Toyota to invest $1.3B in Kentucky factory to build battery packs and new EV
apnews.comSimilarly, Hyundai building $8bn battery plant outside Savannah, Georgia:
https://apnews.com/article/hyundai-georgia-electric-vehicle-...
At least Hyundai hasn't been faking emissions tests like Toyota.
https://www.reuters.com/business/autos-transportation/commit...
Not to mention spending a lot on lobbying against clean air regulations aroun the world https://thedriven.io/2023/05/11/toyota-under-fire-for-anti-c...
Hyundai did skimp out on standard anti-theft mechanisms which led to a significant number of car jackings upon discovery and viral share via TikTok.
https://www.forbes.com/wheels/news/kia-hyundai-car-thefts-se...
Every manufacturer has got a story at this point.
As someone who used to be a stalwart fan of Toyota, their behaviour recently is not my favorite.
Not to mention campaigning hard against EVs, complete with anti-EV propaganda in the form of kids' stories distributed to schools: https://electrek.co/2021/11/11/how-toyota-sneakily-spreads-a...
They can campaign against EVs, and their propaganda isn't any worse than the pro-EV propaganda that's circled around, most of which ignore very inconvenient facts around the cost-value of EVs. Given that, I have no problem with Toyota being anti-EVs and handing out information on why they are.
>> "At least Hyundai hasn't been faking emissions tests..."
Not to devil's advocate, but it's tough to prove a negative. All we can say for sure is that they've not been caught yet.
Its because the south is fairly young and impoverished, so cheaper to mfg there. Down vote, but that's the reason.
Savannah and Brunswick are huge car export ports because many manufacturing facilities are spread out between South Carolina and Georgia: Volvo, Mercedes, BMW, Honda, KIA to name a few. These ports are also the largest on the Eastern seaboard of the US. So access to shipping is probably one of the main reasons. Also major demographic shifts to the Southeastern part of the US help supply the labor pool.
Georgia and South Carolina tend to be the poorest states. The Poverty rate is around 14.5% for both. Compare that to California where the poverty rate is 12.5%. Though the poverty rate is lower, California has more people in poverty than Georgia and South Carolina combined. Anyway, using the word "impoverished" is grossly misleading.
On this impoverished statistic: does it account for more access to social services?
California is much more likely to have better social services and AFAIK it is less violent in poor neighborhoods than southern states
I would much rather be poor in NYC than Georgia
They aren’t even in the top 5. There are poorer states
No, it's because Georgia is very aggressively courting large manufacturers with "phantom bonds" and "bond for title" deals.
Problem is, it's not paying off - the state isn't benefiting overall from it, and as soon as they stop providing these sweetheart tax breaks and freebies, comopanies will pull up and move to the next state willing to do so
They're going to pull up their $8bn factory?
Have you ever been to the south? The down votes are because your position is asinine.
It's more likely that southern states are willing to throw huge incentive packages to these manufacturers. Probably not so much on the coasts or the northern states.
Also, unions are less common in the south; those states tend to be right-to-work states.
Finally, you used the word "impoverished", which is ridiculous. But wages are lower in the south so that is probably another reason.
Wages are less as is the cost of living. Everything is relative.
$1.3B seems like a lot of money but it isn't for a car factory, especially spread over many years.
For context: Tesla is guiding for $10+B a year capex spending for the next 3 years.
Nevada factory took $6.2B and Tesla plans to spend additional $3.6B
Toyota is still under-investing in EV. $1.3B is nothing.
As someone who lives a few miles from Georgetown, KY, it's important to note that this factory already exists and sounds like they are (partially) re-tooling it to begin EV production. So that might explain the dollar figure.
Louisville checking in, spent a lot of time in Georgetown and can confirm this is likely just more work on the Camry plant.
Toyota has been good to the area.
Off topic, but is there a popular tech meetup in the state? Moved back a year and some change ago and would love to get more involved.
We have been working hard to grow the bluegrass tech community (mainly focused on Lexington area right now). The following are a good place to start:
- https://lextalk.tech/ - should be another one in April or may
- https://www.meetup.com/The-Bluegrass-Developers-Guild on Meetup - lots of good events here
- https://www.bluegrassdevs.org/ - join our slack
I really suggest coffee and code. It is super chill and a great way to meet folks around the area: https://meetu.ps/e/MN0XK/1RyZP/i
We are always looking for folks to help out.
Wow there's more of us here than I thought. Glad to see another lexitonian!
I'd be curious too. I'm in Powell County, so the "greater Lexington area". I'm seeing these in Lex:
- PHP user group (https://www.meetup.com/kentucky-php-user-group/events/298973...)
- Bluegrass Developers Guild (https://www.meetup.com/the-bluegrass-developers-guild/events...)
Also, being an early employee at a startup, I've been attending the rare Startup Lexington event I can make it to.
Feel free to contact my email (in profile) if you want to connect
Another Kentuckian in tech here. Thanks for the list. A friend recently attended https://13layers.com/event/lextalktechjan24/ and said it was a good mix of talks. I think they're quarterly and it's on my list to follow up.
I also lurk on these slacks: bluegrass-dev.slack (same folks as the meetup I assume), Louisville Tech louisville.slack, and startuplexington.slack
Hope we keep this ball rolling a bit longer on meetups and gatherings both in person and online.
>For context: Tesla is guiding for $10+B a year capex spending for the next 3 years.
I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
>Toyota is still under-investing in EV. $1.3B is nothing.
This is one factory.
What about Toyota's plans makes you think they will ever catch up to everyone else with EVs?
>What about Toyota's plans makes you think they will ever catch up to everyone else with EVs?
Their history of engineering and execution.
What makes you think think they can't? EV proponents like to argue that the simplicity is what makes EVs so great, but at the same time making arguments like "no one can catch up".
Believe it or not, it's not a certainty that EVs are going to be the solution, rather than just an improvement on our way to something else.
What makes me think they can't catch up is watching them spend dramatically less than their competition on the needed infrastructure when they are already very far behind.
To catch up from behind, you need to do more than your competition.
This is an article about a single factory - Toyota spends upwards of $30 billion a year in CapEx -- Tesla spends under $10 billion per year.
Toyota's battery complex in North Carolina is a greater spend than the entire annual budget from Tesla and will have about the same output as Tesla's "gigafactory". The $1.3 billion in Kentucky is in addition to that.. it's a mistake to think they're not investing heavily.
https://www.just-auto.com/news/toyota-to-double-investment-i...
I would imagine the catch up is not in the form of a factory, but with raw material supply chain.
Tesla would've locked in cheaper lithium supply than toyota.
Sure Lithium is important - but Toyota has been selling hybrids for 25 years... so of course they already have a pretty sophisiticated lithium supply chain.
Here's one article from 2018 where they secured 100% of the sales rights to an Argentinian lithium mine that is equivalent to all of the lithium Tesla used worldwide in 2021.
https://www.toyota-tsusho.com/english/about/project/04.html
It's actually inconceivable to me how Musk & Tesla were able to launch a new auto manufacturer, especially with a novel drivetrain. The amount of things that had to go right, the number of decisions they had to make, the number of supplier agreements and sales agreements are a massive, monumental lift. The world is a better place for Tesla existing and for proving the market for electric cars.
However...
People massively underestimate the amount of money the big OEMs can throw at these problems. Toyota Group has an entirely separate mining and materials company with as much annual revenue as Tesla's entire org: https://www.toyota-tsusho.com/english/ir/library/integrated-...
Tesla has ~$100 billion in assets, Toyota has >5x that. I hope Musk settles down with his silly time-wasting edgelord nonsense on Twitter and focuses on Tesla and SpaceX - with more of a steady hand and a singular focus on EVs, I think they could be the largest manufacturer in the world but they're not there yet and a slightly cheaper lithium supply isn't the unique advantage that's going to get them there.
When someone else has already spent money on the hard part of being first, those that follow do not need to spend the same amount of money repeating the same mistakes.
Correct. Toyota's bet is simple: what makes rational economic, environmental, and good-policy sense for most locales is not an EV. It's a hybrid.
And it's a bet that's working well so far: https://fortune.com/asia/2023/12/28/toyota-hybrid-cars-sales...
yet they refuse to build hybrids in large numbers. RAV4 primes and Prius primes are insanely difficult to get at or near MSRP. Toyota is saying that Hybrids make the most sense, but still use hybrid as an upsell for a higher trim, and thus only makes a fraction of their cars as hybrids. If >50% of their vehicles were hybrids, i'd be ecstatic and would agree with them, but currently it's just whataboutism and misdirection
they don't refuse to build. they fail to match production to demand due to logistical reasons. factory discussed here it's literally solution for production problems that they have.
when i was buying hybrid volvo a few years ago and talked to dealership boss, i was told that volvo got surprised by demand and they simply don't have enough battery packs in order build more.
and things like battery pack for car, it's not something that you can just ramp up capacity from today to tomorrow.
Hybrids combine the costs and maintenance issues of an ICE with the costs and maintenance issues of a BEV. This is a lot of unnecessary complexity and cost for what will ultimately be a short transition, during which China will substantially eat into Japanese automakers’ markets and gain the upper hand in battery supply.
