[WopOnTour]

UBS BOLT STUDY

Not sure on the accuracy of some of the estimates and financial analysis brought forward by this Canadian company, but an interesting (and extensive) read none-the-less
Enjoy
WOT

 

[ClarksonCote]

Hey WOT, I've seen some articles that reference the cost of a new Bolt EV Battery, from online GM parts suppliers, etc. Do you know if that pricing assumes a "core return" of an old battery, or if that's the price anyone can pay to get one?

The article suggested the latter, and indicated that, working out to roughly $200/kWh, it was a sweet deal.

As to the link above, that is a pretty good article, thanks for sharing. They provided some great summaries:

Mechanical complexity is much lower, whereas electronic complexity is higher. We counted 24 moving parts in the Bolt's powertrain, versus 149 in the Golf. The powertrain electronics content is $4k higher on the tier-1 level, motor included.

I also like that they reference a $3k profit being earned on each vehicle, though apparently still a loss overall. This appears to be due to some assumption of sales volume and the ability for that $3k profit to pay off all the indirect/fixed costs for tooling, R&D, etc. I'm not sure what sales figures they're using but assume they come from GM's own projections.

 

[Qinsp]

They are just making stuff up to earn money.

They give a cost estimate of building the Model 3 (they claim is cheaper than the Bolt) without knowing the battery size, motor size, or inverter size, much less the base features of the car or construction or weight.

How can come up with a production cost without knowing what they are producing?

 

[Raymondjram]

The UBS study has too many assumptions or "guesses". And the values that UBS takes for "content" is mostly for the powertrain , not the whole vehicle, because the body and other passive components are made in the U.S. even if the powertrain is mostly made by LG in South Korea. Maybe GM will work with LG to build the next Bolt EV powertrains in the U.S. and with local suppliers, increasing the U.S. content of the Bolt EV.

I prefer the Chevy Volt breakdown done by EE Times (Munro & Associates) as they did a engineering evaluation, not a financial one like this one. The second generation Volt went through many redesigns to simplify its manufacturing and servicing, such as the controller integrated into the transaxle (reducing the HV cabling) and cleaning up the engine bay. So I see the second generation Bolt EV going through the similar redesign to simplify its powertrain, and probably integrated the controller with the transaxle, becoming a modular system, needing only the battery and signals to complete the powertrain. This simplification allows GM to integrate this EV powertrain into more vehicles, and may including a uprating for larger and heavier vehicles.

For now, I thank you for posting this link. But I expect the EE Times to buy its own 2017 Chevy Bolt EV, disassemble it too, and make its own evaluations.

Here are the articles about the Gen 1 Volt disassembly :
http://www.edn.com/design/automotive/4372600/Teardown-reveals-Chevy-Volt-s-electronic-secrets
http://www.eetimes.com/document.asp?doc_id=1279627

And here are several videos of the process:
http://www.eetimes.com/document.asp?doc_id=1279472

 

[viking79]

The study does show a positive margin on the Bolt EV, discounting R&D, which shuts the door on the naysayers saying "GM Loses money on every Bolt EV..." They don't, they want to sell as many as possible as that would mean profits. They lose money only on those they don't sell.

Yes, there are a lot of assumptions in there that might not be right, but overall it is the best we have seen since GM would never provide that info.

 

[Qinsp]

The study does show a positive margin on the Bolt EV, discounting R&D, which shuts the door on the naysayers saying "GM Loses money on every Bolt EV..." They don't, they want to sell as many as possible as that would mean profits. They lose money only on those they don't sell.

Yes, there are a lot of assumptions in there that might not be right, but overall it is the best we have seen since GM would never provide that info.

Their repeated references to a non-existent car points towards a stock manipulation white paper.

If they said a Bolt costs $9000 more to make than sell, then what does that say about the imaginary-specification M3 car if you exclude Magic Technologies that Defy Physics?

