I lived in Nagoya for a little over a year. The whole city is basically supported by Toyota. Little distance from Nagoya is Toyota Shi, which is all the Toyota factories and suppliers are located. If Toyota falls, the whole Nagoya falls. If Honda falls, the whole Hamamatsu falls. Sad to imagine
I knew those cities and companies well in the 1980s when I was studying Japan Inc., as an American analyst. Their devotion to total quality management, kereitsu (Tightly integrated supply chains), I mean things were booming and it seemed they were going to sweep the world. They had a great 40 year run, but now it's rapidly coming to an end, and they just don't see it. And these are very smart people. It's really tragic. I can't believe it, but it's happening.
Holy… I had not connected the dots yet that Japan is not only messing up in the EV transition, but that it is also the country with the biggest debt problem. An excellent and indeed alarming point.
@@aregeebee201 japan is not china china has stuff japan can only dream of huge market huge reserves Huge company conglomerates none of japan's conglomerates even compare Oh and toyota and softbank are on the brink of bankurpcy.
I saw this coming two years ago with Toyota and the Japanese economy. Thank you so much for speaking what is already evidence and looming strategically in the world of finance. Thank you
@@timshort9692 no worries for the Japanese auto industry. The Japanese government seems not worried at all. In fact, they are trying to double Japan’s military spending to 2% of the GDP or more. Of course, this is under the guidance of the US. So if anything we should worried about Japan, it’s their military expansion or outward aggression …
You're right about this disruption being bigger, but it's not just cars. The renewable energy sector is killing off all other forms of energy production. At approximately 2.8 billion a day in revenue, the fossil fuel industry is freaking out at losing this stream of cash. When this industry crashes and burns, the face of the economy will forever change.
Hate to burst your bubble about ANY of this, but no. Everything from feature subscriptions to remote monitoring and range is being done by real car makers, and people are saying 'hell no.' Those same mass market customers, by the way, are still buying ICEVs...and the increasing age shows that they're not buying NEWER ones as much as older ones. Solar and wind and batteries are showing themselves to be failures everywhere they're tried, from Australia to Cal to Germany, causing them to TURN BACK TO COAL AND GAS. The only thing getting killed off, is customer interest in a huge loan and Power Purchase Agreement for 1/10 the power you need. Oh, by the way...thanks to battery and solar production, and the far smaller fraction of oil used in these processes. That means MORE oil than before, to supply more of that smaller fraction. And higher price per barrel...kind of like what we're seeing these days. Thank God you don't run a wealth management channel...
Not so sure about that. Worldwide daily output is 90 million barrels, much of that not consumed by vehicles. Some oil CEO’s embrace the idea that while it may change, output levels will still be very high.
It’s funny how bad this guy is, remember 2008, is he’s a economist? The government will back up most important companies. Maybe some will go belly up but a depression. We live in another age, unless a situation where we can’t product enough food and water or ways to survive. Tesla will go down if Muck keeps opening his mouth. I wouldn’t buy a Tesla.
Industry got a 30% share of Japan's GDP, nowhere near 89%...An additional false interpretation is the huge debt of Toyota, this is actually coming from car financings which makes solid profits. So this report got some flaws.
Japan is SO focused on keeping their residents IN the country as their population is not perpetuating itself. This could be devastating in ways we cannot fathom.
Excess workers (and population) will be the problem of the future, with rapidly increasing automation and artificial intelligence --in ways we cannot fathom.
Great vid and I agree on your take...I've traveled Japan on various vendor tours and, you're right, the entire society is designed around JIT Mfg, specifically, the auto industry. This goes back to Dr. Edwards Deming's cultural coaching, post WWII and the 'one unit' production concept. Toyota, imo, somehow got 'wrapped around some political axel' and lost their magic of planning. This is so confusing... and tragic. Keep up the great work, Mr. EV! I also wonder how the Japanese government will respond to such losses of industry. Maybe this is the secret plans that we just are ignorant of... a Japanese government-subsidized approach to EV catch up...? who knows. I just keep buying TSLA.
If the govt response is anything like it was when the "militarists" had extraordinary influence in the Hirohito cabinet, I strongly suspect they will maintain their current course. Seeing anyone with an obvious problem, and trying to subtly communicate is rarely successful. What might get their friggin attention is a hostile takeover of their biggest make (Toyota) by some random white guy who has hundreds of billions of dollars. Instead of taking over a social media platform, making a huge down payment towards a foreign make would have real spicy. I know, the Japanese would have all the excuses in the world why the idea is just unacceptable. That's alright... the cars in Shanghai are cranking out at an ever increasing pace, maybe the bigger mission to quicken the pace of the big switch from ICE to electric is served just as well by an all ICE company being eliminated from the transportation game. Sadly, the folks who brought the prius to the world just don't see where this is all heading. Ouch.
It’s too late . If you understand how iconic brands fail to shift to new paradigms you understand a entire country built on legacy supply chain is 100000000x and next to impossible turn around. A change in Culture and rewards/systems cannot be changed overnight .
@@blueeyes6192 I think that's true. Here in the US, there are clearly large swaths of us who just disregard electric cars, trucks, renewables, etc...with sweeping comments like there's no solar at night dumbass. Um, yeah, no shit, and water's wet too. Thanks for nothing, wait that's less than nothing. Just a bunch of assholes, unwilling to change their ways.
You know the Germans created “Just In Time” manufacturing right?!😂 Their “green” processes are also industry leading… like burning paint flow off from the paint shop to heat the factory.
@@lukeclifton4392 source? I tried, but all the interwebs offered was the Deming championing of Shewhearts work pre ww2 and in japan just post...but was in reality just statistical process management. But then in the 70's, it was Ohno at Toyota that ran with the ball... if you know of something more I'd love to hear it!
The biggest problem for Mazda and Subaru is that they currently compete in the ICE market along angles that EVs are particularly strong - Mazda is zippy with good handling. subaru is all wheel drive in a smaller vehicle. EVs are just better for these cases. Between this and the subsidy that Sam mentioned, it is hard to see how they compete. Japan is capable of great unity of purpose when they get aligned behind one picture. However, I just don’t see where unity is going to save them, when profit is missing.
Th whole economy Issa sinkin ship because of Japanese hard head Snead that after investing BBBILLIONS ON HYDROGEN 3 yrs ago they’ve got to start mass production of electric vehicles SOON
Santa is the loser CEO of a toy company failing so badly he has to give away his toys to poor children and immigrants. It’s a disaster. Not very smart. Very sad.
@Pinoy Open Source Graphic Designer This is total NUTS, maybe they should just give the nations keys to China. (come and take us - we give up) Maybe Japan embraced hydrogen as it was the closest to petrol in form (goes in a tank, burns like regular fuel), again old-farts half asleep, zero effort thinking.
Japan's public debt is mostly owned by Japanese. It's not that big problem. Japan has huge net international credit. Financially its position is far better than Australia. Japan's real problem is that she cannot keep up with global technology shift and thus loses industrial competitiveness. Japan's problem applies to Germany as well. Germany simply has too many car companies. Digitalization and electrification of cars will be a big challenge for German car companies.
@@winstoncat6785 Do they make anything the world really needs? Cars - no, plenty of alternatives. Were they the supplier of that magic black 'plastic' that encases most IC's?, There was a factory fire many years ago that kind of stuffed the electronics industry for a while.
Japan is one of Australia’s biggest trading partner but as we supply a lot of coal and iron ore in exchange for a lot of cars. If Japan has a collapse in their auto industry it will have serious effects in Australia. Toyota is easily the biggest car seller in Australia and a major sponsor of our football and cricket. Their reliability is legendary in country where that really matters. So it’s not just the economy , it is stronger than that ,it’s culturally going to affect both countries.🤔🚗🏏🏉
A government can only bail out a company which manufactures products for which there is a demand. The demand for ICE vehicles is evaporating, for hybrids too. So the best the Japanese govt can do is to settle the automotive companies' debts. If the debt is to the Japanese Central Bank, then they could write off the debt. I don't know what the consequence would be. As for Toyota (and the others), the govt could finance a restart of a company which can develop EVs and manufacture them. That is going to cost an enormous amount and many years.
Your statement at 5:50 that 89% of Japanese GDP comes from manufacturing is way wrong. Like all first world nations, Japan's GDP is dominated by the services sector at ~70% of GDP. The balance is industry (of which manufacturing is a component), and ~1% agriculture. Of the Industry sector, manufacturing makes up around 18% of Japan's total GDP.