What else?
They don’t need to innovate just execute and Toyota is all about execution. Build a car people want and let sales drive future investments.
Yeah I wouldn’t bet against Toyota in a game of catch up. They’ve proven over and over that their real strength is in doing what other companies have proven out and doing it better and more efficiently.
Execution like the wheels falling off their flagship all-ev car? After they've been making cars for 85+ years.
https://www.carsales.com.au/editorial/details/wheels-falling...
https://www.motortrend.com/news/toyotas-fix-bz4x-disconnecti...
That doesn't get the headlines and attenion that a icon enlargement software update on Tesla does on HN.
Teslas Have a Minor Issue Where the Wheels Fly Off While Driving, Documents Show - https://futurism.com/tesla-flaws-failures-blame-drivers
It's really easy to cherry pick problems when someone makes millions of cars every year.
Wasn't that about one incident, where the driver was in a traffic accident before the wheel fell off?
Wheels are actually designed to fall off in an accident.
Toyota was forced to recall all their BZX cars for that issue, whereas the scale of the problem you linked appears to be much lower across Tesla's models.
It was a voluntary recall on an extremely low production vehicle (at least at the time), a total of 260 cars with a potential issue.
Compare that to the tens of thousands of ACTUAL INCIDENTS identified by Reuters through Tesla internal documents and Tesla's refusal to even cover the repairs, let alone proactively recall all potentially affected vehicles. Much of what was covered by Reuter's occurred AFTER China forced a recall for the exact same issues.
https://pressroom.toyota.com/toyota-is-conducting-a-safety-r...
https://www.reuters.com/investigates/special-report/tesla-mu...
"All their BZX cars" = less than 5,500 cars total. It wasn't just a completely new car model, it was the first one built on Toyota's e-TNGA modular EV platform. The factory line had just barely gotten off the ground.
Toyta sold ten million cars that year so scale wise that doesn't even qualify as a rounding error. The Teslas suspension problems that caused some wheels to fly off effected tens of thousands.
I think Toyota feels comfortable being a follower in that case and eventually use a large number of suppliers for the basic things that Tesla as a first mover has or wants to develop themselves.
That'll be an interest test -- the reason Tesla is so vertically integrated is because it allows them a greater profit margin. They've already been using that margin to slap around other manufacturers and force them to sell in the red.
If you mean stop manufacturing Internal Combustion Engines, Toyota have said many times, they do not intend to "catch up to everyone else" with EVs. They have the luxury of sitting and watching their competition leave the market, thus leaving Toyota's road to great profits wide open.
Only works if the competition does indeed leave the market. The risk of staying out while everyone else embraces the next generation technology is a reduction in customer loyalty. Every current Toyota owner who buys a competitor's product is potentially someone who will switch loyalties going forward.
The electric car Toyota is selling now is doing quite well sales wise. (at least in Norway)
They have a whole line of them "coming any day now".
They have a lot of people who love the Toyota/Lexus brand.
Toyota has probably shipped more battery capacity in hybrid cars than most EV manufacturers to date.
They don't need to catch up to anything.
They're still killing it with hybrids and the rest of the industry, having realized that "all electric" is a little too early, is scrambling.
The RAV4 is the top selling "SUV" in America(1) and it looks like close to 50% of those are the hybrid model.
1. https://www.caranddriver.com/news/g43553191/bestselling-cars...
In 2022 it was 48%: https://evstatistics.com/2022/07/48-of-1h-2022-toyota-rav4-s...
If Toyota shipped the same annual battery capacity as Tesla then they could sell 100% of their vehicles as hybrid or plug-in hybrid instead of 30%.
This might be true cumulatively but certainly isn't true on an annual basis anymore.
If Toyota were shipping the same battery capacity as Tesla they could make every car they sell globally a hybrid or plug-in hybrid and they are at about 30% of that.
You are assuming that 100% of Toyota customers want to buy EV vehicles.
How many EVs does Toyota sell each year? A few thousand or perhaps tens of thousands? It's at best a rounding error. Not something Toyota customers really have to worry about.
I wasn’t, but who wouldn’t want a hybrid?
5 million prius * 14 kWhr 5 million tesla * 50 kWhr
This is probably true, hybrids may win in the US market in the short term until they are outlawed?
They'll never be outlawed. There are too many use cases for 300+ mile trips in remote areas where recharging isn't possible or less remote areas where it isn't practical.
There are laws in effect already: https://www.gov.ca.gov/2020/09/23/governor-newsom-announces-...
If it’s anything like Canada it still allows for hybrid. Banning everything but BEV will never happen because Bev will never work for a small subset of users
they have similar law in Canada: https://www.cbc.ca/news/politics/canada-electric-vehicles-20....
That’s literally the one I was talking about, it will still permit hybrid and there is no requirement for everything to be a BEV
> it will still permit hybrid
article says plugin hybrid, not just hybrid, which is kinda loophole.
a hybrid is still a hybrid that you can just keep filling up with gas and never plug-in.
yes, though in California cars required to be 0 emission by 2035
no? it seems to be the exact same rules as canada?
> new cars sold in 2035 and beyond are zero-emission vehicles which includes battery electric vehicles, plug-in hybrid electric vehicles and fuel cell electric vehicles.
I can't find any mentions of hybrids nor plugins in actual executive order: https://www.gov.ca.gov/wp-content/uploads/2020/09/9.23.20-EO...
it just says: zero emission, and hybrids are obviously not
that is the exact same language used for the canadian law. "zero emission" includes hybrid
https://ww2.arb.ca.gov/resources/documents/cars-and-light-tr...
your page is not law.
And the law does actually not define “zero emissions” as a car that makes no emissions lol hybrids are permitted by how it defines them
> until they are outlawed?
In the US? When hell freezes over. In the Nederlands? Probably in 5-6 years.
Test drive a RAV4 Prime.
All it needs is more battery capacity, which apparently they are indeed investing in.
RAV4 Prime owner here. I completely agree with wanting more battery capacity. For my use case, it has been a minor complaint. Been very happy overall with it.
I could walk in and buy Model Y any time I want. Not so with Rav 4 Prime.
Plugin hybrids are the future.
Hah, try doing it via lease ... the supposed 'seamless' experience completely falls down ... I've just spent 5 months handholding a model 3 order, only for it to fall down at the end when Tesla tried to stiff our company for £3k.
Ended up leasing a BMW i5 because of the complete waste of time and hassle.
I'm glad it wasn't my car but, based on the experience, I wouldn't go near that joke of a company ever again. Lost a repeat customer too.
Takeaway: their staff listen more to their robot portal software than they do to rational customer experience.
And I know I'm p'ing in the wind ... but Tesla (in my experience) get way too much credit. I've had better experiences with conventional dealerships (and that's saying something considering how bad they are).
N=1
> I've had better experiences with conventional dealerships
I don't know how.
I've got dealing with conventional car dealers down to an art form, and it still isn't even remotely comparable.
To get a Tesla you order it online and then go in for an appointment to pick it up. Hand them the payment, they already have all the paperwork ready for signatures, they give you the key cards and offer to help you install the app. You accept delivery and drive home. If you want, you can easily be in and out in 15 minutes or less. And the delivery guy doesn't try to sell me anything. No extended warranty, nothing.
Maybe I had a particularly bad experience, but what you describe is what I was expecting.
What I got was 5 months of hot potato juggling, inept delivery advisors (which I later discovered to be because they had no power and rigidly stuck to their what their portal says), confusion and countless hours spent handholding a very simple order. Only for it to collapse at the end because pricing changed (BECAUSE of delays when Tesla messed up the order).
Anyway ... joke company, and I'll not go near them again.
tesla fans defending how easy it is to find a Tesla in stock is a new one. grand.
I don't think that's the point they're trying to make.
I tried for a while to score a RAV4 Prime. Dealers were assholes about it, they don't have waiting lists or anything like that. "Come by every morning to see if any show up. We sell them all within 15 minutes of arriving so we don't need you."
So I bought another Tesla. At this time the Toyota experience has left such a sour taste that I will probably not ever consider one of their products in the future. Other manufacturers have really stepped up their game anyway, so it's not like Toyota makes the only reliable car you can buy.
As much as I dislike Toyotas ego, they do make fairly good vehicles, which is why they are in high demand.
Easy to catch up when EV market is shrinking. Toyota is right, gas hybrids are the future. Awesome range, you don't have to own a home to charge one, no problems in cold weather.
The thing about hybrids is that while you get the benefits of a gas engine (not needing to charge), you also get most of the combined drawbacks of ICE cars and EVs. You still need to go to the gas station, change the oil, maintain the belts and filters, etc. If you're mostly driving in EV mode, stale gas could even be an issue (though that's probably not a huge concern for most). But you've also still got electric motors and battery that could fail, although admittedly the battery is a lot cheaper.
IMO hybrids could have a lot of life as a stopgap, but full EVs are pretty clearly where things are going. We've got chargers being installed (Tesla 4th Gen) that can charge at 600kW. Cars can't handle that yet, but the current 800V platforms are getting closer. Once you can get the better part of a full charge in less than 10 minutes, it's not really less convenient than stopping for gas on a trip. And as more people get EVs (and even PHEVs), more buildings will be equipped with charging. Even a regular 120V outlet is fine for most people for day to day overnight charging - especially if they can get a quick top-up to near full at a supercharger when needed.
