Uncertainty is high in the EV market and there will be no winner. That’s what Berkshire Hathaway CEO Warren Buffett said at the company’s annual meeting this weekend.
“You’ll see a change in vehicles, but you won’t see anyone holding the market because they changed vehicles,” Buffett said. Quoted Via Yahoo Finance.
To illustrate the uncertainty surrounding electric vehicles, Buffett reminded his audience how Ford once dominated the car market thanks to the Model T, only to run at a loss two decades later.
The note may be a cautionary tale for Tesla, which currently sells the most EVs of any carmaker in the U.S., but rivals are mounting. However, at the same time, they have yet to reach Tesla’s level for reasons ranging from supply chain challenges to financial issues.
Last week, Reuters reported US EV startups are expected to report another quarter burning through cash with no discernible improvement against a challenging economic backdrop where EV demand is declining.
“Any company that loses money at a low valuation is snacking and EVs are no exception. I think it’s a slow bleed. Maybe they get lucky and some of their technology gets bought by bigger players,” Thomas Hayes, president of hedge fund Great Hill Capital, told Reuters.
Even bigger players are in trouble. Even the GM Burning money It hopes to stop this in EVs by 2025. Meanwhile, Ford reported a first-quarter loss of $722 million for its EV division, which translates to a loss of more than $66,000 per vehicle, according to energy market analyst and commentator Robert Price. reported Last week.
Tesla is not without problems, forcing it to lower prices to keep up with demand while raw material inflation eats into profit margins. That problem could worsen amid the federal government’s subsidy programs under the Anti-Inflation Act.
Irina Slav for Oilprice.com
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