It is not Elon’s doing causing the bankrupt risks. It is failures by other CEOs to not understand the inevitable and act with sufficient urgency. Tesla have been so completely open about their plans which should not have been such a surprise when they achieved them. Complacency (unwarranted at that) is what their problems were, and still are in many cases.
I have seen many better companies than Lucid go bankrupt.Legancy automakers will slowly follow.Team Japan is fighting to keep ICE vehicles for as long as possible.
I always want to take a contrarian point of view to these kinds of analyses. But, I find it near-impossible to make a case against what you are saying. Japan is in enormous trouble from where I'm looking. This will be existential within 5 years.
I would take what Elon Musk says with a grain of salt considering it comes from someone who is being voted by almost 60% of it's users to step down as CEO of a company he just took over, and is offloading Tesla shares like no tomorrow at a time where the share is down 60% YTD lol
Japan needs to be at atleast 10% EV's now with plans well underway for massive growth, otherwise take the auto industry over there and flush it down the toilet.
@@Outsider.Reviews nothing wrong with using public polling to decide your leaders, you don’t believe in democracy? Also he had Tesla stock as collateral to pay for twitter, so he is legally bound to sale it as Tesla stock prices lower
I wonder how many financial managers are shitting themselves at the moment as they look at the long term prospects of ICE auto makers. Either that or they are about to hit their retirement option button.
Cute story, but the Japanese already know the environmental impact of an EV from build to scrap in todays climate is far more polluting than an ICE… they aren’t cashing in, the Japanese are following their legacy of building quality reliable products. Taking into account the environmental impact of an EV build, the use of 3rd world labour to mine resources, the source of energy production used for recharging (which most are recharging at night from non-renewable sources), grid limitations from sudden uptake, the lack of battery recycling (including the exponential energy used in doing so), the shortened lifespan of the vehicle, the safety factor in a fire including the imposing environmental damage, and the range anxiety… that’s why they’ve stuck to hybrid. 1x Hybrid car lasting 20yrs, is better for the environment than 2x EV’s lasting 10yrs. The Japanese brands are skipping the EV bûḻḻšhïṯ and looking to hydrogen, it solves all of these issue’s… but the safety factor is yet to be solved. If you REALLY want to get your head around the EV scam… the average household uses more than TWICE the energy daily, compared to the daily use of an EV. So why aren’t we putting more effort into installing batteries into homes and solar, which would aid in reducing loads when the sun goes down?? Call me a conspiracy theorist. But EV’s are here to chew up battery resources thus keeping energy producers afloat, environmentalists focus on battery vehicles emissions not household emissions nor the environmental impact of EV production, EV vehicles get subsidised (chewing up more battery resources that would be better utilised in the home), most people have installed solar to combat increasing power prices however the energy companies are happy to use their energy generated to charge commercial business but only pay back 25% for feed in… All whilst these EV “saviours” plug in at night after they get home from work and “think” they’re doing the right thing but unknowingly use fossil fuel or nuclear energy to charge their “chariot-of-deceit” using the grid… whereby that same battery could be providing green energy for the house that uses twice as much energy!?!?
Correct. It is around 20%….i dont get it. How can you make such a crazy statement without even having a glance on the actual statistics??? Services itself is c. 32% of GDP….
@@jonthemagicmelon4726 ok, you might say 39% or perhaps 49% if you really wanna push it. But NOT 89%!!! Japan is one of the most developed countries in the world. In these economies manufacturing represents a relatively small proportion of the economy. In the US it is getting close to 10%!!!
Those numbers are positively frightening for Japan, they appear to be on the brink of a massive economic disaster and seem to be standing there with fingers in ears going "la, la, la". For Toyota to have that level of debt and no realistic plan to avoid insolvency is criminal mismanagement I would have thought.
There is one problem with your analysis and that is that Honda, Yamaha, Kawasaki and other big Japanese companies make products other than vehicles and could transition away from making cars in the scale they are doing now. Also some of the companies you mention are tire companies and last I checked EV drive using tires. Japan's national debt is a big problem and that has serious impact on Japan's economy going forward.
Why would Chinese or Tesla use Japanese parts even if their cars do need parts? Parts makers sell best to domestic. If Toyota, Honda and Nissan stop buying, they won't suddenly win all the orders from others.
EV's do not provide a profit stream down the line for the manufacturer and dealers as ICE cars. High cost EV's where virtually no profits at sale and little profits servicing and parts.
You're right. Tesla is a tech company for that reason. 2nd, Tesla cost to buy are higher for that reason. Henry Ford wanted to sell the business to GM provided he could keep the backend.
Monthly subs for premium connectivity from ~80%(?) is a glorious revenue stream. If gm or Ford were getting $100 a year from 80% of the cars they've sold, what would their financials look like?
@@andrewsaint6581 I agree. Tesla makes the dollars upfront. If you own 1 for 15 years the cost per year is lower compared to ICE. 10 years ICE needs a rebuild. With batteries there is always residual value. 20 years out and that can be repurposed. So Tesla's business gets the backend revenue stream and the owner gets a product which stays current maintains value. Over time I think the trend is our friend.
The companies you list include at least one tyre company. My bet is that car tyres will continue to sell regardless of whether the cars are petrol, electric or even steam. Same goes for air bags, seat belts, head lights and car seats.
There is not anywhere near enough electrical generation capacity to charge EVs on a large scale. There are few planned plants, and it’s nearly impossible to obtain a permit. Electric transport is very inefficient as well. These are major headwinds, at least for the US and EU.
Until last week, I was quietly reserved about how long it will take for people to stop buying ICE cars. When I talk to friends, they are still in ICE car thinking mode. But last week I did some calcs as I prepare to take delivery of a Tesla Model 3. I had previously thought the cost of ownership would be a bit more than replacing my 10yo car with a 5 yo car. I was wrong, a Tesla works out more than 2x cheaper than owning and running a 5yo Subaru Outback!! I was shocked. So I ran the numbers on a model Y vs our 18yo Toyota Prado. CRAZY - Prado costs more than 2x Model Y over then next 7 years. Far out, we can run two model Y's for one old Prado. Tesla's also work out way cheaper than Hybrid Camry, Rav4 etc too. Ok so a model Y is not a replacement for a Prado in terms of 4WD, towing caravan etc. But at 2x the cost, I can rent a 4WD for holidays and still be ahead. Contributing to the amazing numbers is the fact that the Oz Gov is waiving FBT tax and other tax breaks for EVs. So, maybe Viking, you're right about people not wanting ICE cars any more!
Welcome to th new reality knowledge of electric transportation assistance to the transition to renewable energy and sustainable living for future generations consciousness
I HOLD ELON MUSK AND TH TESLA TEAM FULLY RESPONSIBLE FOR IMPROVING TH UNIVERSE WE reside in . Th future is amazing limitless energy abundance battery storage not needed
I've had my Tesla 4 for years. October 1st 2021 I got an app that tracked gas savings. Anyway, it takes the rate of electricity your paying from your electric company, then figures how much you've saved in gasoline by calculating average gas price for your area. I've saved over $2,500.00 in gas since October 1st 2021.
It gets even worse for Japan as they have an ageing population. Not only are they dramatically short of workers but they are short of consumers, at least the age group who will be buying cars. On top of this demographic time bomb, the automakers are wasting billions on developing hydrogen powered vehicles, which, as we all know, is a total dead end.
They are properly called “Stranded Assets”, as they have no value any longer.. The Oil & Gas industry has the same issue, millions listed as “assets” for Oil Reserves, that will never be brought up to be refined.. the best place for that oil is exactly where it is, underground.
Sadly the debt bomb extends far further than the car industry. Japan are world leaders in indebtedness. In fact the whole world has maxed out the credit card 😱
Tesla’s stock is down 65% as of today and leading investors are pointing their fingers at Musk. Talking about who Musk will disrupt might include his own company, wouldn’t you say? And, by the way, Musk’s share in the company is down to 13% following several stock sell offs. The notion he will no longer be CEO is not so far-fetched anymore.
I am sorry, but a great analysis starts with using facts and NOT fictions. though he does make some interesting points, but he often mixes up facts with fiction…In particular regarding the Japanes economy….
@@winstoncat6785 for instance, manufacturing represents c. 20% of the Japanese GDP and NOT 89%! That changes things substantially re. his points on the Japanese economy.