Summary: hybrids are great for a lot of people right now and in the near future. In the medium to far future, EVs are going to be superior in, I think, all relevant metrics^. (Even cost, as batteries will get cheaper, while the cost of added hybrid components will stay roughly flat.)
^Well, except weight and sound, specifically thinking of sports cars. I'd be a lot more excited about the new electrified Porsche 718 (Cayman/Boxster) platform if it were hybrid instead of full electric, for those reasons. Not super relevant for commuter cars though.
In present day reality though, most people live in cities in cheap apartments that won't have chargers for at least a decade. I watch woodpeckers destroy the wood trim at my building, you think mgmt is going to add EV chargers any time soon? Hybrids have superior reliability and lower cost of ownership than pure gas which is why uber drivers and nyc tax have adopted then en masse. All of the disadvantages of hybrids are theoretical or from some lofty "elegance" perspective when in the real world, hybrids work brilliantly. Toyota has been ruthlessly pragmatic with their cars and that's why they've worked. It's admirable how much they've avoided the EV fad and stuck to practical vehicles. It'll be at least a decade until they're on par with hybrids.
Definitely lower cost per mile due to the fuel economy. Clearly they make a ton of sense for taxis. Do you have evidence for the higher reliability than pure ICE cars? I hadn't heard that, and it seems counter-intuitive to me. I certainly know anecdotally I've heard many claims of Prius hybrid batteries failing. (Which isn't necessarily a huge problem, but just saying it adds a point of failure without, as far as I can tell, removing any.)
>If you're mostly driving in EV mode, stale gas could even be an issue (though that's probably not a huge concern for most).
volvo hybrids force engine operation in case gas wasn't refilled/used for too long.
Makes sense. So yeah, not something the end user would really have to worry about then.
well, if you will go to hybrid car forum to "peak covid" timeframe, a lot of users actually worried about it. this kind of stuff is rather obscure functionality mentioned deep inside the manual that nobody bothers to read.
also, this is volvo. no idea how other hybrids tackle this issue
The EV market was 30% larger in 2023 than 2022.
Lagging indicator. Hertz is dumping their Teslas and canceled their purchase of 65k Polestars.
If you want to cherry-pick random anecdotes I'll counter with multi-year waitlists for Hyundai EV9 despite being expensive and ineligible for the $7500 rebate.
Wait lists for a manufacturer are somewhat interesting. It's interesting that Tesla and Toyota both sell cars faster than they make them, and can get away with making new car buyers wait for months.
Wait lists for a single model? I mean, maybe Hyundai just aren't making a lot of EV9s.
>Hyundai EV9 despite not being expensive
It starts at €70k. In what world is this not expensive? Maybe in Bay Area Fang wages.
Sorry, typo. It being very expensive makes the wait-lists surprising. If it wasn't expensive wait-lists wouldn't be surprising.
> It being very expensive makes the wait-lists surprising.
Does it? Ferraris, Zondas and Koenigseggs also have big waiting lists.
Expensive things to the well off sell easier than average products to the ever shrinking middle class.
I guess compared to other competing family EV-SUVs in the segment it's not too expensive. Come to think of it, there isn't any. The Rivian R1S comes close, but way more expensive and isn't really a family SUV. The EX90 is also more expensive and according to some it isn't even nearly premium.
Maybe EVs aren't good rental vehicles. This seems like it would be true, at least until public charging infrastructure catches up. And at the same time, maybe EV adoption is growing really fast. That also seems to be true, because the numbers say its true.
The fact that they already sell the most popular electric vehicle in the US and Japan, and have done so since they launched the very beginning of electric vehicles, over 25 years ago? (Pruis)
Ignoring that Prius is a hybrid and not an EV:
Toyota sold 30k in 2023, the lowest number ever.
Tesla sold 400k of Model Y and 210k of Model 3 and 31k of Model X in 2024.
So Model Y outsold Prius by 13x in US in 2023.
---
https://carfigures.com/us-market-brand/toyota/prius-family
https://cleantechnica.com/2024/01/29/tesla-model-ys-huge-gro...
Look at the insanely huge sales of the RAV4 hybrid. Americans don't buy small cars, we buy SUV/CUVs and Toyota is the king.
Didn't the Model Y outsell the RAV4 in 2023? I guess there are estimates that go both ways on that, but nobody really disputes that the RAV4 and Model Y are neck-and-neck. Would be nice if Tesla released actual numbers.
Doesn't look like it.
4. Toyota RAV4 (434,943 units sold)
5. Tesla Model Y (385,900 units sold, estimated)
https://www.caranddriver.com/news/g43553191/bestselling-cars...
This source says the Model Y sold 403,897 (still behind the RAV4) https://www.visualcapitalist.com/best-selling-vehicles-in-am...
This source says Model Y sales were 394,497: https://www.cnbc.com/2024/01/06/top-10-best-selling-cars-in-...
And this source says Model Y was #2 and RAV4 #3.
https://wolfstreet.com/2023/12/07/tesla-model-y-is-2-us-best...
My point stands, Model Y sales are matching RAV4 sales, for all practical purposes. And it happened in the space of a couple years. Toyota sells a lot of cars, but they're not the undisputed king of the hill.
Also, not all RAV4s are hybrids. Model Y definitely outsold RAV4 hybrids. Though hybrids aren't any kind of EV (unless they are plug-in), so that's moot.
Why are we restricting ourselves to Rav4's? Toyota sells well over 2 million EV's per year, far more than all Teslas.
And yes, HEV's are EV's the same way BEV's are.
https://www.statista.com/statistics/1181404/alternative-sale...
The vast majority of Toyota hybrids cannot be powered by electricity from the grid. I'd say that's a significant difference.
why do these have to be estimated? I get that Tesla might not be releasing the numbers, but these cars have to be registered, right? The registration numbers seems like it should more accurate as actual owners.
Hybrid. I'm nitpicking, but current full electric Toyota cars are not that good or popular.
Electric cars are not that popular, period.
Hybrids may turn out to be a more popular option.
> Electric cars are not that popular, period.
That is a matter of opinion. As a brand new technology, I think a market share approaching 10% is incredible. Only fans thought this was possible even 5 years ago.
Hybrids have basically all the possible parts that can break.
But Toyota’s hybrids have a very good reputation regarding longevity and low cost of ownership.
Not really, the transmission can be made much simpler and more robust.
But the entire selling point of Toyota to most people is that it WONT break, at least for 150k miles.
What I meant is that Toyota electric cars are not popular inside the electric category. From range to charging speeds, they're behind other brands.
Ha, I read that as Tesla and it's still true. Almost like there's more to a car than range and charing speed.
Yes, there's more to a car than range and charging speeds, but that doesn't change the fact that Tesla makes some of the best selling EVs and that Toyota doesn't.
Even if you care more about build quality and comfort, there are cars from VW, Audi, Hyundai, Mercedes, etc, that are better than, say, the Toyota bZ4X while having better range and charging. Toyota simply doesn't make the best pure electric cars.
> I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
Not a Tesla fanboy (I'm turning mine in for a Rivian), but the OP wasn't saying this, not sure how you got that conclusion. They are saying for a car company they are (1) way behind and (2) any investments they are making won't reach fruition for years, nor likely make a dent in the industry.
Outside of MB and the Chinese EVs, the design of Tesla motors is far superior. Their build quality and finishing is awful however - something the traditional players do really well.
>not sure how you got that conclusion.
The OP drew a direct comparison from what Tesla spent on a plant, to what Toyota is spending on a factory. How can you draw a different conclusion? What makes Tesla "right" and Toyota "wrong"?
>They are saying for a car company they are (1) way behind and (2) any investments they are making won't reach fruition for years, nor likely make a dent in the industry.
Way behind what? The RAV4 sold more units than the Model Y last year, and that's just one model. Again, people have this weird way of extrapolating what Tesla is doing in the EV market (dominating) to the overall car market (rounding error).
Nope, the Model Y was the best selling vehicle in 2023, regardless of powertrain.
https://insideevs.com/news/706169/tesla-model-y-best-selling...
car, not vehicle. The best selling vehicle in the US in 2023 by a long shot is the Ford F-series truck.
Car and Driver also says the Rav4 outside the Model Y, fwiw.
https://www.caranddriver.com/news/g43553191/bestselling-cars...
Your article doesn't contradict their argument. Their link is for worldwide sales, yours is US only.
Further, that top spot is not for a specific Ford truck, but for all F-series trucks put together. That's an apples to oranges comparison.
it doesn't. it just depends on how you slice the pie to see what you want to see.
Yeah, but there are standard ways to slice the pie. An equivalent approach would be comparing multiple Ford vehicles to Tesla’s entire lineup. They are about as similar to one another as Ford’s trucks are.
I do believe that Tesla's success in the last decade was in large part due to the fact it was the only technology company that could use all the money people were throwing at technology companies.
Softbank's belief was that throwing capital would just make things work. But from wework to many other of their startups shows its not the case.
