Why Tesla is losing share in Europe

Ev's this morning Tesla seen a bit of weakness overseas with the worst month for EU sales since January of 23. Pretty different picture in China though expect driven higher by some strong sales and its latest results. Our next guest does warn that a Chinese monopoly in the EV market could threaten the country's economic security. Joining us here at Post 9 is DVX Venture CEO John McNeill, also a former president at Tesla and presidently a board member at GM. And Lulu. It's great to have you in. John, thanks for calling. What do we make of the EU registrations? Is it telling us something about the market or the company or share or something else? I think it's telling. It's it may be a picture of what's to come because in EU, in the EU you've got a lot of competition. And so really the only EV choice for years in the US has been Tesla. And in the EU you've got a bunch of alternatives now from all the big makers and they're gaining share against Tesla. So you see Tesla's registrations down, but EV registrations overall up. So Tesla's losing share in that space. The difference, the competition from China in the EU, there is some competition from China and EU. Clearly BYD is there in a big way, but it's also the really strong competition from the European makers and the Scandinavian makers, including Volvo. You think it's about price, It is about price at the lower end of the market for sure, because BYD has these lower price offerings that are really popular, especially in Southern Europe, in countries like Spain. So what happens now, especially in light of a recent quarterly call where Elon says if you're in a in the stock for a being in the car business, you might want to look elsewhere? He means that. I think he does. Yeah. He's going all chips in on autonomy and I think he sees that competitive battle coming. And and the battle may not be E VS in the future, maybe shifting to autonomous vehicles or AVS. What what? What happened to the EV future? I think the EV, like the EV future is alive and well. It's a $70 billion business already in the US And when you combine the EV sales, the new car EV sales, with the used car EV sales in the first quarter, remember, Hertz unloaded 10s of thousands of EV's on the market. Used EV sales shot up 45% as a result. And so when you add new and used, you've got significant EV demand. And that'll shift, It'll rotate back to new car, new EV demand, you think so, but there are questions about whether or not questions. But when you look like EV demand was up again in, in April and that doesn't include the used cars. So once the used cars sort of dry up that that demand will rotate back to noon. Can we ever do E VS like they do in China at the same price point and the same quality? It's really difficult because there's about $28 billion of subsidies into the EV market in China by the government. So free factories, interest free loans in very low cost labor. And so it gets very difficult to compete at that price level or that cost level from the US, which is why it's really important, a lot of people believe to protect the US manufacturers from that. They've been a lot of, you know, Goldman did a report I think just a couple days ago looking at purchase intentions among EV buyers and Tesla is lower than rivals. Why do you think, is that about price as well or do you think there's there's something cultural going on with the brand? I there's clearly a lot going on with the brand. About 80% of Tesla sales over the last few years came from very blue zip codes. And so there's a rotation coming out of that demand, I think to other makers. So it is, I think it's a there's a lot of a brand story there. It's somewhat of a price story, but a lot of a brand story. Can you talk about what optionality exists now at GM regarding the ICE business or the EV business? So it's nice at GM to have both options, have the ICE business funding the transition to EV. And on the EV side, they've got 20 E VS in the 20 to $30,000 range, 30 to $40,000 range that are just coming to market literally this month. And so now we're going to see a real alternative where after tax incentive, you've got a 29,000 dollar, $529,500 Equinox. It's a really nice car and a lot of us have been driving it and have fallen in love with it. It's 310 miles of range for that price. And and do you think the last question on the charging network in general does, does Tesla's D emphasis of that business mean that there's more going to be range anxiety as a result? That was a real head scratcher letting that whole team go on a on a critical piece of Tesla strategy. But the US and foreign manufacturers have come together to form their own supercharging network called Iona and they're now rolling out Superchargers. So I think you see a shift now in the responsibility from Tesla building that network to now all car companies building that network. But we've got to get ahead or at least catch up to demand so that we can we can offer that that charging everywhere. Does the industry expect any, any changes if we do get a change in the administration after the elections or change in Congress given the IRA, given the emphasis from the Biden administration on E VS. There's a lot of, I think I've thought about that and really close watching what's going to happen with the control of Congress and where that may go. I mean we have through the IRA really had a significant movement of bringing the supply chain for E VS over to the US in a way that we weren't able to do is just Tesla alone. And so that is going to have significant impacts on the industry. So if the IRA gets reversed or walked back at all, does it change GM strategy? I think we risk losing the auto manufacturing share to China. We really do globally. And so it's a very, it's it's a bipartisan discussion that ought to be had for sure. Yeah, there's a lot, there's a lot riding on the auto cycle at the moment. John, help thanks for helping us understand a little bit more. You bet. Good to have you on. You bet, John, to be here.