@@Rex-ww4cw The point remains he was way off and therefore misleading. This really should lower trust on any future stated 'facts,' I still find his channel informative and entertaining but simply put, don't believe everything you hear. People with good intentions and varying success in research, make mistakes. The video rate will likely do this more to Sam.
Sam, I do think Musk understands supply chains better than you. The ripples in the supply chain has global effects. He also went through a recession and survived it without going bankrupt unlike GM. FORD is in a worse state. The market is more competitive than ever and RIVIAN has way too complicated of an EV too make and won’t be profitable at current prices. They are also small unit variants like the model S and Model X.
Oh come on ! There is no supply chaine shortage ! It's all artificial ! Just because a few ships got stuck in the Suez Canal for a few weeks the whole world wide "just in time production broke down for years ? That's nonsense !
When I was a child in the 1950s and the 1960s there were still plenty of things being delivered by horse and cart to people's homes daily in Adelaide and Renmark. At my home in Adelaide these included milk at 5am and fresh bread at 1pm. At Renmark backyard toilet buckets were replaced daily also. All the full buckets were placed on a cart pulled by a horse!
Until the Americans fix their electric vehicle charging system, electric cars will not take off. Drive an electric car long distance, or even better, across country and you’ll see the problem.
European countries' automakers are also carrying massive debt, steadily loseing ICE sales whilst gaining very little traction vs Tesla. For starters. Now the Chinese companies, chiefly BYD have begun their ramp-up. Mercedes $126B, BMW $177B, VW $493B. Who's going to write their loans? At what rates given the risk? Whilst interest rates are rising and recession mounting? Only Tesla with its huge margins can afford to lower prices and still make 5-7x margins vs legacy automakers.
Check out the Deficit Myth by Stephanie Kelton. The idea of high debt to GDP as problematic is problematic. It’s based on antiquated notions of economics. This doesn’t mean that Japanese car makers going bankrupt won’t hurt their economy, however, the idea that Japan’s debt to GDP is extreme and that this has put their economy in peril somehow is incorrect. Part of the reason Japan thrives currently is thanks to its high debt to GDP ratio. In a country with it’s own currency, as long as government spending doesn’t spur inflation, citizens benefit. Japan does not suffer from inflation, so the fact that the government has invested more in its people than it has usurped from them makes it a stronger society. Once this is understood, world economics becomes a bit less mysterious.
very well documented... great overview of Japan's almost impossible challenges ahead! And Japan is my favorite country on the planet, I wish them well.
Clearly you have no obligation to answer this question, but why the "8304" after your name? Were there 8303 Michael Calmeyer Hentschels who took the handle before you on TH-cam? Just curious.
I think that the biggest part of the problem is not just a lack of planning but poor timing. ICE car manufacturers seem to believe that it is going to be cenuries before EVs outsell ICE which does not appear to be the case. There in lies the question. When will EV cars outsell ICE and what are the manufacturers, largely Japanese going to do when they do. It's like believing that the Titanic was not only unsinkable but that even if it got hit by a missile, it would take years to sink.
Your spot on, this crash is coming fast and hard for Japan, they've had their chance to turn things around a decade ago and missed it. The roads of generational disruptive transformation are always lined with the bones of the incumbents.
If TSLA does well in the middle of a recession/depression, then TSLA will become like a black hole into which any business remotely competing with it will be absorbed into it. Investors know Tesla will succeed. They will look for a safe refuge for their money. The clock is ticking and anyone not onboard soon is going to deeply regret missing the boat.
EVs just aren't doing that well in the US. Ford makes money on ICE vehicles but loses money on EVs. Every aspect of Sam's analysis is based on the unsupported theory that EVs are going to take over. However sales in the world's largest car market, (The US) do not yet show that.
You are right that the disruption of the ICE industry by Tesla and now China's EVs as well is much bigger than Henry Ford's disruption of the horse and buggy industry. However, you've still greatly understated the degree of disruption globally. The disruption globally includes not just the ICE auto manufacturing and servicing related industries, but the even larger vested interest globally in oil and the entire fossil fuel industry. To quantify the disruption of just the oil and natural gas industries, you need to understand that the valuation of just today's "proven" reserves IN THE GROUND carried on the financial books as assets of the major oil and gas producers amounts to more than $30 Trillion!!!
The contribution of the manufacturing sector to Japans GDP is 20% not 80%. Like most other advanced countries the majority of Japan's economy comes from services.
The first companies to get into trouble will be those foreign companies making ICE cars in China. Chinese customers have lots of choice with cheap electric cars plus its government backing EV's. The next country to have problems will be Germany. Their expensive cars will have competition from Tesla in Europe. VW make cars in both Germany and China.
Everyone is concentrating on EV and declaring internal combustion for death .Nobody talkes about country that does not have the utilities needed for EV Africa South America India etc you don’t get anywhere with EV.
What's alarming is someone like yourself can spew this sort of nonsense and 100K+ people are buying it. Building an EV is not that complicated a task, and ICE is a very small component of the automotive industry. Tesla's competitive advantage is in it's software, not hardware, and Tesla's hardware is price competitive only as long as government subsidized carbon credits last. ICE to EV transition would last far longer than most EV bandwaggoners seems to think simply because the ICE to EV transition is an infrastructural transition, not the end user device transition (and naturally, infrastructural transitions occur over span of multiple decades, not several years). I'm not going to go into details as to the debt structure as it'll take a bit too long, but that part isn't exactly a worry either. Look up who owns most of their bonds 🙄
Hybrids are a much better option for most people than battery electric. Toyota is doing very well. Toyota stock is up 20% so far this year. Tesla stock is down 20%.
I think that Japan' s problem is deeper than this. A third of the population is in their retirement years. Less people to do work and likely less purchases of manufactured goods across the board. Health care use will go up and you could see an importation of workers in that field.
Just because Japan is a heavy automotive economy doesn’t mean all the jobs disappear with EVs. Factories can be retrofitted. There are growing pains but these companies will make the shift.
You have done your research well Sam, I ran some numbers and you are pretty well on point. Very good video and summary of what is about to become of the Japanese automaker’s,very sad but it is what it is. What is the answer? I guess time will tell.
Ideally they would pivot and do something amazing and unexpected. However they are old (relative to population) and becoming a smaller population. Perhaps they will get off the craving for more crap and endless pursuit of money and live better lives than the rest of us. I guess for that to happen their population needs to more than halve.
Hundreds of new power plants should be under construction right now to support an electric car future. It's just not happening. California has already had to tell electric car owners not to charge their cars. Because there was insufficient electric power available. If something isn't done about this, it will delay the transition to electric vehicles for decades.
They DID go bankrupt 40 years ago building out the shinkansen network. JNR was privatised and broken up into 7 separate companies. US$500 billion in debts was transferred to the national budget. Enough to build Trump's wall 8 times over.
But with 2 major differences. Ford made car ownership AFFORDABLE and was highly PROFITABLE. TESLA is neither. Tesla posted its first ever profit in 2020 after 17 years in business, and then only because of selling carbon credits to other vehicle manufacturers. So I say BULLSHIT BWANA to your comparison.
Elon is on heigh dossage of artificial testosterone shots... Reason for his erratic behavior. WWE superstar Christ bennout killed his family and himself due to psychotic episode caused by abnormally heigh testosterone dossage.
Japan generally and the automakers in particular, are suffering from "Paradigm Lock". This is an inability to see outside the current paradigm and to bend facts to stay within i But the real world has changed. There is no going back. They need a visionary leader in parliament and to get rid of Toyoda immediately. Will this happen? I doubt it - and the consequences will be dire.
If toyota and vw have financial problems why they then Pay extreme dividend every year to shareholders? Man your financial analysis of companies is total on the moon.
EV has the energy stored and you cannot take extra energy with you, a normal car can extend its range by a couple of jerrycan of fuel in the back of your car. Australia I would not go in to rural areas with a EV.
SONY and the other electronic giants were amazing, everyone had Japanese TVs, DVDs, VHS, Stereos, etc... and now? I don't think I have a single Japanese product anymore... they lost the electronic revolution to streaming and are about to lose the electrification next...
It is truly amazing that none of the Japanese automakers have gotten on the EV bandwagon. Sure, Nissan has the Leaf, but they never expanded on this concept over the past 15 years. Toyota's BZ4X was an utter disaster with wheels falling off the 2700 EVs made, and all were recalled. Now Toyota is having BYD build its eCorolla, while Toyota continues to promote hybrids. Toyota & Honda also wasted 5+ years trying to make a competitive & compelling hydrogen vehicle, until they figured out fuel (eg, fool) cells will not work. All of the Japanese automakers are now 5-10 years behind Tesla and the ~150 Chinese EV makers, and there is zero chance they can ever catch up. The decade will end badly for all of the Japanese automakers, as well as the Japanese economy.