Telsa had to deploy their capital very efficiently in a capital intensive industry. Say their bet on the Shanghai factory, despite obvious IP leak risks and spawning deadly competitors like BYD, was their only choice to reach scale at a low cost.
>Telsa had to deploy their capital very efficiently in a capital intensive industry
Surely that's an easier task than deploying a similar amount of capital in an industry that isn't capital heavy.
We have known for decades that normally doesn't work. However we also have a few exceptions that tease people into thinking it works enough - or that they can identify the few winners (I'm not sure what). Amazon.com at one time was the place people were throwing more good capital after bad - I was convinced this was the case in the late 1990s.
Spawning?
BYD was founded in 1995 and its automotive subsidiary 2003 (via aquisition)
BYD didn’t really differentiate itself until starting 2019, which is about a year after Tesla would have had to complete its forced technology transfer program to establish Tesla Shanghai. BYDs first new generation EV concept car in 2019, and production of the Seal and other major EV products (which looks like clones of Model 3s, etc) didn’t start in earnest until 2022. They changed their logo to be a stylistic copy of the Tesla logo in 2022.
Yes, their bus and ICE lines long predated, and they had hybrids built out of forced technology transfers from Toyota. But their EV lines that are so popular didn’t start until after Tesla acquired their corporate license and rights to build their gigafactory. If you’ve done business in China you know forced technology transfers and training of competitive local workforces is contingent on those stages. The factory itself and its parts supply chain would also have required transfer of technical knowledge, skill, and local supplier ability without exclusivity.
It’s not a knock on Chinese people to say the Chinese government is intertwined in Chinese industry (it is communist after all and ultimately the means of production is a public trust), or that there is no “fairness” by western standards in Chinese industry and governmental influence. But it’s also disingenuous to believe BYD pivoted to a full on global Tesla competitor in 4 years from being a low end hybrid and bus manufacturer based purely on their tenacity and innovation, neither of which is BYD known for in its history (having been propped up as a money loser for decades by the government and facing a lot of intellectual property lawsuits from Toyota, Mercedes, Renault, and others throughout its history). It’s too implausible to take seriously and there’s no reason to be credulous.
Fully agreed - “enabled” or “spurred” would have been more appropriate word choices.
It’s not like BYD appeared out of thin air a few months after Tesla opened shop.
Ummmm you might want to compare debt of VW, Toyota and Tesla
Genuine question, what do you think comparing debt loads of established vs startup companies should tell me?
What's the trend?
In addition to that, I wouldn't be surprised if they got 100 percent of that amount from the government in one way or another
Yeah, it must be less than 1% of revenue. Probably a lot less, given that it is likely spread over several years.
It feels "right-sized" given Toyota's approach towards EV's and the slowing adoption rate of EVs in the US.
Toyota initiated the hybrid as a modern platform, and they continue make the best selling hybrid in the world (Prius). But since they don't want to be in the business of making undesirable vehicles with short lifespans that require expensive maintenance, they have stuck to hybrids rather than full electric and all the extremely costly low lifespan batteries that go into them.
Speaking as a 2004 Prius daily driver, the Toyota approach works. And I guarantee I'm a hell of a lot more "environmentally friendly" than anyone who commissioned literal tons of metal to be dug out of the earth to make their "green" new Tesla.
You aren't more environmentally friendly, in less than 2 years an EV is net positive
https://www.tesla.com/impact (see page 22)
And that's not even mentioning that in 20 years we won't be mining materials out of the ground anymore, will just be recycling existing battery materials
The break-even depends on the source of electricity, which in turn depends on Geography.
If the electricity is from coal, the break-even is after 5 years; even then, the lifetime emission of the EV is not even 10% less than that of the conventional gas car.
If the electricity is from hydro and other 100% non-fossil fuel renewables, than the break-even is even shorter, under a year, and over the lifetime the emissions are about 70%~80% less overall (and the longer the car is driven compared to a conventional gas car, more than 13 years, the greater the reduction in lifetime emissions)
All data from this source:
https://www.reuters.com/graphics/ELECTRIC-VEHICLES/EMISSIONS...
(Full webpage, for context: https://www.reuters.com/business/autos-transportation/when-d...)
OP continuing to drive a 20-year-old car (of any kind, not just a hybrid) is likely more environmentally friendly than buying a new car every few years. They're doing the reduce part of "reduce, reuse, recycle." A long-lasting, low-maintenance hybrid has a good argument for being very environmentally friendly.
Combustion-powered vehicles are something of an exception, because only a small fraction of their pollution is associated with their creation. Buying a new car every few years probably isn't optimal, but operating an ICE vehicle for decades probably isn't optimal either.
In Brazil, cars run on ethanol. Emissions associated with combustion of the fuel are zero. It's not the ICE bit that's a problem, it's the fossil fuel part.
> OP continuing to drive a 20-year-old car (of any kind, not just a hybrid) is likely more environmentally friendly than buying a new car every few years.
Sure, but that isn't the comparison here. Buying a new EV and then holding on to it for 20 years will be even more environmentally friendly.
Also, how much investment in renewables is because of EVs? If we had 0 EVs and same renewables, coal/oil/gas generated electricity would have gone down by what is now consumed by EVs.1. Conflict of interest. Is there any alternative report? 2. 2 years is vague, do we have it in kms? 3. Which car is it against? How does it compare with Prius 2024?Parent stated they drive a Prius, which is not the "standard EV" that article mentions. They slate 24mpg, which is laughable: that's around what my old gas guzzling V8 got, and they call it the norm? The Prius gets high 40's easily. But it's a EV fluff piece published by "the EV company", one can't expect scientific integrity.
In fact, reading through the lines of Tesla's own fluff piece, in places like China the Prius is net-environmentally positive even year by year as compared to the Model 3. China has the most emissions of any country, so that's a pretty big caveat to simply ignore. But again, fluff piece by the fluff company.
> Toyota initiated the hybrid as a modern platform […]
E.g., the first Prius was released in 1997:
> But since they don't want to be in the business of making undesirable vehicles with short lifespans that require expensive maintenance
The average BEV is lasting just as long as any other car on the road and the used market is not filled with "broken EVs requiring expensive maintenance". The opposite seems to statistically be the case: the used market for EVs is "barren" because the cars don't need expensive maintenance and often stay with their first owners for longer and when they do move to new owners don't often go through the traditional used market because they don't need as much maintenance.
You've been lead to believe some interesting misinformation. Toyota themselves have been a source of some of that misinformation, which is further unhelpful.
Do you have citations? I can think of alternative & plausible explanations:
- the used car industry is just barren post-pandemic. Prices are up and inventory is super low [1]
- EVs are generally not that old! Why put a BEV up as a used car when it's just a few years old? The average age of a used car is 6.1 years (according to CBC in Sep-2023) [2]. Further, that 'used car' age is up from 4 years, which further indicates the first point that the used car market is very short on supply. Most of Tesla's sales have been in just the last 4 years [3], Tesla represents a lot of BEV car sales in the US (going from memory, it was about 75% and is down to around 55%). In such a short amount of time, most BEVs are essentially still brand new. Thus, BEVs not being in the 'used' market is somewhat expected since they are half the age of the average used car, most of them are under 4 years old.
Thus, their lack of presence in the used car market could easily be more a function of their age (relatively brand new) compared to: "don't often go through the traditional used market because they don't need as much maintenance."
[1] https://www.cbtnews.com/the-state-of-used-car-prices-why-are...
[2] https://www.cnbc.com/2023/09/26/3-things-to-consider-when-bu...
[3] https://cleantechnica.com/2023/04/22/tesla-just-passed-4-mil...
That CNBC article points out one of the big sea changes in the fast recent jumps from a used car average of 3 years (for decades prior to ~2017) to 4 years (prior to 2019) to 6 years is a big change by rental car companies to hold rental fleets longer. The biggest sea change for rental companies over the last few years has been a switch to a higher balance of BEVs in their fleets. It certainly seems to me to be causative, the used car age average is rising for the first time in my lifetime just as BEV ownership is rising doesn't seem to be a correlative coincidence and more indirect evidence that the BEV first owner lifetime is higher than historic ICE averages. (Possibly much higher given that 4 to 6.1 year jump in just one calendar year.)
The early EVs have passed their 10 year marks. Some are closer to 15 years. There's a very long tail of BEVs already on the road. The only models that statistically have shown "battery degradation" enough to remark on have been the early model years of the Tesla Model S and Nissan Leaf before both companies invested in active thermal management of their batteries. So far "to remark on" was "noticeable compared to factory spec", but most of those batteries remained in first use (as car batteries). I've heard of Nissan Leaf battery replacements as a mini-industry, but not due to battery degradation, due to massive jumps in density upgrading the early Leafs to larger range than their original spec. There doesn't seem to be much of a market yet for Tesla battery replacements and most of the numbers thrown around are speculation and/or misinformation.
Thanks for the reply. Your hypothesis seems more plausible now to me FWIW. Before I would outright agree (in order to be convinced), I'd like to see more evidence/data that used car prices are being driven by low maintenance requirements of EVs and that it is not other factors.
