Is Electric Vehicle Demand Cooling Off?

I was talking a short while ago about how growth in electric vehicles has cooled off and how hybrid vehicles are taking off. What did you see in terms of the mix at the auto show? Do you feel like car makers are going to have the right mix of vehicles for this moment or are they over electrified? I think, you know, to answer the mixed question in two ways, I don't think they have the right mix because one of the big problems in the US is there's too many expensive electric vehicles in depending on how you count Tesla's and all these sorts of things, which is officially a luxury brand. 25% of all the luxury cars sold in America are all electric. So these are cars that are fifty $60,000. So that market is over saturated and some of the ones you see at the show and the ones that they're bringing out are still expensive cars. We sat in a in a pole star four. That's actually they're lower priced SUV that'll be more like $60,000 Volkswagen ID 7 very nice car be a little more expensive. So that is problematic for the US market in terms of the mix of electric hybrid and traditional vehicles. You know, automaker by automaker, it's a little different. Ford has a complete line up. General Motors is a little light on the hybrids. Toyota way more focused on hybrids, not really focused on electrics. They they do have a couple of models. So for, for the country at large, you know, the mix is fine for each individual automaker. It's a little bit more of a nuance story. Well, if I understand correctly, Tesla has cut prices on its existing vehicles, but it has also said that it's reaching the sort of natural limit of how far it can bring down costs to manufacture those vehicles. So maybe the cost cutting is done for now and it we're waiting for that next cheap vehicle. Have I got that right? Yeah, I think so. I mean, their operating profit margins fell, you know, 10 percentage points year over year in the fourth quarter and they're below 10%, they're below Toyota. So you you would expect them to say, well, we're getting to the limits of pricing. But it's always like another reason they say that is because you know, you cut prices by 10,000 bucks and oh look, you sell 100,000 more, fly out the door, you cut prices by another 5000 bucks and you know, nothing happens, right? It becomes, and I think that's created this stir in the auto industry. Why would you do that? Car companies tend to do things, you know, in a little more measured way. And Elon started saying things like, I can sell as many cars as I want. I just have to modify the price. Demand is infinite if my price is 0. You know, like he was making these, you know, like, I just went to economics 101 class. And I think he sort of learned that it's not actually exactly like he thinks. There's sort of a mix of pricing and incentives and even, dare I say, advertising that's better than just slashing prices every day. Is it? Alda Root at barons.com for those angry emails. Dow Jones, Tesla famously does no advertising. I and and these price cuts have costed 2530 billion in sales revenue. You know, you could spend a lot on ads that is less than 25 or $30 billion VW Bus, The the classic bus is coming back and what, what, what does it look like? What did you see? Tell us about it. You know, so that stub nosed, you know, no hood. VW bus is back in all electric form. It's on sale in Europe. It's coming on sale in the US this year. They brought it to the show it it's pretty cool. It's called the ID Buzz. So now the Volkswagen bus is the ID Buzz. I don't know why Idid. It means it's electric. If you buy a Volkswagen, somebody came up with that, you know, so it's 2 tone color. It has an electrochromic roof. So you can make it's all glass. So you can make the roof clear or you can make the roof opaque, you know, so it's this, you know, these sorts of cool features. The thing about from a, from a, from a, from a business perspective, this is a different form factor for an EV true 7 seater, very comfortably seat 7 huge seats. It's a van and it was a pretty cool car. So we'll see how it does. But that that was a highlight. That's not in the hypercar range. It'll be more modestly priced, probably in the 40 to 50. I wonder if that'll sell well. Do you think that that's, I mean, it's too weird maybe to sell well, right? It's probably more of a niche vehicle, you know, 10s of thousands of units a year. But you know, when people see them, they'll think they're cool. And you know, if it's really cheap, maybe it'll sell better. It's quirky. And my sense is that a typical family doesn't want to be quirky with their $40,000 vehicle. You know, maybe your socks start with your socks, buy some quirky socks and show those off at work. But your vehicle keep that more mainstream.