Japan does not have the electrical infrastructure to go all electric. They know that ice cars is more practical for their geographic situation for now.
Great analyzing of the disruption. Can you cover the automobile Valley of Death and the technology adoption curve. I pull up these graphs to naysayers plus the Tony Seba's 2 photos of NYC in 1900 and 1915 to illustrate the doubters around me and ask them to show me refuting graphs of theirs.
The gap between horses and ICE is a lot bigger than the gap between ICE and EV. The EV transition is starting to look like it will take longer than I thought. If the prices of batteries come down enough, that would help a lot. Higher energy density and better cold weather performance would help too.
@@incognitotorpedo42 the higher battery prices due to lithium spot prices will have battery manufacturers look for alternatives like sodium iron phosphate or the lithium manganese iron phosphate as it uses less lithium than lithium iron phosphate batteries.
I mentioned the problem with switching to electric cars 40+ years ago with a college instructor. The US wouldn't go for it then as the unions would have a fit with job losses due to the use of so much fewer parts using electric motors versus ICE. There are about 20 parts in an electric motor and about 1000 parts in an ICE. I believe Japan is just sitting back right now as is Toyota, waiting for better battery technology. The demand for Lithium is a major factor but other sources of battery power will develop and then the Japanese will jump in. Panasonic will up their production when Tesla switches. Since Toyota already has the Prius and other Hybrids it won't be that hard to remove ICE motor and rely totally on battery packs. Whether the Japanese can switch that quickly will be the problem.
Global power grids can't support the charging networks necessary to go all EV even by 2030. So the governments will be forced to allow ICE vehicles for anothef 15-20 years past their deadines. All the cheap EVs in the world can't charge when charging stations are only 6.5kW, as the majority of them in the US are. Tesla's V4 Megacharger, just one of them requires a power substation larger than a 20 bay charging station. Ain't gonna build those in five years. Do your research into the lead time for power station components and grid replacement. Eminent domain. Public hearings. Financing. You're looking at a Manhattan Project in every US state at once.
no worries for the Japanese auto industry. The Japanese government seems not worried at all. In fact, they are trying to double Japan’s military spending to 2% of the GDP or more. Of course, this is under the guidance of the US. So if anything we should worried about Japan, it’s their military expansion or outward aggression …
I agree. One issue I feel is that investing in the Japanese stock market is almost impossible for a foreign private investor, the only option is Japanese funds and all the funds that I've looked at seem to have Toyota as their largest holding. For this reason I have never invested in Japan. I do hope that Japan succeeds, they are a hard working people who make fantastic and high quality products, but their companies are very conservative, driven by an overtly conservative management and resistant to change.
ICE cars & electric cars have a lot of similarities. Mostly, the drive trains are different. I don't think changing from ICE to electric, won't take that long, once electric cars start to dominate the market. I think we are at least a decade away, before EV'S dominate the market, outside of Europe.
@@aldojgt True I've been to China 3 times since 2015. In 2015 BYD was very common back then.& my last trip in 2019, you could see a notable increase. However that don't mean much for Australia. Only about 2% of new cars are EV'S in Australia. Africa, south America, India still have a long way to go, before EV'S become the majority of new cars & many of these countries keep there cars 30 years, it's going to be a long time since they are phased out.
I think we need to factor the following into the discussion. Japan makes Ev drive, motors , EV batteries,Bridgestone tyres work on both ICE and ev vehicles AND IS OEM for many US manufacturers. It is also worth remembering how many countries do not have the grid capacity to cope will full electrification of vehicle fleets. Love your work and passionate bias .it's healthy
Grid capacity isn't really a problem for transportation. It's a problem for heating (particularly in colder climates). But it takes 20 years to roll over the U.S. fleet and the average miles/vehicle is about 25 per day. That's about and extra 8.3 KW/day added to the electric grid per person Or think of it as about 250KW / month. The typical household electric bill is about 1MW/month. But we're only rolling over 1/20th of the fleet per year. So we're really adding about 12.45 KW/household/year or about 1.2% of the electric grid per year. So it isn't as huge a problem as we often think. But if we do nothing it will creep up on us.
japan is not china china has stuff japan can only dream of huge market huge reserves Huge company conglomerates none of japan's conglomerates even compare Oh and toyota and softbank are on the brink of bankurpcy.
Excellent video! Fairly new to this site and have found myself " Binge" watching these videos. Explaining the impending doom for Totota - etc, with numbers is not an easy thing to do while making it interesting! Keep up the great work!
Some industries are too big to fail. The us government has bailed out us automakers so many times why wouldn't the Japanese government do the same. If I were a betting man they'll probably only get money if they switch fully to EVs
@@door1479 of course not. They are worldwide name brands that don't just get used on Japanese cars. There was also an electrical company in the list. Obviously they're in trouble as people switch to electric cars....oh wait. I assume Sam is invested in Tesla due to his outlandish bias and willingness to believe everything that Musk hypes. Pity they don't pay dividends. Should invest in the copper, lithium and cobalt mining infrastructure that will be needed for the big switch. Only one problem...it doesn't exist!
![ทุกครั้งที่หลับตา (Lucid Dream) - AYLA's [ Official MV ]](http://i.ytimg.com/vi/4i1OBAQyv58/mqdefault.jpg)
I lived in Nagoya for a little over a year. The whole city is basically supported by Toyota. Little distance from Nagoya is Toyota Shi, which is all the Toyota factories and suppliers are located. If Toyota falls, the whole Nagoya falls. If Honda falls, the whole Hamamatsu falls. Sad to imagine
Devistating
I knew those cities and companies well in the 1980s when I was studying Japan Inc., as an American analyst. Their devotion to total quality management, kereitsu (Tightly integrated supply chains), I mean things were booming and it seemed they were going to sweep the world. They had a great 40 year run, but now it's rapidly coming to an end, and they just don't see it. And these are very smart people. It's really tragic. I can't believe it, but it's happening.
Holy… I had not connected the dots yet that Japan is not only messing up in the EV transition, but that it is also the country with the biggest debt problem. An excellent and indeed alarming point.
@Are Gee Bee
Nonsense.
@@aregeebee201 whataboutism p0s
@@aregeebee201 japan is not china
china has stuff japan can only dream of
huge market
huge reserves
Huge company conglomerates
none of japan's conglomerates even compare
Oh and toyota and softbank are on the brink of bankurpcy.
@Are Gee Bee Are you on drugs? You are either addicted or brain washed.
I saw this coming two years ago with Toyota and the Japanese economy. Thank you so much for speaking what is already evidence and looming strategically in the world of finance. Thank you
Totally agree! I am very concerned for Japan. Every one of their vehicle manufacturing titans is in real trouble.
@@timshort9692 no worries for the Japanese auto industry. The Japanese government seems not worried at all. In fact, they are trying to double Japan’s military spending to 2% of the GDP or more. Of course, this is under the guidance of the US. So if anything we should worried about Japan, it’s their military expansion or outward aggression …
You're right about this disruption being bigger, but it's not just cars. The renewable energy sector is killing off all other forms of energy production. At approximately 2.8 billion a day in revenue, the fossil fuel industry is freaking out at losing this stream of cash. When this industry crashes and burns, the face of the economy will forever change.
True dat
What people tend not to realise is that steady incremental construction of renewables results in exponential growth.
Hate to burst your bubble about ANY of this, but no. Everything from feature subscriptions to remote monitoring and range is being done by real car makers, and people are saying 'hell no.' Those same mass market customers, by the way, are still buying ICEVs...and the increasing age shows that they're not buying NEWER ones as much as older ones.
Solar and wind and batteries are showing themselves to be failures everywhere they're tried, from Australia to Cal to Germany, causing them to TURN BACK TO COAL AND GAS. The only thing getting killed off, is customer interest in a huge loan and Power Purchase Agreement for 1/10 the power you need.
Oh, by the way...thanks to battery and solar production, and the far smaller fraction of oil used in these processes. That means MORE oil than before, to supply more of that smaller fraction. And higher price per barrel...kind of like what we're seeing these days.
Thank God you don't run a wealth management channel...
Not so sure about that. Worldwide daily output is 90 million barrels, much of that not consumed by vehicles. Some oil CEO’s embrace the idea that while it may change, output levels will still be very high.
