We all know that the world of autos is changing from gasoline engines to electric engines, we know that something the tipping point happens but what happens to the gasoline engine vehicles and since most of us drive gasoline vehicles what should we drive? Those are big questions because the price of the electric vehicles is not less or equal to the gasoline engine vehicles, it is more, yet many people would like to buy electric. If you invest in an auto company – GM, Ford, Chrysler or BMW, Mercedes, Toyota, Honda, or Tesla what does those companies do.
In an article by Tim Kelly of Reuters, Toyota Motor Corp, which is the world’s largest car maker is committing $90.4 billion to electrify its automobiles by 2030. If all goes well, Toyota will have total sales of 1/3 of its lineup in electric.
Toyota Chief Executive Akio Toyoda said his company was planning a multipronged carbon reduction strategy that includes hybrid cars and hydrogen-powered vehicles. He said we want to give people a choice and we will wait until we understand where the market is going.
Toyota is building a $1.29 billion battery plant in North Carolina to open in 2025.
It is important to note electric vehicles have fewer parts than gasoline vehicles which means as the world shifts and people start buying electric, supply systems have to shift and jobs in the auto sector will go down. In Japan. there are 5.5 million auto jobs that will go down significantly.
Linking to dividend paying stocks, in some industries what we want and what we buy can be different. We may want an electric car, but the sticker price says we buy a gasoline car or truck. Vehicle makers have to meet demand of what we actually buy, not what we want, it is an interesting industry to be in when the public and government want something but the public is not quite buying yet. Auto companies will need to having this balancing act between want and need, actual sales and desired sales, profits and doing their part on climate change, what will the the correct approach?
There are more questions than answers, till the next time – to raising questions.