Electric vehicles sales surge in Asia: Gerschenkron and EV production in China

A BYD dealership in Phuket, Thailand.

According to Bloomberg "BYD Showrooms Are Bustling Across Asia After Iran Oil Shock," people are reacting to gas price increases resulting from the war with Iran by looking at buying electric cars.

Maybe the US too ("What to Know About Electric Cars When Gas Prices Are Surging," New York Times).  From the article:

In the United States, prices for new electric vehicles have fallen but still average $6,500 more than vehicles that run on fossil fuels, according to Cox Automotive. From a purely financial point of view, an electric vehicle makes sense for people who will save that much on fuel and maintenance during the time they own it.

The New York Times offers a tool to help people make that calculation based on local electricity prices and driving habits. But there is more to the decision than dollars and cents. Some benefits of electric vehicles are hard to put a price on, like the peace of mind that comes from not being at the mercy of geopolitics.

Alexander Gerschenkron was an economist who studied development economics.  

In "Economic Backwardness in Historical Perspective," he makes the point that later developing countries have an advantage when it comes to adopting new technologies, because unlike legacy advanced economies, they don't have billions invested in older technologies.

Vintage Marathon Oil gasoline station in Miami, Oklahoma.

China (in many technologies) is a great example.  One is with motor vehicles.  While their development of the automobile industry started with gasoline cars, many built through joint ventures with then advanced car makers like GM and Toyota, the companies were able to adopt and adapt the technologies for the development of their own domestic auto industry.

But China, seeing fossil fuel as a legacy fuel and making them dependent on the world oil economy, moved to the development of electric vehicles (and solar power, although the country still burns a lot of coal and is adding coal plants, since they have large supplies of coal domestically sourced) ("Chinese BYD cars emerge as threat to automakers," Detroit Free Press).

BYD started making electric batteries before moving to cars.  More recently they've developed a fast charging system that allows cars to go up to 600 miles between charges--except to provide this at scale would require serious electricity transmission upgrades.

Now China is years ahead of the American auto industry, which is losing billions of dollars trying to compete in the electric vehicle market ("Carmakers Took a $50 Billion Loss on EVs," Autoweek). And they are an increasing force in global markets ("How America’s EV retreat is increasing China’s control of global markets," CNBC).

During the first Trump Administration, I remember the Economist writing about this ("America’s domination of oil and gas will not cow China"), and Trump's preference for coal ("Trump orders coal revival, but market favors natural gas," NPR) and oil, stating that in energy, China is the future, and the US is the past.  China is an electro-state and the US is a Petro-state ("The Petro States of America," Bloomberg). 

Foreign Policy Magazine develops this thesis further, ""How the Iran War Could Consolidate China’s Energy Dominance: Amid global oil and gas disruptions, China stands prepared for the electrostate era."

Petro states as a sub-national phenomenon.

Wind turbines operate at a wind farm near Whitewater, California. Renewables tend to be lower risk than oil projects, but they also tend to deliver lower returns. / Getty Images

I apply the concept of petro states at the sub-national scale as well--many states in the US are pro fossil fuels, and have hampered the development of alternative technologies ("Making oil is more profitable than saving the planet. These numbers tell the story," NPR).  

In large part, it's because excise taxes on oil and natural gas are a huge revenue source for states ("Congress gave a break to coal producers. Wyoming worries it’ll carry the loss," Wyoming Public Radio).  From the article:

Over the last 50 years, the state of Wyoming made bank from coal – billions of dollars to fund the government, schools, roads and parks. The state now has its own sovereign wealth fund thanks to coal.

Here’s how it works: When coal is mined on federal land, the mining company pays royalty fees. Half of those royalties go to the federal government and the other half goes to the state, and only Congress has the power to change that ratio.

President Trump’s GOP spending bill lowers those royalty fees for mining companies from 12.5% to 7% through 2034.

Or they continue to provide tax incentives for increased production ("Tax credit for huge oil producer raises questions about Utah board’s transparency," Salt Lake City Weekly) and other ways to promote production ("Supreme Court backs Utah oil railroad expansion, endorsing limited version of key environmental law," Colorado Public Radio).

For example, Oklahoma, with oil and natural gas interests (fracking especially) is fully committed to fossil fuels, but is toying with solar and wind ("As demand grows, Oklahoma considers its energy path forward," Daily Oklahoman).  Tulsa and Oklahoma City are home to many regional headquarters and a few national firms.

North Dakota ("Studies underscore oil and gas industry’s significant impact on North Dakota’s economy, communities").  Kentucky ("Heavy reliance on coal has eroded a KY economic advantage. Can Trump reverse the trend?," Kentucky Lantern). While New Mexico, which has a good producing section of the Permian Basin, and Pennsylvania--home to the nation's first oil well, but a center for fracking, are less committed.

It's the rare state, like California, pushing a sustainable fuel future despite historically having been a large producer.  Maybe the switch is due to significant drops in production ("As oil industry in California wanes, what will become of shuttered refineries?," Daily Breeze).