It’s funny how bad this guy is, remember 2008, is he’s a economist? The government will back up most important companies. Maybe some will go belly up but a depression. We live in another age, unless a situation where we can’t product enough food and water or ways to survive. Tesla will go down if Muck keeps opening his mouth. I wouldn’t buy a Tesla.
Manufacturing is 89% of the GDP of Japan. Sure….:-). Rather 19%-20%…
Industry got a 30% share of Japan's GDP, nowhere near 89%...An additional false interpretation is the huge debt of Toyota, this is actually coming from car financings which makes solid profits. So this report got some flaws.
Japan is SO focused on keeping their residents IN the country as their population is not perpetuating itself. This could be devastating in ways we cannot fathom.
Excess workers (and population) will be the problem of the future, with rapidly increasing automation and artificial intelligence --in ways we cannot fathom.
Not in the western country's the low birth rates because of corruption will shrink the population
Seems inevitable and coming on fast - same with S Korea - these places are extremely smart people and hardworking, but not reproducing
the buildup of evs is slow.
the fall of ice is faster.
the total numbers on the streets are slowly falling.
changes in sales are growing in speed.
“89% of Japan's GDP comes from manufacturing." What is your source, please? My understanding is that number is approx. 20%.
Great vid and I agree on your take...I've traveled Japan on various vendor tours and, you're right, the entire society is designed around JIT Mfg, specifically, the auto industry. This goes back to Dr. Edwards Deming's cultural coaching, post WWII and the 'one unit' production concept. Toyota, imo, somehow got 'wrapped around some political axel' and lost their magic of planning. This is so confusing... and tragic. Keep up the great work, Mr. EV! I also wonder how the Japanese government will respond to such losses of industry. Maybe this is the secret plans that we just are ignorant of... a Japanese government-subsidized approach to EV catch up...? who knows. I just keep buying TSLA.
If the govt response is anything like it was when the "militarists" had extraordinary influence in the Hirohito cabinet, I strongly suspect they will maintain their current course. Seeing anyone with an obvious problem, and trying to subtly communicate is rarely successful. What might get their friggin attention is a hostile takeover of their biggest make (Toyota) by some random white guy who has hundreds of billions of dollars. Instead of taking over a social media platform, making a huge down payment towards a foreign make would have real spicy. I know, the Japanese would have all the excuses in the world why the idea is just unacceptable. That's alright... the cars in Shanghai are cranking out at an ever increasing pace, maybe the bigger mission to quicken the pace of the big switch from ICE to electric is served just as well by an all ICE company being eliminated from the transportation game. Sadly, the folks who brought the prius to the world just don't see where this is all heading. Ouch.
It’s too late . If you understand how iconic brands fail to shift to new paradigms you understand a entire country built on legacy supply chain is 100000000x and next to impossible turn around. A change in Culture and rewards/systems cannot be changed overnight .
@@blueeyes6192 I think that's true. Here in the US, there are clearly large swaths of us who just disregard electric cars, trucks, renewables, etc...with sweeping comments like there's no solar at night dumbass. Um, yeah, no shit, and water's wet too. Thanks for nothing, wait that's less than nothing. Just a bunch of assholes, unwilling to change their ways.
You know the Germans created “Just In Time” manufacturing right?!😂 Their “green” processes are also industry leading… like burning paint flow off from the paint shop to heat the factory.
@@lukeclifton4392 source? I tried, but all the interwebs offered was the Deming championing of Shewhearts work pre ww2 and in japan just post...but was in reality just statistical process management. But then in the 70's, it was Ohno at Toyota that ran with the ball... if you know of something more I'd love to hear it!
Legacy carmakers should stop building ice cars now! As we are coming closer to 2035 ice cars will devaluate at a fast rate!
Guess again.
The biggest problem for Mazda and Subaru is that they currently compete in the ICE market along angles that EVs are particularly strong - Mazda is zippy with good handling. subaru is all wheel drive in a smaller vehicle. EVs are just better for these cases. Between this and the subsidy that Sam mentioned, it is hard to see how they compete. Japan is capable of great unity of purpose when they get aligned behind one picture. However, I just don’t see where unity is going to save them, when profit is missing.
Mazda is going Plasma they like being different
If a company fails, it's bad. If a country fails, it's a disaster. I hope Japan works this out.
Th whole economy Issa sinkin ship because of Japanese hard head Snead that after investing BBBILLIONS ON HYDROGEN 3 yrs ago they’ve got to start mass production of electric vehicles SOON
Santa is the loser CEO of a toy company failing so badly he has to give away his toys to poor children and immigrants. It’s a disaster. Not very smart. Very sad.
@Pinoy Open Source Graphic Designer This is total NUTS, maybe they should just give the nations keys to China. (come and take us - we give up)
Maybe Japan embraced hydrogen as it was the closest to petrol in form (goes in a tank, burns like regular fuel), again old-farts half asleep, zero effort thinking.
Self inflicted with the help of usa
Their people deserve better
Japan's public debt is mostly owned by Japanese. It's not that big problem. Japan has huge net international credit. Financially its position is far better than Australia. Japan's real problem is that she cannot keep up with global technology shift and thus loses industrial competitiveness. Japan's problem applies to Germany as well. Germany simply has too many car companies. Digitalization and electrification of cars will be a big challenge for German car companies.
I'm amazed at your perception!
Phew, I can’t see how such a problem in Japan will not impact on the whole world
No longer a big enough part of the whole to matter that much. Its output would be swiftly compensated somewhere else.
In the UK we send only £6b of exports to Japan from a total of £760 billion so it wont affect UK directly
@@winstoncat6785 Do they make anything the world really needs? Cars - no, plenty of alternatives. Were they the supplier of that magic black 'plastic' that encases most IC's?, There was a factory fire many years ago that kind of stuffed the electronics industry for a while.
@@paulstubbs7678 Japan is the number 1 exporter of Hentia
Japan is one of Australia’s biggest trading partner but as we supply a lot of coal and iron ore in exchange for a lot of cars. If Japan has a collapse in their auto industry it will have serious effects in Australia. Toyota is easily the biggest car seller in Australia and a major sponsor of our football and cricket. Their reliability is legendary in country where that really matters. So it’s not just the economy , it is stronger than that ,it’s culturally going to affect both countries.🤔🚗🏏🏉
I think this is spot on. Bravo Sam.
A government can only bail out a company which manufactures products for which there is a demand. The demand for ICE vehicles is evaporating, for hybrids too.
So the best the Japanese govt can do is to settle the automotive companies' debts. If the debt is to the Japanese Central Bank, then they could write off the debt. I don't know what the consequence would be.
As for Toyota (and the others), the govt could finance a restart of a company which can develop EVs and manufacture them. That is going to cost an enormous amount and many years.
Your statement at 5:50 that 89% of Japanese GDP comes from manufacturing is way wrong.
Like all first world nations, Japan's GDP is dominated by the services sector at ~70% of GDP. The balance is industry (of which manufacturing is a component), and ~1% agriculture. Of the Industry sector, manufacturing makes up around 18% of Japan's total GDP.
It is not Elon’s doing causing the bankrupt risks. It is failures by other CEOs to not understand the inevitable and act with sufficient urgency. Tesla have been so completely open about their plans which should not have been such a surprise when they achieved them. Complacency (unwarranted at that) is what their problems were, and still are in many cases.
I have seen many better companies than Lucid go bankrupt.Legancy automakers will slowly follow.Team Japan is fighting to keep ICE vehicles for as long as possible.
As much as this is an opinion piece this video contains so much truth that will be born out in facts in time. Great video Sam, Thanks 😊
I always want to take a contrarian point of view to these kinds of analyses. But, I find it near-impossible to make a case against what you are saying. Japan is in enormous trouble from where I'm looking. This will be existential within 5 years.
I would take what Elon Musk says with a grain of salt considering it comes from someone who is being voted by almost 60% of it's users to step down as CEO of a company he just took over, and is offloading Tesla shares like no tomorrow at a time where the share is down 60% YTD lol
Japan needs to be at atleast 10% EV's now with plans well underway for massive growth, otherwise take the auto industry over there and flush it down the toilet.
@@Outsider.Reviews nothing wrong with using public polling to decide your leaders, you don’t believe in democracy? Also he had Tesla stock as collateral to pay for twitter, so he is legally bound to sale it as Tesla stock prices lower
I find this statement both refreshing and unlikely "I always want to take a contrarian point of view"
the bankruptcy issue is the one no mainstream media channel likes to talk about
I wonder how many financial managers are shitting themselves at the moment as they look at the long term prospects of ICE auto makers. Either that or they are about to hit their retirement option button.