Another thing to consider, the picture is changing quite a bit somewhat recently. The supply crunch is fading, used car prices are coming down [1], and the effects of higher interest rates is taking hold. Would you say those recent trends are consistent with your hypothesis?
so, about market for tesla battery replacement: https://www.reddit.com/r/RealTesla/comments/1akc3bz/wifes_20...
Preface: I am not familiar with Tesla, they tend to do their own thing.
When my early-2000’s Prius battery died Toyota only offered a full swap out for $insane. However there were 4 different shops within cheap/free towing distance that would swap out individual failed battery cells for around 1k with a multi-year warranty. It is my understanding that most EV batteries are in the same boat. So, like many stories, I would not count this post against all EVs, just against stupid Teslas.
i specifically wrote "tesla"
Yes, and we are both specifically writing in a thread about Toyota battery vehicles.
> There's a very long tail of BEVs already on the road.
At best they're 0.5% of the total number of vehicles in use.
> The average BEV is lasting just as long as any other car on the road
Teslas haven't even existed as a car producing company for as long as most cars last, Toyotas in particular. Model 3's certainly not.
> The used market for EVs is "barren"
I just pulled up hundreds in a 10 mile radius of me on craigslist. Probably most needing $20,000 battery services.
> You've been lead to believe some interesting misinformation
No, you.
Your 2004 Prius has a lead acid battery, hows that for "low lifespan" battery?
2003 was the last model year without lithium ion, and the years before that were nickel-cadmium, not lead-acid.
LOL. No EVs since the invention of Li Ion used lead acid. Lead acid just wasn't fit for a mass market car.
> But since they don't want to be in the business of making undesirable vehicles with short lifespans that require expensive maintenance
Then why did they go all in on hydrogen cars?
https://www.hydrogeninsight.com/transport/analysis-it-is-now...
"All in" is a very strange way to describe a multinational corporation producing in the single digit thousands of an item. They tried something, it hasn't panned out yet, they're sticking to what they know works in the mean time.
Because the Japanese government bet big on hydrogen and heavily subsidized the industry. Also, is there any evidence that hydrogen vehicles have short lifespan or require expensive maintenance? I don't disagree about how undesirable they are based on fuel cost but its hard to suss out how much of that is just based on extremely low production.
I'm not sure what could justify comparing the announcement of a single investment to upgrade a plant to the capex of an entire auto company.
Do you really think this $1.3B is Toyota's entire capex in EV?
>> Environmental groups have long criticized Toyota for being slow to move toward fully electric vehicles, instead clinging to gas-electric hybrid technology.
When you run a company as large and old as Toyota, you always hedge your bets. There are some other options to battery-powered electric vehicles (hydrogen IC). They are currently not as mature but anyone running something as big as Toyota needs to hedge against that sort of outlier tech. If Toyota abandoned IC, got rid of its IC production lines, they would suffer hugely if hydrogen IC one out as the green tech. All the major car companies do such things. That's why they have survived as long as they have.
Would Tesla survive if a new hydrogen storage killed the market for battery-powered cars? Toyota has seen and survived a few such revolutions.
Hydrogen as a sole technology is going to keep eating that 2-3x energy penalty versus batteries regardless of storage tech. Hydrogen IC has even worse efficiency than FC. The only exception would be if hydrogen mining yields world-changing amounts of the stuff.
As a hybrid technology, it has a case. If you run 80% of the time on battery and 20% of the time on hydrogen at 50% RTE, you burn 120% of the fuel. But if you weigh 30% less, you could end up saving energy. The up to 60% efficiency of the fuel cell is losing energy as heat, and people like to run the heater, so some of that energy isn't lost in appropriate climates. And of course, refueling is faster for road trips. The best system weight is probably for the experimental direct-ammonia alkaline membrane fuel cells, assuming it's possible to stabilize them, because ammonia fuel systems (about 100 psi) are much simpler than hydrogen systems (about 10000 psi!). So there's a little room left for the hydrogen fans. But it's fundamentally a battery-powered car most of the time.
Bet hedging would’ve meant introducing the BZ4X years ago. Instead, there were 8 years between when Toyota announced their first hydrogen car and their first electric vehicle. This if an example of simply betting wrong.
hydrogen was the right bet for trucks and buses. they are planning hide infrastructure in Asia.
the world is not only southern California and Sweden.
I’m willing to bet hydrogen was the wrong bet for busses too, esp in Asia given the explosion of BEV tech and production coming out of china.
my point is that exporting value added lithium have nothing to do about what is or isn't best. also my comment had a typo. wide not hide
it's as disconnected as building roads and selling aluminum if you have bauxite ore.
Exactly. Toyota's CEO also explained a few weeks ago that they need to build cars for the whole world. Many countries are not ready yet with infrastructure for electric cars.
I would also add since insurance companies don't want to insure the transportation of batteries in container ships, it makes it difficult for Toyota to produce electric cars in all regions, it would mean they would always need to have a battery factory nearby. https://toyotatimes.jp/en/toyota_news/1055_1.html#anchorTitl...
> are not ready yet with infrastructure for electric cars
The same infrastructure they need for everything else in their life. I bet they have way better access to electricity than they do hydrogen. Or even gasoline, frankly. Solar panels are cheap.
> Toyota has seen and survived a few such revolutions.
That sounds really interesting, I'd love to learn more. What such revolutions has Toyota survived?
Globalization is rolling back. It's about to be boom times in America as long as the politicians from all parties can actually move from one troth to another and actually pass bills.
Cars, and EVs in particular have strong protectionist laws in the US that make it more expensive to import vehicles than to build them locally. There are a few other sectors like semiconductor fabs where we have started to introduce protectionist policies but I haven't seen any movement to expand those types of policies to most other manufacturing sectors.
protectionist policies hurt the end consumer more than they protect the workers.
It's already bad to have any sector that is protected from competition (foreign or domestic), why look to expand it?
That's that magic of concentrated benefits and diffuse harms. The inverse is manufacturing workers who suffer concentrated harms from cheaper foreign competition and everyone else enjoys the slight benefit of cheaper TVs.
Seems to be almost daily news stories about huge capital investment in manufacturing in the US, a couple billion here, a couple billion there. Was I just blind to these 5-10 years ago?
Inflation reduction act
No, it's new as of the last ~2 years.
Targeted subsidies, the most recent bill to the IRA may be Cash For Clunkers.
Geopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club.
Economics, Neoliberalism is dead. The pandemic killed it. Policy makers well understand the economy can tolerate a lot of disruption.
Politics: Dispossessed voters turning to fascism has sharpened politicians and sane business leaders minds.
Global Warning and new Tech: Solar, wind, batteries, and the need to faze out fossil fuels creates risks and opportunities. Risks will be born by those that try business as usual.
Increased automation: Low skilled dirt cheap labor is less important than it was 20-30 years ago. That changes the balance point between low cost offshored labor and the pain in the ass that offshoring is.
> Policy makers well understand the economy can tolerate a lot of disruption
If I understand you correctly, this is my reading of the pandemic as well. We suddenly all realized there is a _ton_ of slack in the system. On the individual level, but as well as societal.
Yeah exactly. Instead of the economy being a delicately balanced machine that you don't dare touch. It turned out you can push it really hard and it'll hold together. At that point the idea that if you change industrial policies the whole thing will collapse and it'll be your fault went out the window. Policy makers have vastly more confidence in 2024 than they did in 2019.
Thanks, makes sense. Good evolution too
No. This is simply because the US and other developed economics do not want competition from Chinese companies. Chinese companies are moving up in the value chain which is a threat economically to the US and allies. It's nothing new. It's the same playbook used on Japan.Geopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club.“When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade.” So said US President Ronald Reagan, commenting on Japan.Made in USA (by robots)
> Politics: Dispossessed voters turning to fascism has sharpened politicians and sane business leaders minds.
FYI, many if not most business leaders were Fascist or Nazi sympathizers or at least admired various key aspects of their ideologies.
Don't rely on them doing the right thing.
Not convinced: Not enough workers with the appropriate expertise to outmatch China and there is no appetite to import more people from either side of the aisle (despite what you might hear in the news).
>But people might be more happy walking, biking, etc.
No scenario where division does not increase especially after this upcoming election.
To be fair Toyota has had local factories for the longest time as part of their JIT manufacturing philosophy.
These local factories exist due to automotive manufacturing "domestic content" laws, as opposed to whatever JIT manufacturing philosophy Toyota might have. Pushed by the UAW and signed by Reagan in the 1980's, the US has many foreign car factories in the US as a direct result.
This is of course mostly due to the giant US subsidies the federal government is offering citizens now, but the EV must be "built" in the US (Which has some loopholes and strange definitions in it)
I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
> I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
Politics. Some people want it to be true, so they conflate an easing of the growth rate as an actual rate reduction. It could also be innocent ignorance of statistics.
The real hang up with EVs right now is primarily price. They're just reaching the point where TCO is a wash. Historically, most people are extremely responsive to fuel cost advantages, so as the capital cost comes down most people will switch. At least the ones who can charge at home, which is most.
I do feel bad for people who live in places with high electricity prices, like California and Massachusetts. Makes it harder to win on TCO, but at least the convenience factor is still there. But for those who can access sub-10 cent per kWh pricing, it's nice to spend a few hundred dollars per year for fuel.
