The Coming Car Collapse

Hello everyone and welcome to the channel, today we are analyzing the automotive industry in the

coming

collapse

. If you invest in any of the Legacy automakers, you might want to check out those holdings over the next 10 to 15 years. is going to completely ruin the automobile industry, unlike the propaganda that traditional automakers have been pushing for everyone, the transition to electric vehicles is going to change the entire industry, it is going to shake up all the existing players and it is Some may not even come out on the other side. and if you ask me my opinion, I don't think many automakers are going to survive the transition to electric vehicles.

The auto industry is moving quickly right now, faster than any of the legacy automakers have had to deal with for decades the last time the auto industry saw this. There was a much faster movement after World War II, when you consider that American automakers were devastated when they opened the floodgates to the Japanese auto sector, and this is going to be a whole new front, at least when the US. began allowing Japanese automakers to sell into the market. In this country they were making the same type of cars as American automakers, but this time it's not just an increase in efficiency or production, it's the next evolution of what we define as a car and don't get me wrong, this is a fantastic thing. for the consumers. and a scary time for traditional automakers, not only will our cars not try to give our children asthma, but some of the cars now being prototyped will change our idea of ​​what a car is and what it can do , and it's time for us to look at the current automakers and really consider whether they will survive the transition to electric vehicles because, if you don't remember, they didn't handle 2008 very well and that was just an economic downturn at the time, the auto industry wasn't even changing that fast.

We are now entering a phase where dead is more expensive, labor has been scarce and any automaker that is going to make the switch to electric vehicles will have to completely reinvent their company from scratch and if you haven't seen The record levels of debt that automakers have been racking up, especially if you have any of their stocks in your portfolios, you'll want to take a second look at those dead levels; It's actually quite shocking if you take a look at Ford. General Motors, Toyota or Volkswagen, even those traditional automaker giants, are racking up record levels of debt compared to the slightly indebted and very agile Tesla, it doesn't paint a pretty picture.

Ford has a market valuation of about $50 billion, which isn't too bad. However, they have almost $90 billion in long-term debt, so Ford sold at its current valuation would barely pay off half of its debt, not to mention Ford and all other Legacy automakers will have to write off most of your debt. its assets because the big question is who would actually buy them. If you are watching the automotive industry shift to electric, would you buy a manufacturing plant that was made and designed to assemble combustion engines, not to mention all the research and development, as well as any patents or combustion engines and transmissions would be essentially useless now that automakers switch to EVs, they're not going to buy all that Legacy equipment and keep in mind that Ford isn't the only one with this problem, almost all Legacy automakers are deep in debt. to mention that within a decade or two they will have tens, if not hundreds, billions of dollars of assets and equipment that will be useless, with the only benefit that some of the warehouses and factory buildings can be reused and added to.

To make matters worse, most automakers are not making the main product of their future vehicles, the battery. Currently, all Legacy automakers buy off-the-shelf batteries and put them in a car they previously designed. Innovation has been minimal. This really blows my mind. can become a batteryless electric vehicle manufacturer and have you noticed that Legacy automakers keep showing electric car models and never have them on Lots? Yes, it's because they don't have the batteries to put the Chevy bolt in. The example is a relatively small electric vehicle, meaning it has a relatively small battery; There are still almost no bolts available on any of the Chevy lots and this car has been in production for two years, not to mention how unengineered they are.

I have been recalled twice just for the battery and I know technically it is not GM's ultim platform but the ultim platform is not a battery it is just a battery pack that still needs to be filled with LG battery cells and because Most battery remanufacturing is currently done in China and is likely banned in most Western countries. This leaves a very small number of battery manufacturers that all other automakers will have to buy. This will give them a lot of pricing power and yes that pricing power. with the battery cells ends up affecting the sticker price of the car which will give companies like Tesla a huge advantage and by no means am I not trying to be a Tesla fan right now but Tesla has a 10 year Head Start and the other automakers won't be able to catch up with that anytime soon and for the most part all the Legacy automakers are building the biggest electric cars they could make: the Hummer EV, the Ford F-150 , the Chevy Silverado, the Chevy Blazer, the Chevy.

Equinox, the recently revealed Ram truck, these are all giant platforms that will require giant batteries and none of the automakers have a way to build them. European, Japanese and Korean automakers have taken a much more conservative approach with the Kia ev6 and Volkswagen ID. hum and the Toyota be4 bez4 yet to produce something like this can we name the vehicles again using real words? It seems like Legacy automakers are spending more time designing vehicles than getting the core technology to build them. Compare that to Tesla, who only designed four models in the last 10 years, although they put a lot of engineering and design into those models, they spent most of their time trying to figure out how to build the batteries and how to better build cars in general, and The thing is it shouldn't be that complicated, let's imagine you can make 100 battery packs, what's the point of having 10 different models when you can only make 10 of each?