Media dare not talk about the risk of insolvency lest they risk losing ad revenue from auto manufacturers
Cute story, but the Japanese already know the environmental impact of an EV from build to scrap in todays climate is far more polluting than an ICE… they aren’t cashing in, the Japanese are following their legacy of building quality reliable products.
Taking into account the environmental impact of an EV build, the use of 3rd world labour to mine resources, the source of energy production used for recharging (which most are recharging at night from non-renewable sources), grid limitations from sudden uptake, the lack of battery recycling (including the exponential energy used in doing so), the shortened lifespan of the vehicle, the safety factor in a fire including the imposing environmental damage, and the range anxiety… that’s why they’ve stuck to hybrid.
1x Hybrid car lasting 20yrs, is better for the environment than 2x EV’s lasting 10yrs.
The Japanese brands are skipping the EV bûḻḻšhïṯ and looking to hydrogen, it solves all of these issue’s… but the safety factor is yet to be solved.
If you REALLY want to get your head around the EV scam… the average household uses more than TWICE the energy daily, compared to the daily use of an EV. So why aren’t we putting more effort into installing batteries into homes and solar, which would aid in reducing loads when the sun goes down??
Call me a conspiracy theorist. But EV’s are here to chew up battery resources thus keeping energy producers afloat, environmentalists focus on battery vehicles emissions not household emissions nor the environmental impact of EV production, EV vehicles get subsidised (chewing up more battery resources that would be better utilised in the home), most people have installed solar to combat increasing power prices however the energy companies are happy to use their energy generated to charge commercial business but only pay back 25% for feed in…
All whilst these EV “saviours” plug in at night after they get home from work and “think” they’re doing the right thing but unknowingly use fossil fuel or nuclear energy to charge their “chariot-of-deceit” using the grid… whereby that same battery could be providing green energy for the house that uses twice as much energy!?!?
You cannot take this id¡ot seriously... Japan's GDP is 19% manufacturing, not 89% as he's claiming...
Correct. It is around 20%….i dont get it. How can you make such a crazy statement without even having a glance on the actual statistics??? Services itself is c. 32% of GDP….
he is known to make stuff up
@@jonthemagicmelon4726 ok, you might say 39% or perhaps 49% if you really wanna push it. But NOT 89%!!! Japan is one of the most developed countries in the world. In these economies manufacturing represents a relatively small proportion of the economy. In the US it is getting close to 10%!!!
The "The Electric" dude that's why he's bias against gas vehicle DUDE!
@@viktorkatona7521 I watch because he occasionally makes a good point, amongst unbelievably drawn-out drivel and wildly inaccurate non-sense.
Those numbers are positively frightening for Japan, they appear to be on the brink of a massive economic disaster and seem to be standing there with fingers in ears going "la, la, la". For Toyota to have that level of debt and no realistic plan to avoid insolvency is criminal mismanagement I would have thought.
Rivian won’t go bankrupt first. It is being managed reasonably. Saudi’s likely will keep Lucid going. You are right in your analysis.
If Lucid keep losing money, Saudi Arabia is not stupid enough to keep it running
There is one problem with your analysis and that is that Honda, Yamaha, Kawasaki and other big Japanese companies make products other than vehicles and could transition away from making cars in the scale they are doing now. Also some of the companies you mention are tire companies and last I checked EV drive using tires. Japan's national debt is a big problem and that has serious impact on Japan's economy going forward.
Why would Chinese or Tesla use Japanese parts even if their cars do need parts?
Parts makers sell best to domestic. If Toyota, Honda and Nissan stop buying, they won't suddenly win all the orders from others.
Top 5 car models replaced by new Tesla’s by American owners was Toyota. Bmw, honda x2, and Nissan. 2019 data. Proves your point well!
EV's do not provide a profit stream down the line for the manufacturer and dealers as ICE cars. High cost EV's where virtually no profits at sale and little profits servicing and parts.
You're right. Tesla is a tech company for that reason. 2nd, Tesla cost to buy are higher for that reason. Henry Ford wanted to sell the business to GM provided he could keep the backend.
Monthly subs for premium connectivity from ~80%(?) is a glorious revenue stream.
If gm or Ford were getting $100 a year from 80% of the cars they've sold, what would their financials look like?
@@andrewsaint6581 I agree. Tesla makes the dollars upfront. If you own 1 for 15 years the cost per year is lower compared to ICE. 10 years ICE needs a rebuild. With batteries there is always residual value. 20 years out and that can be repurposed. So Tesla's business gets the backend revenue stream and the owner gets a product which stays current maintains value. Over time I think the trend is our friend.
The companies you list include at least one tyre company. My bet is that car tyres will continue to sell regardless of whether the cars are petrol, electric or even steam. Same goes for air bags, seat belts, head lights and car seats.
There is not anywhere near enough electrical generation capacity to charge EVs on a large scale. There are few planned plants, and it’s nearly impossible to obtain a permit. Electric transport is very inefficient as well. These are major headwinds, at least for the US and EU.
Until last week, I was quietly reserved about how long it will take for people to stop buying ICE cars. When I talk to friends, they are still in ICE car thinking mode.
But last week I did some calcs as I prepare to take delivery of a Tesla Model 3. I had previously thought the cost of ownership would be a bit more than replacing my 10yo car with a 5 yo car.
I was wrong, a Tesla works out more than 2x cheaper than owning and running a 5yo Subaru Outback!!
I was shocked. So I ran the numbers on a model Y vs our 18yo Toyota Prado. CRAZY - Prado costs more than 2x Model Y over then next 7 years.
Far out, we can run two model Y's for one old Prado.
Tesla's also work out way cheaper than Hybrid Camry, Rav4 etc too.
Ok so a model Y is not a replacement for a Prado in terms of 4WD, towing caravan etc. But at 2x the cost, I can rent a 4WD for holidays and still be ahead.
Contributing to the amazing numbers is the fact that the Oz Gov is waiving FBT tax and other tax breaks for EVs.
So, maybe Viking, you're right about people not wanting ICE cars any more!
Welcome to th new reality knowledge of electric transportation assistance to the transition to renewable energy and sustainable living for future generations consciousness
I HOLD ELON MUSK AND TH TESLA TEAM FULLY RESPONSIBLE FOR IMPROVING TH UNIVERSE WE reside in . Th future is amazing limitless energy abundance battery storage not needed
I've had my Tesla 4 for years. October 1st 2021 I got an app that tracked gas savings.
Anyway, it takes the rate of electricity your paying from your electric company, then figures how much you've saved in gasoline by calculating average gas price for your area.
I've saved over $2,500.00 in gas since October 1st 2021.
It gets even worse for Japan as they have an ageing population. Not only are they dramatically short of workers but they are short of consumers, at least the age group who will be buying cars. On top of this demographic time bomb, the automakers are wasting billions on developing hydrogen powered vehicles, which, as we all know, is a total dead end.
The Japanese tyre manufacturers should be fine.
The problem is Lucid and Rivian are still loosing money on each vehicle.
They are properly called “Stranded Assets”, as they have no value any longer.. The Oil & Gas industry has the same issue, millions listed as “assets” for Oil Reserves, that will never be brought up to be refined.. the best place for that oil is exactly where it is, underground.
Sadly the debt bomb extends far further than the car industry. Japan are world leaders in indebtedness. In fact the whole world has maxed out the credit card 😱
Tesla’s stock is down 65% as of today and leading investors are pointing their fingers at Musk. Talking about who Musk will disrupt might include his own company, wouldn’t you say? And, by the way, Musk’s share in the company is down to 13% following several stock sell offs. The notion he will no longer be CEO is not so far-fetched anymore.
Excellent analysis! I totally agree... can't wait!
Japan did not invent the ICE vehicle, they just perfected the production of it, I would not count them out so quick
Great points and analysis Sam.... Frightening, I guess it will cost a lot less to visit Japan soon ⁉
I am sorry, but a great analysis starts with using facts and NOT fictions. though he does make some interesting points, but he often mixes up facts with fiction…In particular regarding the Japanes economy….
@@viktorkatona7521 Could you expand on why?
@@winstoncat6785 for instance, manufacturing represents c. 20% of the Japanese GDP and NOT 89%! That changes things substantially re. his points on the Japanese economy.