An oil pump jack stands near a field of wind turbines in Nolan, Texas. Oil companies are under pressure to pivot more swiftly toward renewable energy. Here's one reason why that's not happening so quickly: It's still incredibly lucrative to sell oil. / Getty Images

Texas is the mother lode of oil production in the US.  It is also a major wind power producer.  

Like the Trump Administration ("Trump Officials Weigh New $1 Billion Deal to Stop Offshore Wind Farms," New York Times), some pro-oil interests are working to deemphasize wind in the state's mix of energy sources ("The War on Wind Rages in Texas," Earth Day).

Originally the Humble Oil Building, named before Humble Oil and Refining Company was fully integrated in Esso (which later became Exxon, then ExxonMobil).  Now it's the ExxonMobil Building.

Texas is the big winner nationally as Houston is the center of the oil and gas industry.  For example, Chevron is moving there from California.  The company in various forms has been headquartered in the SF Bay region since 1879.  

Production and supporting services companies often relocate from regional centers ("The economic impact of Expand Energy moving headquarters from Oklahoma to Houston," News9 OKC), as the oil industry business cluster there continues to intensify.

Is the Growth Machine a casualty of the culture wars?

When business interests told the Tories in the UK that Brexit was likely to have many deleterious effects, Boris Johnson, who went on to become Prime Minister, was quoted as saying "F*** Business" ("Boris Johnson promised to “fuck business”, and that’s exactly what he did," New Statesman).

The Growth Machine thesis from urban sociology is focused on local government, and how political and economic elites, despite seemingly intra-elite competition, are united on a real estate focused pro-growth agenda, since real estate development is the primary source of revenue and economic activity for local governments.

"The City as a Growth Machine: Towards a Political Economy of Place" (American Journal of Sociology, 1976) lays out the concepts, which were expanded in a book, Urban Fortunes: The Political Economy of Place. 

Political science has its own theory, that of the Urban Regime ("Urban Regime Theory," The Wiley Blackwell Encyclopedia of Urban and Regional Studies).  

I argue that GM is better at explaining why, and UR the how.

Anyway, more recently, Republican culture wars, albeit more at the level of state government interfering in local economic development, but when there is some sort of state nexus, in some places, is triggering anti Growth Machine actions.

Florida and Disney.  The primary example is Florida, where Disney complained too late to make a difference, about Florida's various anti-gay legislative acts after being shamed and prodded by employees ("After protests, Disney CEO speaks out against Florida's 'Don't Say Gay' bill," NPR, 2022).  But it still enraged Governor DeSantis

Probably everyone in America has heard of Disney World, which is a major attraction in Orlando, which in turn has led to the placement of other attractions there (like Universal Studios Florida and SeaWorld), and is a major driver of Florida's economy--which doesn't have a state income tax.

Governor DeSantis attacked the special district structure Disney uses to operate its property there, which is massive, and spans two counties.  At the time of its creation, local government lacked the capacity to provide services to the level Disney required, so the Reedy Creek Improvement District was formed--like an urban business improvement district, but on a massive scale.

Last year, they changed the structure, not realizing it triggered $1 billion in bond payments by the two counties in which Disney World is located.  So they did a new bill this year.

They changed its organization and appointed political flunkies with no expertise but culture war bona fides to oversee the district.  Usually, in GM/UR politics, the people appointed to such boards work hand in glove with the business interests.  DeSantis appointed people who are oppositional.

But before that took effect, Disney had the board pass contracts making Disney pretty much impervious to DeSantis' political machinations.

He didn't take it well, and has been threatening all sorts of retaliation.

In the interim, Disney created a webpage outlining the economic impact of Disney in Florida ("Disney Shares ‘The Value of Reedy Creek’ Post on Community Outreach Site Outlining District’s History & Benefits for Florida," WDWNT) 

-- The Value of Disney Reedy Creek to Florida, Walt Disney World/Disney Connect

The firm pays more than $1 billion in taxes annually and employs 75,000 people directly and 16,000 indirectly.  Plus there is the multiplier effect of other jobs created as a result of the economic activity around Disney World. 

Today Disney announced it is suing Florida for what they've been doing on Constitutional) grounds of retaliation versus free speech ("Disney sues Gov. Ron DeSantis, alleging political retaliation," Washington Post).

I don't think this bodes well for Florida, because Disney's attorneys and facts are much better.  Plus, wrt DeSantis' political campaign for President, it will keep him in the news in negative ways.  Way more people like Disney than they like the culture wars.

Battery plants and red states.  If you don't believe in climate change, you don't want to encourage alternatives to fossil fuel consumption.  Electric cars are a threat to gasoline consumption.  Republicans, especially oil interests like Koch Industries, don't like that very much.

Electric vehicles need batteries, lots of them, and battery manufacturing plant are seen as a key element of the developing industrial ecosystem for electric vehicles.