> But for those who can access sub-10 cent per kWh pricing
I think you need a blend of solar for that
https://www.energybot.com/electricity-rates/
The cheapest in the country is $0.1122/kWh in Utah. The average is $0.17/kWh
> The cheapest in the country is $0.1122/kWh in Utah
That is demonstrably not true. That tool is reporting "average rates" for each state and excluding time-of-use. E.g. I pay 4.7 cents/kWh inclusive of all grid fees, but only after 9pm. It's trivial to schedule charging for an EV so it happens when you sleep.
Good call out, mistake on my end. Thank you.
What do you pay before 9pm?
but the massive $7000 subsidy should make EVs a lot more competitive?
All, or almost all EV brands in the US are selling less this year than last. Except Tesla, which has about 65% market share.
You know this in February?
The real point is that Tesla has been driving prices lower than other manufacturers are willing to stomach, and that resistance to price matching shows up as cars sitting on lots.
I was looking at Hyundai’s Ioniq 6, but at $38k you get less HP and meaningful/comfort features than my 2015 v6 accord that I bought in 2018 for $19k (now worth $18k).
I only drive like 3-6k miles/yr anyways.
tbf the car market seems to have out stripped baseline inflation in general though.
My neighbor drives an EV and his fuel savings are about $1300/month. He drives a lot.
My understanding is this is model and region dependent. Example: the Ford lightning has tepid demand in a lot of US markets and a multi-year waiting list in Canada. (I realize you're focused on US, but so much of the auto supply chain is coordinated between the 2 countries)
I like the Lightning but as a practical matter it's a little bit of a tough sell. Pickups are so terribly inefficient to begin with that it needs a boatload of battery just to have acceptable range. That's expensive, and also increases the time it takes to charge. I commend Ford for the ambition to make an electric version of their best selling vehicle, but I think that segment will be stronger when 200+ kWh batteries are affordable and flattish 350kW charge rates are the norm.
More Biden policy winning back investment in America, is my take.
Update:
People who may not have been following closely what Biden has accomplished during his Presidency might have questions.
In this case, the Inflation Reduction Act specifically has credits to encourage battery manufacture in the US.
https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th...
More generally, the IRA and the Infrastructure Investment and Jobs Act, and the CHIPS act has encouraged investment in US manufacturing, which is surging.
https://www2.deloitte.com/us/en/insights/industry/manufactur...
US domestic manufacturing became a major theme in the last two prior US elections.
If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
And the Infrastructure Investment and Jobs Act which Biden admin pitched to congress, which also got pretty smooth bipartisan support:
https://en.wikipedia.org/wiki/Infrastructure_Investment_and_...
But it's success will be defined on how successful the factories are, not just how many billions/trillions of free $$ the US gov gives to megacorps to prop up these projects. We've seen many, many gov-incentivized factory announcements that went no where. Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
> Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
Indeed. China had even more examples, but overall they found the winners and boosted them. The US instead defunded and now China produces 80% of all solar panels in the world. It's similar for VC firm, for example, they'll invest in 10 companies and expect only a couple to be profitable.
> If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
Do you have those charts available? I was initially going to give a commendation for pointing out the Trump's administration's role in the Chips act, but... the Chips act was passed in late 2022! "The bill was signed into law by President Joe Biden on August 9, 2022." [1]
What's more, while the CHIPS act was initially bi-partisan, it passed in a relatively partisan vote: "Every senator in the Senate Democratic Caucus except for Bernie Sanders voted in favor of passing the CHIPS Act, and they were joined by seventeen Republican senators" [1]
Bottom line, seems like this bill was presented to Senators* in 2019 and then took time to work its way through Congress. It does not seem the Trump admin had much to do with this (I would more says the CHIPS act was seeded from an initial bipartisan effort that originated in the Senate; there's no mention I see that the executive branch had anything to do with it in 2019; if anything, it seems that congress of 2019 and whatever role the executive had at the time both _failed_ to get the CHIPS act through; it was the next congress that got it done in 2022)
[1] https://en.wikipedia.org/wiki/CHIPS_and_Science_Act
* I'm not entirely sure if 'presented' to senators means there was an executive branch role. My reading of the wiki article is that it sounds like the original 2019 bill originated in the Senate. I just don't see anything that mentions the executive's role in 2019 or 2020.
You can find the growth charts here: https://home.treasury.gov/news/featured-stories/unpacking-th...
but these charts/analysis come from the White House so they are going to be a bit biased (how much is proposed vs real, etc).
I don't really see the value in debating the details of the policies as it's pretty clear Trump made rebuilding industry his #1 message, which was later co-opted by Biden in the 2nd election. Trump was just an utter failure at working with (a very hostile) congress and COVID destroying factory construction didn't help private industry either, or public spending priorities.
I also take issue with the idea China's success in manufacturing was a result of the gov choosing winners = a good thing. Gov as a giant VC sounds like a horrible idea, here in Canada they tried that in tech and it was an embarrassment. China's mass urbanization, huge cheap labour base, a culture of hard work, and the West happily destroying their own industry...it's easy to 'pick' winners in a flush market.
Rebuilding a dead one is different story.
Those charts seem to indicate a spike after the CHIPS act was passed, rather than when it was proposed by the two bipartisan US senators in 2019.
> I don't really see the value in debating the details of the policies
> Trump made rebuilding industry his #1 message
Not debating policy. I don't see the evidence that Trump is linked to the CHIPS act. While that might be his message (as you claim), the evidence of him doing anything for that relative to the CHIPS act is lacking. The attribution beyond two bipartisan senators proposing the CHIPS act in 2019 is so far without evidence. Further, when the CHIPS act did pass, it was despite Republican opposition. In essence, there doesn't seem to be any evidence Trump had anything to do with the CHIPS act other than holding office while it failed to go anywhere in congress.
> I also take issue with the idea China's success in manufacturing was a result of the gov choosing winners = a good thing.
My claim is that without Chinese government support, China would not be producing 80% of today's solar panels. According to 'ucigcc', the Chinese government played a big role in creating a domestic market (demand) for solar panels. [1] Further: "Credit lines to expand manufacturing capacity were brokered and backed by local governments and state-owned firms, even in the years after the global financial crisis when the collapse particularly of European markets led to overcapacity in global solar markets. " [1]
Taking stock from [1], the Chinese government induced demand for solar panels (subsidized them), and supported the industries producing the solar panels.
From the same reference: "In 2015 the central government launched a so-called Top Runner program. Top Runner projects injected incentives to deploy advanced solar PV technologies and retire the production of dated technologies. Module cost continued to fall because of these incentives, while module efficiency continued to increase. Particularly installations of high-efficiency panels in Western China were able to achieve grid parity because of those incentive changes, yet broader issues, including the perpetual underfunding of the renewable energy fund, the low profitability of domestic manufacturers, overcapacity, and broader trade tensions remained unresolved."
The reference does not 100% back my claim, but I would say strongly supports it. It's hard to see the Chinese solar industry being the same without all of the government support.
> Gov as a giant VC sounds like a horrible idea
On its face, sure. Though, when there is a war or during the pandemic this cames into play. That is an extreme example, there are less extreme examples. In these extreme examples, the government shifts market forces by implementing price caps and forcing production. Governments do similar in less heavy handed ways all the time.
Reference [2] supports this notion, there is a history of governments selecting strategic industries, supporting them, creating demand for that industry - and then once seeded the industry has legs to run on its own. To do this, Governments can create entire markets, which in turn creates enough demand for suppliers to come online.
From [2]: "The emerging U.S. advanced battery industry represents a bold experiment by the federal government in direct financial support of private companies to establish a domestic manufacturing industry."
"The photovoltaic industry is an example of a U.S. high-tech sector that has lost global share but has a solid opportunity to re-emerge as a leader with the right mix of federal and state policy support. In the case of solar power, a deciding factor will be whether the United States will become a big enough market to support a large-scale, globally competitive manufacturing industry. Federal and state incentives will be essential for the next few years, until the cost of solar energy can compete against electricity generated from fossil fuels without subsidies. Another question is whether U.S. companies that focus on products incorporating promising new technologies will be able to survive surging imports of low-cost photovoltaic cells and modules based on mature technologies long enough to attain economies of scale. "
"This turn of fortunes is primarily due to strategic moves and investments in new technologies by U.S. semiconductor manufacturers. Yet, their success also rests on the important contributions of U.S. policy that was driven by an engaged industry. There were two additional interrelated elements to the U.S. success:10 The research consortium SEMATECH, a $200 million-a-year research effort co-funded by the federal government and most large American chip companies, accelerated productivity and innovation in semiconductor manufacturing based on a common technology roadmap and enabled a rapid decline in prices.11 Persistent trade negotiations and enforcement of previous agreements won commitments from Japan to open its market to U.S. semiconductors and curtail dumping in any world market.12 This was deemed essential to prevent the United States from becoming a high-priced island in a sea of underpriced semiconductors. Had that occurred, it would have severely disadvantaged downstream American electronics equipment producers compared with competitors producing abroad utilizing lower-priced dumped chips."