@@viktorkatona7521 that is still 1 trillion dollar wiped out. 3x more than the evergrand debt
@@Rex-ww4cw The point remains he was way off and therefore misleading. This really should lower trust on any future stated 'facts,' I still find his channel informative and entertaining but simply put, don't believe everything you hear. People with good intentions and varying success in research, make mistakes. The video rate will likely do this more to Sam.
Sam, I do think Musk understands supply chains better than you. The ripples in the supply chain has global effects. He also went through a recession and survived it without going bankrupt unlike GM. FORD is in a worse state. The market is more competitive than ever and RIVIAN has way too complicated of an EV too make and won’t be profitable at current prices. They are also small unit variants like the model S and Model X.
Oh come on !
There is no supply chaine shortage !
It's all artificial !
Just because a few ships got stuck in the Suez Canal for a few weeks the whole world wide "just in time production broke down for years ?
That's nonsense !
When I was a child in the 1950s and the 1960s there were still plenty of things being delivered by horse and cart to people's homes daily
in Adelaide and Renmark. At my home in Adelaide these included milk at 5am and fresh bread at 1pm. At Renmark backyard toilet buckets were replaced daily also. All the full buckets were placed on a cart pulled by a horse!
Until the Americans fix their electric vehicle charging system, electric cars will not take off. Drive an electric car long distance, or even better, across country and you’ll see the problem.
good point..the Jap s especially vulnerable to the down fall of their ICE industry..
TSLA below $140 today. Looks like heading to $100. Where is the bottom on TSLA?
European countries' automakers are also carrying massive debt, steadily loseing ICE sales whilst gaining very little traction vs Tesla. For starters. Now the Chinese companies, chiefly BYD have begun their ramp-up.
Mercedes $126B, BMW $177B, VW $493B. Who's going to write their loans? At what rates given the risk? Whilst interest rates are rising and recession mounting?
Only Tesla with its huge margins can afford to lower prices and still make 5-7x margins vs legacy automakers.
Historically incorrect. Horse and carts were replaced by Electric vehicles and then were subsequently replaced by combustion engines.
Check out the Deficit Myth by Stephanie Kelton. The idea of high debt to GDP as problematic is problematic. It’s based on antiquated notions of economics. This doesn’t mean that Japanese car makers going bankrupt won’t hurt their economy, however, the idea that Japan’s debt to GDP is extreme and that this has put their economy in peril somehow is incorrect. Part of the reason Japan thrives currently is thanks to its high debt to GDP ratio. In a country with it’s own currency, as long as government spending doesn’t spur inflation, citizens benefit. Japan does not suffer from inflation, so the fact that the government has invested more in its people than it has usurped from them makes it a stronger society. Once this is understood, world economics becomes a bit less mysterious.
Japan plays the race card 😂 the insanity.
😂😂
I think culture is important to them as much as anything
very well documented... great overview of Japan's almost impossible challenges ahead! And Japan is my favorite country on the planet, I wish them well.
Thank you very much!
Clearly you have no obligation to answer this question, but why the "8304" after your name? Were there 8303 Michael Calmeyer Hentschels who took the handle before you on TH-cam? Just curious.
I think that the biggest part of the problem is not just a lack of planning but poor timing. ICE car manufacturers seem to believe that it is going to be cenuries before EVs outsell ICE which does not appear to be the case. There in lies the question. When will EV cars outsell ICE and what are the manufacturers, largely Japanese going to do when they do. It's like believing that the Titanic was not only unsinkable but that even if it got hit by a missile, it would take years to sink.
Your spot on, this crash is coming fast and hard for Japan, they've had their chance to turn things around a decade ago and missed it. The roads of generational disruptive transformation are always lined with the bones of the incumbents.
“In the same way a crackhead becomes addicted to crack,” this had me screaming. He really said it w/ a straight face.
What comes first? The crackhead or the crack?
@@TheBooban The chicken.
If TSLA does well in the middle of a recession/depression, then TSLA will become like a black hole into which any business remotely competing with it will be absorbed into it. Investors know Tesla will succeed. They will look for a safe refuge for their money. The clock is ticking and anyone not onboard soon is going to deeply regret missing the boat.
EVs just aren't doing that well in the US. Ford makes money on ICE vehicles but loses money on EVs. Every aspect of Sam's analysis is based on the unsupported theory that EVs are going to take over. However sales in the world's largest car market, (The US) do not yet show that.
it is sort of fun watching the slow trainwreck
You are right that the disruption of the ICE industry by Tesla and now China's EVs as well is much bigger than Henry Ford's disruption of the horse and buggy industry. However, you've still greatly understated the degree of disruption globally. The disruption globally includes not just the ICE auto manufacturing and servicing related industries, but the even larger vested interest globally in oil and the entire fossil fuel industry. To quantify the disruption of just the oil and natural gas industries, you need to understand that the valuation of just today's "proven" reserves IN THE GROUND carried on the financial books as assets of the major oil and gas producers amounts to more than $30 Trillion!!!
Electric cars are not "the future".
Eletric cars are the present.
Say dat again
Electric vehicles are the GIFT for FUTURE GENERATIONS CONSCIOUSNESS 👍👍👍👍👍👍
This is a brilliant report. Why is no one else talking about this?!?
The contribution of the manufacturing sector to Japans GDP is 20% not 80%. Like most other advanced countries the majority of Japan's economy comes from services.
1:23 “they did pretty well..” winning all or most of their races. That’s ‘cause they’re Vikings.
Meanwhile, in China, SEVEN EV's CATCH FIRE EVERY DAY.
do you know how many IC cars catch fire per day? 3 times.
Never thought we would ever talk about crack on this channel but here we are...
Crackhead more like
!!!!!!!!!😀
The first companies to get into trouble will be those foreign companies making ICE cars in China.
Chinese customers have lots of choice with cheap electric cars plus its government backing EV's.
The next country to have problems will be Germany. Their expensive cars will have competition from Tesla in Europe.
VW make cars in both Germany and China.
Everyone is concentrating on EV and declaring internal combustion for death .Nobody talkes about country that does not have the utilities needed for EV Africa South America India etc you don’t get anywhere with EV.
هم من الأساس يستعملون الحيوانات للتنقل واغلبهم يتنقلون بالدراجات النارية لهذا يجب شحن لهم الدرجات الكهربائية
What's alarming is someone like yourself can spew this sort of nonsense and 100K+ people are buying it. Building an EV is not that complicated a task, and ICE is a very small component of the automotive industry. Tesla's competitive advantage is in it's software, not hardware, and Tesla's hardware is price competitive only as long as government subsidized carbon credits last. ICE to EV transition would last far longer than most EV bandwaggoners seems to think simply because the ICE to EV transition is an infrastructural transition, not the end user device transition (and naturally, infrastructural transitions occur over span of multiple decades, not several years). I'm not going to go into details as to the debt structure as it'll take a bit too long, but that part isn't exactly a worry either. Look up who owns most of their bonds 🙄
we already have bailed out nearly all car manufacturers. why would it be different this time
Hybrids are a much better option for most people than battery electric. Toyota is doing very well. Toyota stock is up 20% so far this year. Tesla stock is down 20%.
I think that Japan' s problem is deeper than this. A third of the population is in their retirement years. Less people to do work and likely less purchases of manufactured goods across the board. Health care use will go up and you could see an importation of workers in that field.
Just because Japan is a heavy automotive economy doesn’t mean all the jobs disappear with EVs. Factories can be retrofitted. There are growing pains but these companies will make the shift.
You have done your research well Sam, I ran some numbers and you are pretty well on point. Very good video and summary of what is about to become of the Japanese automaker’s,very sad but it is what it is. What is the answer? I guess time will tell.
Thanks Mate!
Ideally they would pivot and do something amazing and unexpected. However they are old (relative to population) and becoming a smaller population. Perhaps they will get off the craving for more crap and endless pursuit of money and live better lives than the rest of us. I guess for that to happen their population needs to more than halve.
Hundreds of new power plants should be under construction right now to support an electric car future. It's just not happening. California has already had to tell electric car owners not to charge their cars. Because there was insufficient electric power available.
If something isn't done about this, it will delay the transition to electric vehicles for decades.
It’s ironic that the worlds biggest and best electronics makers for decades failed to adopt electrification of automobiles 🚙……
Not sure if it's ironic, but it's definitely a head scratcher.