You would need 10 different assembly lines, all with duplicate workers, personnel managers, and parts, or you could produce two vehicles and produce 50 of each. It has now reduced the number of assembly lines by 80 percent. Congratulations on your ability to do basic calculations. Now he's been promoted and that's not to mention the overwhelming amount of debt everyone has. Right now, what would save the Legacy automaker from being absolutely crushed by the Chinese automakers is the fact that their national governments will prevent them from even entering, excluding Tesla, which is the only automaker outside of China that can really compete. with the Chinese EV manufacturers because if it weren't for Tesla there wouldn't be a single Western automaker in the top four and the sad thing is that if Tesla hadn't been around for the last 10 years, the traditional automakers would be even more back. than they currently are, the only reason they are moving towards EVS right now is because Tesla is finally gaining market share.

Can you imagine if Tesla didn't exist, the Legacy automakers would still be making those shitty hybrids and calling them a good day's work and I don't hate any hybrid owners. I just consider hybrids to be a compromise, specifically the standard hybrid. In fact, I think the plug-in hybrid was a missed opportunity that would have allowed traditional automakers to start making batteries in low volumes. while they continued making their standard cars, but unfortunately with the plug-in hybrids they still treated them like a car with a traditional combustion engine and by this I mean that instead of treating the engine as a generator they treated the battery as an assistant to the engine because despite What the big automakers are saying is that the battery shortage isn't going to end anytime soon, it probably won't even end in the next decade, so while they buy off-the-shelf battery cells at excessive prices, Tesla actually will make even affordable cars.

If the Legacy automakers are able to produce their electric cars, they will have to fight with their dealers not to increase margins due to shortages, and that's not to mention the other electric vehicle manufacturers who will be hot on their heels as these other manufacturers Of smaller EVs can't compete with companies like Tesla right now, they are filling a lot of small niches that are going to eat up the big players. Rivien is challenging Ford in the SUV and truck market, which is also a pinch to General Motors and RAM and possibly a bit to Jeep as well, it has companies like Lucid that are not very competitive at the moment but will compete in the luxury market against companies like Mercedes-Benz and Cadillac and then there's the quirky but cool little companies like Canoe, which will probably also compete with lifestyle vehicles like Subaru and Jeep, and while most of these small EV makers also have to buy their batteries on the market, they don't have tens of billions of dollars in debt hanging over their heads nor do they have the baggage of outdated legacy systems that no longer serve a purpose.

I don't know which one will go first nor do I know how many will survive, but I can almost guarantee that not all traditional automakers will come out on the other side of the electric vehicle revolution, they won't be able to make this transition, they aren't innovating, they aren't reinventing the way of making cars and are crippled by debt and legacy systems. think about all the automakers out there today and consider whether they will actually be able to make the transition Ford General Motors stalantis Volkswagen Mercedes-Benz Honda Toyota Yoda Kia Hyundai Subaru Suzuki Mazda and many more that I'm probably forgetting right now and every one of those automakers

coming

off the list will make it easier for others to survive, but only to a certain extent because at the end of the day all these companies are going to try to avoid bankruptcy, which means they are going to have to apply a margin of benefits to all their cars just to pay the interest on their staggering debts.

Compare that to new EV makers that don't have any debt and can still raise money from equity investors, not to mention Tesla can't. They don't even really need to make a profit on their cars right now, they could sell them at breakeven just to put pressure on the other automakers because General Motors, Volkswagen and Toyota don't make a profit, they are going to default on their debts. and then they will have to declare bankruptcy if Tesla doesn't make a profit, all they are doing is annoying their shareholders, that is a pretty big difference and will be a crippling burden as these automakers transition and while I am excited about the transition to electric vehicles I'm not going to enjoy the Legacy automakers, some of which are a hundred years old and have a long, rich history, most of which are the respective titans of their countries.

I won't be thrilled to see them file for bankruptcy, but I don't see any way all automakers are going to make the transition, but let me know what you think. I'm too pessimistic. Do you think your favorite automaker will survive the transition? Do you think old Otto has the ability to reinvent himself? or believe that natural selection in the capital markets is going to weed out weak players, let me know in the comments below and if you like the content, be sure to subscribe and keep watching The Daily Dollar.