It will probably cost less to make a base Bolt, than a 5 second to 60, 5 seat, fully AV hardware, Supercharger funding, car. The cost of the Supercharger maintenance and expansion must be included as portion of each M3's MSRP. The nVidia AV system and research costs money on even the base models. And no proof exists whatsoever that Panasonic and Tesla can actually produce cheaper batteries than other suppliers. Just tweets. Nor is there any proof that Tesla can use less manhours per car by using robots than other OEMs that all use robots.

In fact, Tesla Motors has more employees per 1,000 cars produced than nearly all automakers. It's about 3 to 1 higher.
Just the simplest explanations, such as Tesla's inability to generate a profit at $70k a car is telling.

 

[Bacardi]

http://www.telegraph.co.uk/business...-will-become-first-automaker-generate-profit/

GM's own spokesperson Mark Reuss, GM's executive vice president for product development said on May 1st, this is months after the Bolt was launched: "we're going to be the first company to (produce) electric vehicles that people can afford at a profit" Reuss said.

Also "Reuss noted that deploying a fleet of all-electric autonomous vehicles would help lower battery costs."

If we dive deeper we could speculate the Bolt does indeed make a profit yet GM/Reuss do not believe the Bolt is "affordable" but you'd have to imagine if that's true GM/Reuss would like to tout their own horn and announce that the Bolt was indeed profitable...

Whatever profitability formula that was used has to be used on other vehicles...As I've pointed out before, Subaru stated it spent ONE BILLION to create the new Impreza...Would UBS consider that profitable?

 

[Shivetya]

I do find it funny how they can claim Tesla will earn more / lose less compared to GM, GM a company who has a very deep supply chain compared to Tesla's.

 

[Neromanceres]

It's a heck of a report. It took me 90mins just to skim it. Very detailed. And of coarse lots of assumptions.

They are just making stuff up to earn money.

They give a cost estimate of building the Model 3 (they claim is cheaper than the Bolt) without knowing the battery size, motor size, or inverter size, much less the base features of the car or construction or weight.

How can come up with a production cost without knowing what they are producing?

They don't know and they make that clear in their assumptions along with making what assumptions they made very clear. This report isn't about the Model 3. It's about the EV industry and they use the Bolt EV as the basis of establishing industry impact.

The study does show a positive margin on the Bolt EV, discounting R&D, which shuts the door on the naysayers saying "GM Loses money on every Bolt EV..." They don't, they want to sell as many as possible as that would mean profits. They lose money only on those they don't sell.

Yes, there are a lot of assumptions in there that might not be right, but overall it is the best we have seen since GM would never provide that info.

Agreed. The article seems to make it clear that if GM makes more Bolt EV's then the Bolt EV becomes profitable quicker. It appears that based on an annualized production of 30K per year the Bolt EV would be profitable in 2025 (which is likely longer than the design cycle life). However if GM were to increase production then the Bolt EV would likely be profitable within it's first design cycle (which based on GM's comments will likely be the case).

 

[Qinsp]

...

They don't know and they make that clear in their assumptions along with making what assumptions they made very clear...

While they included the Model 3 pricing, they did not include other EVs such as the global leader, the Leaf, or the new supposed benchmark, the Hyundai Ioniq EV.

There was a reason they included the Model 3 in the white paper instead of another, known-spec car. It's a stock market paper. Nobody cares about the Leaf or Ioniq EV on Wall Street, and somebody needs to justify the unsupported valuation of Tesla Motors. So EV costing as of 2017 was not as important as proving the Model 3 can be profitable quickly. If you can't prove the Model 3 will show a profit almost instantly, then there will be hell to pay on NASDAQ. Lowering the estimated costs of making a budget 200 mile EV helps TSLA price support, hence the Bolt EV study. GM stock is flat and pays dividends, so nobody cares. GM is not worthy of roulette wheel stock pricing at this time.