Meanwhile Japan’s bullet train, another modern miracle, marvel of engineering, IS electric
They DID go bankrupt 40 years ago building out the shinkansen network. JNR was privatised and broken up into 7 separate companies. US$500 billion in debts was transferred to the national budget. Enough to build Trump's wall 8 times over.
Brilliantly Explained and thought out! Nice one mate!
Elon Musk is to the 2000's what Henry Ford was the 1900's.
No that’s Wang Chuanfu
But with 2 major differences. Ford made car ownership AFFORDABLE and was highly PROFITABLE. TESLA is neither. Tesla posted its first ever profit in 2020 after 17 years in business, and then only because of selling carbon credits to other vehicle manufacturers. So I say BULLSHIT BWANA to your comparison.
Elon is on heigh dossage of artificial testosterone shots... Reason for his erratic behavior. WWE superstar Christ bennout killed his family and himself due to psychotic episode caused by abnormally heigh testosterone dossage.
X 99
No. He’s not. He didn’t do anything for his companies, all the boards at his companies hate him cus he tweets too much
Japan generally and the automakers in particular, are suffering from "Paradigm Lock". This is an inability to see outside the current paradigm and to bend facts to stay within i But the real world has changed. There is no going back. They need a visionary leader in parliament and to get rid of Toyoda immediately. Will this happen? I doubt it - and the consequences will be dire.
A 7 bil auto plant becomes a 10 million warehouse when it stops building cars
A great analysis, well presented.
If toyota and vw have financial problems why they then Pay extreme dividend every year to shareholders? Man your financial analysis of companies is total on the moon.
Ford always has had a nice dividend also. I think sometimes big dividend companies know they will attract a ton of investors looking for the cash flow
Because they need to keep the investors from pulling out
EV has the energy stored and you cannot take extra energy with you, a normal car can extend its range by a couple of jerrycan of fuel in the back of your car. Australia I would not go in to rural areas with a EV.
SONY and the other electronic giants were amazing, everyone had Japanese TVs, DVDs, VHS, Stereos, etc... and now? I don't think I have a single Japanese product anymore... they lost the electronic revolution to streaming and are about to lose the electrification next...
Japan made all the millions of defective air bags too. In a few years their economy will colapse. Takata Corporation
It is truly amazing that none of the Japanese automakers have gotten on the EV bandwagon. Sure, Nissan has the Leaf, but they never expanded on this concept over the past 15 years. Toyota's BZ4X was an utter disaster with wheels falling off the 2700 EVs made, and all were recalled. Now Toyota is having BYD build its eCorolla, while Toyota continues to promote hybrids. Toyota & Honda also wasted 5+ years trying to make a competitive & compelling hydrogen vehicle, until they figured out fuel (eg, fool) cells will not work. All of the Japanese automakers are now 5-10 years behind Tesla and the ~150 Chinese EV makers, and there is zero chance they can ever catch up. The decade will end badly for all of the Japanese automakers, as well as the Japanese economy.
Japan does not have the electrical infrastructure to go all electric. They know that ice cars is more practical for their geographic situation for now.
Great analyzing of the disruption. Can you cover the automobile Valley of Death and the technology adoption curve. I pull up these graphs to naysayers plus the Tony Seba's 2 photos of NYC in 1900 and 1915 to illustrate the doubters around me and ask them to show me refuting graphs of theirs.
The gap between horses and ICE is a lot bigger than the gap between ICE and EV. The EV transition is starting to look like it will take longer than I thought. If the prices of batteries come down enough, that would help a lot. Higher energy density and better cold weather performance would help too.
@@incognitotorpedo42 the higher battery prices due to lithium spot prices will have battery manufacturers look for alternatives like sodium iron phosphate or the lithium manganese iron phosphate as it uses less lithium than lithium iron phosphate batteries.
@@incognitotorpedo42 fuel prices jumped 30 cents per gallon overnight, refineries shut down due to freezing weather.
I mentioned the problem with switching to electric cars 40+ years ago with a college instructor. The US wouldn't go for it then as the unions would have a fit with job losses due to the use of so much fewer parts using electric motors versus ICE. There are about 20 parts in an electric motor and about 1000 parts in an ICE. I believe Japan is just sitting back right now as is Toyota, waiting for better battery technology. The demand for Lithium is a major factor but other sources of battery power will develop and then the Japanese will jump in. Panasonic will up their production when Tesla switches. Since Toyota already has the Prius and other Hybrids it won't be that hard to remove ICE motor and rely totally on battery packs. Whether the Japanese can switch that quickly will be the problem.
Global power grids can't support the charging networks necessary to go all EV even by 2030. So the governments will be forced to allow ICE vehicles for anothef 15-20 years past their deadines. All the cheap EVs in the world can't charge when charging stations are only 6.5kW, as the majority of them in the US are.
Tesla's V4 Megacharger, just one of them requires a power substation larger than a 20 bay charging station. Ain't gonna build those in five years. Do your research into the lead time for power station components and grid replacement. Eminent domain. Public hearings. Financing. You're looking at a Manhattan Project in every US state at once.
no worries for the Japanese auto industry. The Japanese government seems not worried at all. In fact, they are trying to double Japan’s military spending to 2% of the GDP or more. Of course, this is under the guidance of the US. So if anything we should worried about Japan, it’s their military expansion or outward aggression …
I agree. One issue I feel is that investing in the Japanese stock market is almost impossible for a foreign private investor, the only option is Japanese funds and all the funds that I've looked at seem to have Toyota as their largest holding. For this reason I have never invested in Japan. I do hope that Japan succeeds, they are a hard working people who make fantastic and high quality products, but their companies are very conservative, driven by an overtly conservative management and resistant to change.
I've stocked enough parts to keep my ICE vehicle going for decades; as long as fuel is available.
ICE cars & electric cars have a lot of similarities. Mostly, the drive trains are different. I don't think changing from ICE to electric, won't take that long, once electric cars start to dominate the market. I think we are at least a decade away, before EV'S dominate the market, outside of Europe.
China's adoption of EV (BEV + Hybrids) is higher than Europe's. New sales in China will be around 50% by end of 2024.
@@aldojgt True I've been to China 3 times since 2015. In 2015 BYD was very common back then.& my last trip in 2019, you could see a notable increase. However that don't mean much for Australia. Only about 2% of new cars are EV'S in Australia. Africa, south America, India still have a long way to go, before EV'S become the majority of new cars & many of these countries keep there cars 30 years, it's going to be a long time since they are phased out.
I think we need to factor the following into the discussion.
Japan makes Ev drive, motors , EV batteries,Bridgestone tyres work on both ICE and ev vehicles AND IS OEM for many US manufacturers. It is also worth remembering how many countries do not have the grid capacity to cope will full electrification of vehicle fleets.
Love your work and passionate bias .it's healthy
Grid capacity isn't really a problem for transportation. It's a problem for heating (particularly in colder climates). But it takes 20 years to roll over the U.S. fleet and the average miles/vehicle is about 25 per day. That's about and extra 8.3 KW/day added to the electric grid per person Or think of it as about 250KW / month. The typical household electric bill is about 1MW/month. But we're only rolling over 1/20th of the fleet per year. So we're really adding about 12.45 KW/household/year or about 1.2% of the electric grid per year. So it isn't as huge a problem as we often think. But if we do nothing it will creep up on us.
japan is not china
china has stuff japan can only dream of
huge market
huge reserves
Huge company conglomerates
none of japan's conglomerates even compare
Oh and toyota and softbank are on the brink of bankurpcy.
Excellent video! Fairly new to this site and have found myself " Binge" watching these videos. Explaining the impending doom for Totota - etc, with numbers
is not an easy thing to do while making it interesting! Keep up the great work!
Glad you like them!
Some industries are too big to fail. The us government has bailed out us automakers so many times why wouldn't the Japanese government do the same. If I were a betting man they'll probably only get money if they switch fully to EVs
The only reason Tesla can claim to be successful
No, there will be about 30% market share for EVs.
Short range travel cheap EVs
And high powered Luxury EVs
the only option is statehood. not sure if the other states will agree
Bridgestone and Yokohama? Last time I looked EVs need tyres too.
Not from Japan
@@door1479 of course not. They are worldwide name brands that don't just get used on Japanese cars. There was also an electrical company in the list. Obviously they're in trouble as people switch to electric cars....oh wait. I assume Sam is invested in Tesla due to his outlandish bias and willingness to believe everything that Musk hypes. Pity they don't pay dividends. Should invest in the copper, lithium and cobalt mining infrastructure that will be needed for the big switch. Only one problem...it doesn't exist!