Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Prices Are Down 1% Off Of Their Highs But…
Most experts are saying used car prices are coming down, with Manheim saying wholesale prices are down 0.1% year-over-year and Edmunds showing a 1% decrease off their May highs, according to this story from the Associated Press. That’s all well-and-good, but what if you need a car now? From the same AP story: It’s so bad that people are out here trying to salvage Chevy HHRs even if it kills them. It’s worth noting that there are still decent options for people who want something cheap, as we discussed with Kevin Williams on our latest podcast. Similarly, rental companies haven’t been able to buy many new vehicles. So eventually, they are selling fewer autos into the used market. That’s crimped another source of vehicles. And because used cars aren’t sitting long on dealer lots, demand remains strong enough to prop up prices.
BYD Saw A 350% Increase In Q3 Profits
Q3 numbers have been mixed as no two automakers have had identical reactions to two years of supply chain disruptions, inflation, fed-rate adjustments, and the latest season of Great British Bake Off. It’s rough out there. Unless you’re BYD. The company’s Q3 report is out and, per Reuters, BYD made $789 million, up 350% from a year ago. That’s not just a fluke, profits are up 281% for the first nine months. How’d BYD do this? Well, it’s now the biggest EV company in all of China and they’ve been spanking Tesla lately. As the South China Morning Post points out, this is at least partially due to their pricing strategy: I continue to be skeptical about hydrogen in regular passenger cars, though I’ll be happy to be wrong about their prospects. Certainly there are real possibilities for trucking and aviation, but it’s not where I would be as an automaker. BMW, though, is still super into it. Our pal Hannah Elliott at Bloomberg chatted with BMW’s chairman Oliver Zipse at Goodwood and he doubled down on hydrogen: Hippest? ORLY? He continued: I definitely buy the argument that being wholly dependent on one type of drivetrain creates problems (much like Germany being addicted to Russian gas) but I’m not sure that hydrogen is going to do better than hybrids.
EU Bans New Combustion Cars From 2035 But F’Real This Time
It seems that the EU has maybe overcome Germany’s intransigence over a full-gas ban by 2035, if I’m reading this Bloomberg article on Automotive News story correctly. Germany was going to reject the move, but I guess they’re not, now? The deal pushes for 0% emissions by 2035 and a 55% drop by 2030 compared to 2021 levels. Oh, hey, it’s good ol’ Oliver Zipse again: Sure. I think the “framework conditions” might include a lot of money to subsidize hydrogen? Just a guess. My favorite part of the article is this: “These include an abundance of renewable energy, a seamless private and public charging infrastructure network, and access to raw materials,” Zipse said. Don’t threaten us with a good time! It’s a fair point, with car prices staying high for a while, but electric cars also work and the issue isn’t so much the vehicles as the consistent source of power for them.
The Flush
It’s pretty obvious by now to some that Bloomberg Opinion contributor Matt Levine’s style is highly influential on what I’ve been doing here. It’s good! Read him! In particularly, I’m slowly working my way through his 40,000-word epic on crypto currency. It makes me wonder: Do you expect to ever buy or sell a car using crpyto? Have you? Do you have any BTC or ETH? Photos: Nissan, Chrysler, BYD, BMW, EU Commission https://www.washingtonpost.com/world/2022/10/05/europe-blackouts-energy-crisis-ukraine-russia/ Either that or they are going to change their tune on Nuclear Power and build a bunch of reactors between now and 2035. If that’s the plan they had better get started PDQ. A dozen years to design, site, construct, and get a new reactor up to full speed is just enough. Havana Effect is a pretty catchy way to describe poor people being locked into barely keeping outdated shitboxes working because of government action. Might have to borrow it. As painful as that sounds, consider that a week after I cashed out the coins from MtGox, it was hacked and I would have lost everything. So now she has a multi-million dollar ring and a fun story. My car was worth $19k trade-in in late 2019. It was worth $26k trade-in at the peak. It is worth between $21k and $23k trade-in now. Dealers appear to be buying cars for less but still advertising them for the higher prices. I expect within 12-18 months my car will be worth $19k trade-in again. Hydrogen powered cars have been five years away for the last 20 years. I don’t expect that to change much for the next 10 years. My co-workers and I were talking about what it would take for mass EV adoption to be successful. Think about a person who knows nothing about cars. A person who only knows to add fuel or do any maintenance/repairs when a light comes on. Now put them in an EV today. Until the charging networks get to the point where we don’t need to think about charging until a light turns on, those people will fail. That applies to both crypto and hydrogen. It’s frustrating to realize how poorly business elites and political leaders have performed over the last 25 years – to the point where a company remembering a centuries-old basic tenet of modern economics seems like a radical innovation that’s creating stunning success…. https://www.youtube.com/watch?v=YQ_xWvX1n9g He’s wrong. And he should go buy a new or used Toyota Mirai, live with it for a year and try to drive across the country with it. And then he should try a Tesla Model 3 and do the same things… and then he will see why hydrogen is an expensive and inefficient dead end. No… unless the Canadian Dollar gets hit with hyperinflation due to bad monetary policy like what happened in Zimbabwe. “Have you?” No. “Do you have any BTC or ETH?” No… but I have some shares in Coinbase… I figure as long as people are using crypto currencies, they’ll need the services of a crypto exchange… and COIN is the only publicly traded one regulated by the SEC… so it’s less shady and doesn’t have a history of data breaches like some of the Chinese exchanges. I say that mostly because of its decentralized nature, and virtually no state actors backing it (bedsides a couple of small, poorer countries), meant that it was competing as a currency with national currencies. It also was structured to make things easier to hide, so not paying taxes on a purchase made with imaginary money means it would infringe on state monopoly, making nation states not want to back it, unless their own currency was so weak that the loss in potential tax revenue was outweighed but “stability”, which obviously didn’t work out. Also, thank you Matt for writing the morning dump, everytime I see the “welp”, I’m instantly annoyed and skip over whatever is written. Once people get used to L1 overnight charging and that fast chargers are needed only on road trips where it’ll increasingly be a sideline to dining and other roadside attractions, nobody’s going to want to be forced to make a special trip to a hydrogen station in an industrial park and spend money up front to refuel once a week just for driving errands around town just like Mom and Dad used to at gas stations.
