governments legislate a substantive change that means your in-flight programme is now completely sunk - i.e. developing a new diesel engine, or a vehicle platform that does not have space engineered in for a large battery pack? Much of that €1Bn then gets completely written off.
All of the above is heavily simplified of course, and in reality automakers are better at forecasting trends and changes, but it all made me think - why would you want to be an automaker?
Not quite sure why I wrote all that, but perhaps it is interesting to some
Martin.
What made you leave the automaker industry?
Sent from my SM-A135F using Tapatalk
MJJ_ZX6RR:
I have spent a number of years running teams within legacy automakers, so have a little insight. At a basic level, borrowing money to expand the business makes perfect sense providing the profit you can make from that expansion exceeds the interest cost of the borrowed money. At the moment, automakers (including trucks) are all having to develop alternative technologies to fossil fuel (be that electric, hydrogen, synthetic fuels etc.) - legislation in 2035 means it is necessary to do so, and this is very expensive to do - one reason for increasing levels of borrowing.Saying all that though, my time in the automakers was eye-opening in how hard it is to make vehicles profitably.
A car is about 2,000 individual parts, all of which are expected to work perfectly in cold, heat, humidity, salt, and the abusive hands of mechanically un-sympathetic drivers. They are expected to do this for the whole length of the warranty period (3-7 years, typically) lest the automaker have expensive repairs to do.
To achieve all this, very rigorous design, engineering, specification and testing is done. The durability/longevity testing processes are hugely time, and resource intensive as you would expect.
So, this all means that for a new vehicle with very little content carried over from a previous car, the development programme will cost well over €1Bn and take 5 years. After that 5 years, you then try to sell the vehicles and recoup that €1Bn+ engineering outlay through the profit made on each individual vehicle. If you expect to sell 500,000 units over the model’s on-sale life, then you would add €2,000+ to each vehicle’s cost price.
What happens if you are wrong on that 500,000 units though? What if the desires of your customers, or market preferences change between during the 5 year development of that programme? What if you only sell 300,000 units in the end - you have now lost an additional €1,333 per vehicle, or €400m in total.
James Dyson supposedly spent €500m to get his car programme very close to production, only to find market conditions and customer desires have changed and his car can no longer be sold profitably at the price level the market will pay.
Taking a not uncommon but impactful scenario as an example, what happens if in year 3 of your 5 year programme, governments legislate a substantive change that means your in-flight programme is now completely sunk - i.e. developing a new diesel engine, or a vehicle platform that does not have space engineered in for a large battery pack? Much of that €1Bn then gets completely written off.
All of the above is heavily simplified of course, and in reality automakers are better at forecasting trends and changes, but it all made me think - why would you want to be an automaker?
Not quite sure why I wrote all that, but perhaps it is interesting to some
Martin.
Great post & insight. I was following the Dyson EV car with interest at the time & thought that thing is a behemoth when the plans were revealed. He spent $90million on a solid state start up company alone, Dyson said the price of it would have to start at £150,000 just to break even Dyson’s losses must have been huge for that failed project. People are screaming out for a small/medium affordable electric car but they seem to be getting bigger.
VW have just revealed their “affordable” ev called the VW id2 which will start at €25,000 and is about the size of a VW Polo, Production will start in 2025/6. The same car they build in China in a joint venture with a Chinese automaker starts at $10,600 .
thisismoney.co.uk/money/ele … -2026.html
MJJ_ZX6RR:
I have spent a number of years running teams within legacy automakers, so have a little insight. At a basic level, borrowing money to expand the business makes perfect sense providing the profit you can make from that expansion exceeds the interest cost of the borrowed money. At the moment, automakers (including trucks) are all having to develop alternative technologies to fossil fuel (be that electric, hydrogen, synthetic fuels etc.) - legislation in 2035 means it is necessary to do so, and this is very expensive to do - one reason for increasing levels of borrowing.Saying all that though, my time in the automakers was eye-opening in how hard it is to make vehicles profitably.
A car is about 2,000 individual parts, all of which are expected to work perfectly in cold, heat, humidity, salt, and the abusive hands of mechanically un-sympathetic drivers. They are expected to do this for the whole length of the warranty period (3-7 years, typically) lest the automaker have expensive repairs to do.