"The decline and resurgence of the U.S. semiconductor industry offers many useful lessons for policymakers and industrialists grappling with how to bolster other American high-technology sectors facing intense international competitive pressure. It shows that erosion of U.S. leadership in manufacturing is not irreversible as long as both industry and government are committed to cooperative action, both on trade policy and in well-designed research programs that will lead to innovation"
What are some examples of this? Tax-credits is a big one. Think of Tesla, sales were boosted because there was an EV tax-credit. Further, there is actually no Tesla without the US department of Energy. "In January 2010, the Department of Energy issued a $465 million loan to Tesla Motors to produce specially designed, all-electric plug-in vehicles" [3] Without that loan, Tesla would have been toast.
> China's mass urbanization, huge cheap labour base, a culture of hard work, and the West happily destroying their own industry...it's easy to 'pick' winners in a flush market.
While that might all be true - when China was building its solar panel industry - the market was not flush. To your point, the Solyndra example and the subsequent divestment are good examples of the US destroying its solar industry. The lack of subsidies for solar panel meant demand and production remained anemic, meanwhile there were strong subsidies given directly to oil companies. The USG effectively cut-off the tap before demand picked up, why would then any US company produce very expensive solar panels with nobody really to buy them? Now that the price has come down, China just dominates, it was their innovation and supports that created the conditions for that to happen.
> I also take issue with the idea China's success in manufacturing
I am being specific to the solar industry. A broader generalization to all of manufacturing would need its own evidence. Yet, there are broad over time and across many governments, examples of industries that got their roots from government support. The solar example is very salient because it was so notable with Solyndra and then the US not strongly supporting renewables, and then lost out big on that industry.
[1] https://ucigcc.org/blog/how-solar-developed-from-the-bottom-...
So, one of the great things about the IRA is that it specifically carves out a space for start-ups and not just established firms.
Yes, but the CHIPS act was also signed by Biden. I think we can fairly credit him for seeing it through. Trump talked a lot about bringing manufacturing back, but he did not have the self-discipline to actually see any of it through; legislatively, Trump is a master of self-sabotage.
But it is true that the CHIP had bipartisan support, but the ones who supported it were not MAGA types, but people like McConnell.
Trump was the first president with no political, military, or even lawyer experience. And it showed, badly, when it came to congressional policy making.
But he no doubt was a major reason domestic manufacturing shot to the top of Biden's election priorities, after it was a major sticking point that Trump fared far better with the working class vs Hillary.
Even Michael Moore conceded back then that his messaging around rebuilding gutted industry was far better, so it's not surprising it was co-opted.
Which is a good thing, what matters is listening to people and getting results at the end of the day.
This is just not true. Trumps tariffs have been one of the biggest motivators of reshoring, which started under him. Yes the chips act is also great, there is no need to pretend one guy was useless and the other did all of the work its bipartisan and the two presidents work in this arena has complimented each other.
I'm left of Bernie and voted for Biden but I tend to not like takes like this. Is there a specific policy that he championed that is responsible for this? To me, it's like when people cheer a 'record stock market' as an example of a president's abilities, but fail to mention every single modern president has had a record stock market at some point in their term.
Yeah, the Inflation Reduction Act.
https://www.orrick.com/en/Insights/2022/11/Section-45X-of-th...
More generally, the IRA and the Infrastructure Investment and Jobs Act
https://en.wikipedia.org/wiki/Infrastructure_Investment_and_...
https://www2.deloitte.com/us/en/insights/industry/manufactur...
There's also the CHIPS act.
By the way, anyone active in the green tech space knows that the IRA has been an absolute game-changer.
Wonderful! Thanks.
> Is there a specific policy that he championed that is responsible for this?
This was something the President activity campaigned on (Build Back Better), pushed through Congress, and signed into law as The Inflation Reduction Act.
While it did little to reduce inflation (outside of medicine), it was a massive win for people who wanted more investment in clean power generation, more funds for the ACA, lower drug prices, and higher taxes on certain corporate entities.
Several battery factories that were planned in Norway have scaled down their plans or have been cancelled due to the much better incentives in the IRA.
An interesting contrast showed up in my RSS feed regarding this subject:
First this HN post: Toyota to invest $1.3B in Kentucky factory to build battery packs and new EV
A few lines below that: Toyota Refused To Hop On The Electric Vehicle Bandwagon, And It Paid Off Big Time [1]
We'll see where the chips fall but thus far it seems Tesla is one of the few western companies which manages to profitably produce and sell consumer EVs. I suspect Chinese companies like BYD run at a profit as well but it is hard to get access to reliable data. Volkswagen seems to be aiming for 'profit parity for EVs' in 2025 but they seem to have a long way to go [2].
[1] https://dailycaller.com/2024/02/07/toyota-2023-fiscal-year-3...
[2] https://www.reuters.com/business/autos-transportation/volksw...
Ford made these same promises 2 years ago then bailed when the interest rate rose.
>Ford made these same promises 2 years ago then bailed when the interest rate rose.
Sometimes investment makes sense, and then things change and it doesn't make sense anymore. That's fair, isn't it?
Fair? What would that even mean?
These empty promises are how we ended up electing Trump the first time and it's virtually guaranteeing that we'll elect him a second time.
Rural Kentucky is in horrible shape and a lot of people here were placing hope in this, much like they have so many other empty promises from their leaders, so at least stop acting surprised when the consequences show themselves.
He means that companies exist to make a profit, supply customers and their needs and to pay employees.
If they make a promise to spend money and economic conditions change to the extent that they would lose money, it makes sense to not continue with that commitment.
Comparing a company making a profit with a politician trying to get elected is not fair.
That's not how promises or commitments work. It's true that that describes the behavior of profit maximization engines, but the language of your justification implies wrongdoing.
>Fair? What would that even mean?
It means you can't hold it against a company if an investment no longer seems profitable.
Blame your politicians, who feel the need to hold a ribbon cutting ceremony before anything is signed.
> Rural Kentucky is in horrible shape and a lot of people here were placing hope in this,
"Rural KY" is not all that big, a couple million people, if that, and solely exists to the rest of the US for low-key victim-blaming election cycle human interest dreck.
These news stories about manufacturing expansion are all about development just outside large towns and cities, like bowling green, louisville, cincinnati, ... and will draw similar demographic than if they were in Texas, Georgia, or North Carolina.
And fwiw, just nitpicking, "rural ky" can also include the bluegrass, and that's just plain comfortably rich.
It's not a mirage. Manufacturing investment is happening.
https://www2.deloitte.com/us/en/insights/industry/manufactur...
Mostly in red-states, tbh, because they have fewer regulations slowing down building stuff.
Also, Trump is a prove loser who will lose again.
I was wondering how the manufacturers address the potential culture conflicts. Obama's documentary American Factory revealed two notable contentions. One is that American workers think that the management is too tough on them while the management think that the workers are too unreasonable. The other is that Chinese workers are 30% (or 2X?) more efficient than American workers. I have no judgement on the first contention, but the second worries me. American labors were known to be the best in the world many years ago, and a strong argument against offshoring manufacturing was that Chinese workers were much worse than Americans. Yet the tide has turned.
I don't really follow what you're trying to say with your last sentence and I'd be skeptical of a claim that Chinese workers are 30% more efficient, but Toyota, Honda, Nissan, and others have maintained US manufacturing facilities for decades and seem to be doing just fine with any potential culture conflicts.
The 30% number you cite could be true but perhaps in order for Chinese (or any other country) manufacturing to be economical perhaps it needs to be 60%. Mexico is actually important here.
Toyota has manufacturing facilities in at least 16 countries, so they probably have this figured out. US import duties make it especially lucrative for manufacturers to have US facilities, which lines up with Toyota having 10 other facilities in the US, plus some in Canada and Mexico.
Still, in my eyes that only makes it more intriguing how they bridge the cultural differences, since whatever they are doing seems to be working.
> claim that Chinese workers are 30% more efficient
I was just quoting what the documentary said. There was so much contention between the management and the workers in the American glass factory featured in the documentary. In the end, the management hosted a competition between the American workers and the Chinese workers. Chinese workers won with a big margin.
Yep. It's a great documentary that I enjoyed watching, but I think we need stronger evidence here. Documentaries are not necessarily factual, and they often times have an angle despite the idea that they're just producing factual content/stories.
Showing that the Chinese workers won by a big margin doesn't prove anything. It definitely doesn't prove anything outside of that specific scenario.
> The other is that Chinese workers are 30% (or 2X?) more efficient than American workers.
What metrics is this based on?
The "two countries with very different labor laws" metric, I imagine.
> American labors were known to be the best in the world many years ago
I'm pretty sure every country says that about themselves. It's more a statement of national pride than of fact.
I doubt that will be a problem here. Their Kentucky plant is huge, it's been around for decades and it makes lots of high quality cars including the Camry. Toyota goes to a lot of effort to teach the workers their production system and culture.
Forcing people to eat off the Dollar menu has consequences
I am curious about what vehicles these will be for. When Toyota says “EVs” they often mean hybrids. The article makes this distinction, but Toyota didn’t in any statements.
The e-TNGA platform that underpins the BZ4x was supposed to have several more products built on it, including a larger SUV. This vehicle could be that SUV, or it could be one of the first products built on the platform that will replace the e-TNGA.