 

[Steverino]

It's a heck of a report. It took me 90mins just to skim it. Very detailed. And of coarse lots of assumptions. They don't know and they make that clear in their assumptions along with making what assumptions they made very clear. This report isn't about the Model 3. It's about the EV industry and they use the Bolt EV as the basis of establishing industry impact.
Agreed. The article seems to make it clear that if GM makes more Bolt EV's then the Bolt EV becomes profitable quicker. It appears that based on an annualized production of 30K per year the Bolt EV would be profitable in 2025 (which is likely longer than the design cycle life). However if GM were to increase production then the Bolt EV would likely be profitable within it's first design cycle (which based on GM's comments will likely be the case).

Right, it's all a guess on the part of UBS. Very few facts, lots of assumption built on other assumptions.

Using the same accounting method, a McDonalds franchise "loses" about $2 million on every hamburger sold until they recover all their investment. It's a ridiculous method to determine product profitability, whether making hamburgers or cars. That's why it's only used by anti-EV critics to paint EV's as failures.

 

[Neromanceres]

Right, it's all a guess on the part of UBS. Very few facts, lots of assumption built on other assumptions.

Using the same accounting method, a McDonalds franchise "loses" about $2 million on every hamburger sold until they recover all their investment. It's a ridiculous method to determine product profitability, whether making hamburgers or cars. That's why it's only used by anti-EV critics to paint EV's as failures.

Actually they took that into consideration. They did an actual tear down of the Bolt EV. And certainly some assumptions are still made on component cost. While true every car is technically going to lose money in it's first year. If you read the report in detail the premise was that they were surprised on how quickly the car will become profitable. And are predicting that EV's in general will become as profitable to manufacture and sell by 2023 as conventional gas powered cars.

 

[Steverino]

They did an actual tear down of the Bolt EV. And certainly some assumptions are still made on component cost.

..and they tore down a Model 3 to look at the component costs in order to make their assertions. Not.

 

[DonC]

I thought it was interesting. Note the analyst on the paper previously relied on Jon Bereisa's group for cost estimates. I wonder if his group is still involved or if this is some other group. I thought it odd that report said said the pack cost less than previously thought but never explained what they thought and why this turned out to be incorrect.

The estimation of indirect costs is obviously going to be squishy. I wouldn't put much stock in the break even estimates. And using the Bolt EV to estimate the cost of the Model 3 just seems bizarre. Even the battery cells aren't the same.

The most interesting part to me was the discussion of suppliers. Nice future for electronic suppliers. I can see why Qualcomm bought NXP semiconductor.

 

[Billtphotoman]

This was a really interesting and encouraging article. I was really surprised how inexpensive the power train components were (less the traction battery obviously). If I read it correctly the cooling system for the battery was also quite inexpensive which makes me wonder even more why Nissan insists on sticking with air cooling. I would be really curious to see what a direct-injected 4 cylinder engine, emission control system and 8 speed automatic transmission run.

 

[WopOnTour]

This was a really interesting and encouraging article. I was really surprised how inexpensive the power train components were (less the traction battery obviously). If I read it correctly the cooling system for the battery was also quite inexpensive which makes me wonder even more why Nissan insists on sticking with air cooling. I would be really curious to see what a direct-injected 4 cylinder engine, emission control system and 8 speed automatic transmission run.

I do believe this article tends to support some of the recently published stories and articles in the media that indicate we are fast approaching a point where the production costs of producing an electric vehicle is going to be at par as one with a conventional ICE powertrain. 2020? Perhaps...
WOT

 

[Ladogaboy]

I do believe this article tends to support some of the recently published stories and articles in the media that indicate we are fast approaching a point where the production costs of producing an electric vehicle is going to be at par as one with a conventional ICE powertrain. 2020? Perhaps...
WOT

It might actually come sooner with Tesla. One advantage of cylindrical cells and induction motors is that they are much cheaper to manufacture. If Tesla can get the rest of their manufacturing costs down, they should be able to produce EVs at a similar cost to ICE vehicles.

Even with the pricier PMAC motors and prismatic cells, GM is getting close. I wonder how many other manufacturers will be able to catch up?