To achieve all this, very rigorous design, engineering, specification and testing is done. The durability/longevity testing processes are hugely time, and resource intensive as you would expect.
So, this all means that for a new vehicle with very little content carried over from a previous car, the development programme will cost well over €1Bn and take 5 years. After that 5 years, you then try to sell the vehicles and recoup that €1Bn+ engineering outlay through the profit made on each individual vehicle. If you expect to sell 500,000 units over the model’s on-sale life, then you would add €2,000+ to each vehicle’s cost price.
What happens if you are wrong on that 500,000 units though? What if the desires of your customers, or market preferences change between during the 5 year development of that programme? What if you only sell 300,000 units in the end - you have now lost an additional €1,333 per vehicle, or €400m in total.
James Dyson supposedly spent €500m to get his car programme very close to production, only to find market conditions and customer desires have changed and his car can no longer be sold profitably at the price level the market will pay.
Taking a not uncommon but impactful scenario as an example, what happens if in year 3 of your 5 year programme, governments legislate a substantive change that means your in-flight programme is now completely sunk - i.e. developing a new diesel engine, or a vehicle platform that does not have space engineered in for a large battery pack? Much of that €1Bn then gets completely written off.
All of the above is heavily simplified of course, and in reality automakers are better at forecasting trends and changes, but it all made me think - why would you want to be an automaker?
Not quite sure why I wrote all that, but perhaps it is interesting to some
Martin.
It’s not exactly Rocket science and expense to make existing ICE tech run on hydrogen.
Huge price war going on in China as it is tightening emission rules on the 1st July, VW amongst 40 other brands including Honda & Toyota JV’s are offering $537million in cash subsidies for car purchases before the deadline todaynewspost.com/auto-news/vw- … ule-looms/
Carryfast:
It’s not exactly Rocket science and expense to make existing ICE tech run on hydrogen.
It pretty much is rocket science to supply and store hydrogen.
Franglais:
Carryfast:
It’s not exactly Rocket science and expense to make existing ICE tech run on hydrogen.It pretty much is rocket science to supply and store hydrogen.
No it really really isn’t.No involvement of NASA in the filling up of this real or implied and that is definitely running on Hydrogen.
Germany invented the horseless carriage now hopefully they will save it from this Chinese inspired and run control freak coup.
Carryfast:
Franglais:
Carryfast:
It’s not exactly Rocket science and expense to make existing ICE tech run on hydrogen.It pretty much is rocket science to supply and store hydrogen.
No it really really isn’t.No involvement of NASA in the filling up of this real or implied and that is definitely running on Hydrogen.
Germany invented the horseless carriage now hopefully they will save it from this Chinese inspired and run control freak coup.
Read wot I rote.
Franglais:
Carryfast:
Franglais:
Carryfast:
It’s not exactly Rocket science and expense to make existing ICE tech run on hydrogen.It pretty much is rocket science to supply and store hydrogen.
No it really really isn’t.No involvement of NASA in the filling up of this real or implied and that is definitely running on Hydrogen.
Germany invented the horseless carriage now hopefully they will save it from this Chinese inspired and run control freak coup.Read wot I rote.
I read wot you rote and it clearly isn’t difficult to provide hydrogen supply facilities for car use.Bearing in mind that there’s no problem with obtaining and the supply of hydrogen for existing industrial uses.
Its equally clearly a fossil fuel type ban being falsely dressed up as an ICE ban by the ICE haters.The truth is petrol and diesel are just convenient fuels for internal combustion engines.The swap to hydrogen could be done far easier and in a more sales and customer friendly way than trying to force everyone into a whining overpriced and worthless EV.
But smart metered card controlled electric at the point of sale obviously fits the control freak agenda of those who want to remove the freedom of travel which we’ve taken for granted so far
Carryfast:
… it clearly isn’t difficult to provide hydrogen supply facilities for car use.
This is very true.
I’m a retained DGSA and have provided DG transport advice by Road and Sea for the past three years for a company who does exactly this.
I’ve been involved with this project since just after they designed their prototype equipment, an MEGC of approx 15,000L water capacity.