The Georgetown plant currently produces Camry and Rav4.
In the US, some PHEVs with relatively small batteries can qualify for the full $7,500 tax credit.
You might be on to something there. It would certainly explain the size of the investment. A $1.3B plant might not build a lot of EVs, but it could build quite a few PHEVs.
Specifically it's 7kWh minimum in addition to all of the other sourcing and assembly requirements. In practice there haven't been any PHEVs with less, the smallest PHEV battery so far in the US is 8kWh in a Ferrari. It'll be interesting to see if more small battery PHEVs come out trying to target HEV price points with the tax credit. It would still be a huge jump up from standard hybrids which as far as I'm aware are rarely more than 1.5kWh.
kWh makes sense if your goal is to stimulate US battery production but I really wish there were an all-electric range requirement, A hypothetical 6.8kWh Prius Prime would get more range that the 21kWh Wrangler 4xe.
https://www.irs.gov/credits-deductions/credits-for-new-clean...
Yeah, and the 7kwh should cost ~$1k. So if the manufacturer wants to maximize the number of $7,500 rebates, PHEV is the way to go. 11 PHEVs == one 300 mile compact crossover.
They don't even have to be good PHEVs. I agree that there should have been a range requirement.
The Kentucky plant will produce the upcoming 3-row BEV called bZ5X. Additional BEVs have been announced for 2026 and will likely share battery components from Kentucky and the new battery factory being built in North Carolina.
Why companies put factories in states that actively go against the products they build is mind boggling.
Is this to make the solid state batteries that Toyota has been hyping up for a decade?
Are there issues with these factories? environmental? safety?
How much does Toyota pay in taxes in Kentucky or are we subsidizing the factory?
I don't think there is such thing as manufacturing investment without subsidization any more.
And it most often results in the Winner's Curse: the entity providing the greatest subsidies win's the "investment", but they give up so much in the process that the economic benefits are wiped out.
See: Tesla in Buffalo, VW in Ontario, FoxConn in Wisconsin.
I'm not sure if I agree, tbh. You've certainly brought up some good cases of failures, but what about:
Tesla in Sparks NV, BMW in Greer SC, or Mercedes in Alabama and SC? It seems like those have more than paid for themselves by now. In at least one of those cases, they've had huge regional impacts.
>Tesla in Sparks NV
Ironically, you go to the website and there's a fake image of the factory, based on previous promises.
I can't speak to the others, but I'm sure there's some positive outliers!
Why assume they are outliers? It seems like there are more successes than failures, just that the failures get attention.
>Why assume they are outliers?
Because when the government hands tax money over to profitable companies to "create jobs", you are inherently distorting the market.
>It seems like there are more successes than failures
Maybe, but I'm skeptical.
Foxconn in Wisconsin is the one people love to mention.
AFAIK - they got $3B in FUTURE benefits - of which none came to fruition.
Foxconn delivered nothing and also got almost nothing (~1% of that $3B).
Yeah - it was a dumb political stunt - and it unfortunately worked for the time. But it wasn't the massive financial disaster people think it was.
Overall, yes. But I suspect there are winners if we could follow the money trail.
It's true globally too. China heavily subsidizes their industrial base as do many other countries.
When everyone else is subsidizing you have to subsidize too or you lose.
You can have tax policy that makes up for unfair subsidies or simply block those countries from your market.
The first is a subsidy by another name. The second has a lot of knock-on effects unless you own the whole supply chain, and nobody does anymore.
"KEDFA approved the $43.5 million tax incentives shortly after the Toyota expansion announcement was made Monday. The dollar figure combines the incentives from the Lexus expansion in 2015 with the latest investment for a total of $190 million in incentives, said Jack Mazurak, communications director at KEDFA.
https://www.kentucky.com/news/business/article143755074.html
I don't know how much they currently pay in taxes, but when Toyota built the plant in the 80's, Kentucky gave $125M in incentives. https://en.wikipedia.org/wiki/Martha_Layne_Collins#Toyota_As...
Let’s be honest. Southern state probably lured them in with a nice package.
Toyota has been moving ops to states with lower cost of living for awhile now. Toyota corp in USA shifted ops from CA to TX a decade back. Many workers hate or regret the move. C-level executives are excited because they pay less in state taxes. Probably even got a nice deal on the land.
Toyota broke ground in San Antonio more than two decades ago, in 2003, not one. Georgetown KY has been around since 1986 and Princeton IN since 1996. Toyota has been investing in “low cost of living” states for a very long time.
How much is the currently empty field where the factory will be built currently contributing to tax revenue?
lol #41. Kentucky [0] Percentage of registered vehicles that are electric: 0.06% Total registered electric vehicles: 2,650 (#33 overall) Number of statewide charging stations: 222 (#37 overall) Number of charging ports per 100 EVs: 19.9 (#21 overall)
[0]https://www _ copilotsearch _ com/posts/states-with-the-most-electric-vehicles/
TMMK (Toyota Motor Manufacturing Kentucky) has an $8B plant in Kentucky, the largest Toyota manufacturing facility in the world. This plant is where all Camry models are manufactured, which is the best-selling car in the United States. Additionally, all Rav4 Hybrid models are manufactured there, including all the motors (not just assembly).
Seems like a smart place to build your own batteries to me.
#44 in income. That's the real reason to put a factory there. And it's a good reason why EV adoption would be low there as well.
On the bright side, some manufacturing jobs brought state side. On the other hand, it’s in KY. These multibillion dollar deals tend to land in states with the lowest cost of living, non-educated workforce, minimal enforcement/respect of environment (dump waste into rivers), and tend to be subsidized at the state and local levels.
Apple opened up shop outside of Austin (ie, not Travis County) because of lower taxes and more incentives provided by other county. Multi Trillion dollar company by the way. Amazon has been opening up warehouses in the sticks, soaking up all of those incentives from those desperate small towns looking to giveaway the land for a couple of decades in exchange for short term gains (mayor/city council able to say, we brought X jobs to Y town!1). Yet another multibillion company taking advantage of the desperate.
What do the people get in return? Getting the opportunity to work shit hours in a non-union job. Possibly back breaking work. No investment in their future. Just cogs in the wheel which are completely fungible (broke your back? File a claim with insurance. Fuck off. Deal with it. Not our problem. Then hire the next sucker to replace you. Rinse and repeat)
Yeah, those poor towns should just remain poor, definitely don't spend a billion dollars there, that would be terrible for them.
State environmental laws can be more restrictive than the Federal but not less, so if anyone is dumping into waterways the EPA can go after them.
Don't know of many waterways that are solely in one state so the EPA automatically has jurisdiction as well.
What is it that you are purposing? That companies don't go to states with low cost of living?
The idea that "it's KY" is bigoted. They are people, just like anyone else. We don't tolerate it when others are dismissive of people based on their race and we should not be tolerant of the attitude based on where they live either.
They should unionize. In fact UAW wants to unionize all automakers including Tesla and the ones in the south. They failed in the past but with the downward trajectory of population size, there is a great opportunity here.
Now you might say they will just leave the US and manufacture elsewhere. Well thats where tariffs come in and the UAW is a core voting block so they will have to alter any plans to move to Mexico. Higher inflation will be the result but its probably worth it long term.
> They should unionize
No one at these Toyota facilities has an appetite for that. The benefits package and overall lifestyle for a TMMK worker is quite nice compared to the average person in the Lexington metro and the jobs are competitive.
Perhaps ironically, when I was in school, the biggest issue was finding engineers that would accept the pay which was generally lower than guys on the floor.
Well just 20 mins ago we heard that the majority of people at the VW plant in Tennessee signed UAW cards. Now this wont guarantee a successful vote but it makes the leadership give an honest attempt so maybe times might be changing for the Toyota plants as well.
[1]:https://thehill.com/policy/transportation/4454085-uaw-says-m...
Volkswagen is not the same company as Toyota. For all we know, work conditions and benefits packages between the two organizations vary considerably.
> non-educated workforce
Sorry, but to be frank, you just don't know what you're talking about.
I did a co-op at TMMK in Georgetown, KY many moons ago and it was a short drive from Lexington where I was studying for my mech engineering degree at UK. It is a massive university with a solid engineering school, for the uninitiated. The metro also has an excellent network of technical colleges and during my various other stints over those years, I was always impressed with the quality of the workforce on the factory floors.
As someone born in the coalfields of Appalachia, I'll admit that the ignorant hillbilly stereotype has some merit, but that's two hours of interstate driving east of where this is happening and the cultures have almost nothing in common. Hill people don't really leave the hills and Lexington is quite the "big city" for where I come from, full of hifalutin Whole Foods shoppers. I think the series "Justified" does a good job of describing this phenomenon.
There is a lot more I could address about your thoughts on labor and poverty, but it's hard to move past your premise and I don't have time to write a treatise... but JD Vance did and it's pretty good.
Have you ever actually been to the Lexington metro? It's not really any of that bullshit you just wrote.
Agree that often politicians sell out their people and natural resources (the rights and endowment of future citizens) for short term gain. This is a natural consequence of politicians being inherently terrible people by and large.