Not for hydrogen, but an Example MEGC from my pic library:
Carryfast:
Bearing in mind that there’s no problem with obtaining and the supply of hydrogen for existing industrial uses.
Also true, the company I’m consulting for actually make their own hydrogen from groundwater extracted by permission (a water extraction licence) granted by the Environment Agency (EA.) They even have EA permission to dump the by-product (oxygen) straight into the atmosphere, so there are no by-product disposal costs.
dieseldave:
Carryfast:
… it clearly isn’t difficult to provide hydrogen supply facilities for car use.This is very true.
I’m a retained DGSA and have provided DG transport advice by Road and Sea for the past three years for a company who does exactly this.
I’ve been involved with this project since just after they designed their prototype equipment, an MEGC of approx 15,000L water capacity.Not for hydrogen, but an Example MEGC from my pic library:
0Carryfast:
Bearing in mind that there’s no problem with obtaining and the supply of hydrogen for existing industrial uses.Also true, the company I’m consulting for actually make their own hydrogen from groundwater extracted by permission (a water extraction licence) granted by the Environment Agency (EA.) They even have EA permission to dump the by-product (oxygen) straight into the atmosphere, so there are no by-product disposal costs.
I think that whole sector is going to get very interesting to investors as the EV bandwagon inevitably gets derailed by the comparative inconveniences in use and the cost benefit equation figures not adding up.
The German car makers are realising that if push comes to shove hydrogen fuelled ICE will prove to be just as attractive v battery EV’s as petrol fuelled ICE v EV was at the dawn of the motoring age.
Can’t believe that JLR is allowing itself to be wrong footed by the Germans in that regard.
As opposed to JCB keeping its options open.
When even the switch from petrol ICE to Hydrogen ICE will be enough of a shock.
Let alone the total change in vehicle technology and resulting loss of manufacturing and maintenance skills, for remaining strategically essential ICE powered defence and construction type equipment and total dependence on the mined minerals required to produce batteries.
In addition to the logistical nightmare of battery recharging times and high capacity charging infrastructure.
As opposed to just an ignition system and set of spark plugs and hydrogen fuel injection system fitted to existing ICE technology and a few tweaks and upgrades to the existing Hydrogen production and distribution infrastructure.Some pundits are already suggesting that the EV bandwagon is the Betamax of this change.
Continuing use of a whip is unlikely to reinvigorate a failing equine quadruped, but,
Many rockets, designed by scientists and engineers, run on hydrogen. There is much scientific input into the production, transport and storage of the fuel, hydrogen. This is surely “rocket science”.
ergo
Franglais:
It pretty much is rocket science to supply and store hydrogen.
QED
Franglais:
Continuing use of a whip is unlikely to reinvigorate a failing equine quadruped, but,Many rockets, designed by scientists and engineers, run on hydrogen. There is much scientific input into the production, transport and storage of the fuel, hydrogen. This is surely “rocket science”.
ergoFranglais:
It pretty much is rocket science to supply and store hydrogen.QED
Hydrogen is just a convenient option to fuel rocket motors just like it can fuel internal combustion engines nothing more nothing less.
The history of rocket propulsion is more related to solid fuels from gunpowder to the stuff that provided the primary rocket propulsion system and which blew up the Challenger space shuttle.Not the relatively rarer Hydrogen and Lox combination.
By your logic artillery propellants are also rocket science.
Which leaves the question why would any logical objective view think that having to add the costs and environmental damage of mining and transport of all the materials required and all the resources employed in the manufacture of batteries, is the superior option to just using hydrogen to fuel existing proven ICE technology.
Other than an irrational and laughably biased view against internal combustion engines.
" Some pundits are already suggesting that the EV bandwagon is the Betamax of this change." LOL Really!!! renewablesnow.com/news/europes- … 30-792319/
Marky-p:
What made you leave the automaker industry?
To be honest, I wanted to leave the seniority/stress/accountability/politics rather than the auto industry itself. At age 50, I realised it was getting harder and harder for me to perform at that level.
I also wanted to move to much shorter term achievements. Sounds silly perhaps, but when every programme I am delivering takes 5 years to do, you don’t ever really get a real sense of achievement. Completing a days delivery manifest on the trucks works well for my caveman brain.
Martin.
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