Last year, Georgia's governor, Brian Kemp, got pushback for providing tax incentives to an EV plant ("Kemp, Perdue spar over planned Georgia electric car plant," AP).  

And in Virginia, Republican Governor Youngkin--with presidential ambitions--said no to a battery plant owned by a Chinese firm ("Youngkin blocked a battery factory from coming to Va. and an entire economic sector’s potential," Virginia Mercury).  Instead that plant and its estimated 2,500 jobs went to Michigan.

OTOH, the redistribution of manufacturing for electric vehicles will lead to more production in red states, which could have an impact on Red State government positions wrt electric vehicle production and climate change more generally ("The unlikely center of America’s EV battery revolution," "Battery factories could make red states a driving force for climate," Washington Post).

Bud Light beer.  Is excoriated because they did a promotion with a transsexual ("Anheuser-Busch InBev Executive Speaks Out About Bud Light Controversy," Newsweek).

M&Ms.  Trolled Tucker Carlson ("Tucker Carlson is once again enraged by "woke M&M's" lack of sex appeal," Salon) good ("M&M’s punked Tucker Carlson with Maya Rudolph Super Bowl fake-out," LGBTQ Nation).

Culture wars and the "natural" conservative alliance with business.  It will be interesting to see how this plays out.  Some donors are backing away from DeSantis on this issue.  

But at the end of the day, most big corporate donors are likely to acquiesce, so long as their particular companies remain on the conservative good side, and their primary issues--low taxes, minimal regulation--are covered.

A good as way as any to get conservatives to drive electric cars

In general, conservatives don't believe in climate change and advocate for fossil fuels. Koch Industries, a big oil producer, fund a variety of efforts to fight policies that promote alternatives to oil and natural gas ("Group tells minorities, ‘We need fossil fuels’," Energy and Engineering News).  Conservatives have come out against tax incentives for electric battery plants in Georgia ("Georgia judge nixes tax break for electric truck firm Rivian," AP), and for wind and solar installations, neglecting to acknowledge tax benefits given to oil production, etc.

Technically, electric cars still use fossil fuels primarily, but this is changing as wind and solar power make up a greater proportion of the energy mix.  

That being said, an electric car is better than an internal combustion engine powered motor vehicle, but it's still a car, and sustainable modes--walking, biking, transit--are still better than an automobility dependent paradigm.

I call it "next generation asphalt nation."

Although long term, switching to electric vehicles does reduce the nation's dependence on oil, and that has a number of domestic and foreign policy benefits ("Oil dependence | The US as a Petro-state and gasoholic | and war").

That being said Elon Musk's pro-conservative trolling on Twitter is turning off liberals and engaging conservatives, so much to the point that they are becoming interested in driving Teslas ("'Tesla is becoming a partisan brand, says survey'," Electrek).

Tesla’s net favorability among self-described Democrats in the U.S. fell to an average of 10.4% this month through Nov. 27, down from an average of 24.8% in October, according to Morning Consult. It rose to 26.5% from 20% among self-described Republicans during the same period.

Maybe he's playing the long con.  How will the Kochs and other pro-fossil fuel interests respond?

And the plus for liberals is that there are an increasingly number of electric cars from other manufacturers, manufactured better and often less expensive ("Tesla Is No Longer Alone in the Electric Vehicle Race," TIME).

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-- "Electric bicycles as a quantum opportunity for transportational cycling: can e bikes be conquest sales versus cars?," 2022
-- "Revisiting the 2016 entry, "Ford Motor Company as a transportation company not a "car" company: bike share and small scale transit"," 2021 (specifically the section "I was wrong about Tesla")

Valley Regional Transit (Boise): Pollution Solution marketing thrust | Transit is/as the Pollution Solution

The transit agency in Boise is positioning its ongoing shift to electric buses as the "Pollution Solution" although this is more about the switch to electricity from diesel.

 

But I think that the idea of transit as "the" "Pollution Solution" vis a vis motor vehicles and the reality that most trips are of one person is a great marketing positioning regardless of the fuel source.

-- Great cartoon-based brochure, Pollution Solution, Valley Regional Transit

Networks as a commodity or differentiator: EV charging networks

There's an article ("There's An EASY Fix For Our EV Charging Network," CarBuzz) about how one of the problems with electric vehicles is the different standards for charging networks, and specifically how Tesla's system is incompatible with others.

The article suggests that it's in Tesla's interest to make its network compatible, because that will reduce reticence on the part of potential EV buyers.

As mentioned recently, cities have a real issue in providing access in rowhouse neighborhoods ("Earth Day 2022").  

In Seattle, the City Light utility instead of constructing buildings on lots, wants to put in EV chargers ("Seattle City Light Plans More Surface EV Charging Lots in Dense Neighborhoods," The Urbanist).  And there are real problems with chargers now in terms of them actually working, people blocking them, etc.

ATMs.  The story reminded me of how in the beginning of ATMs, banks saw them as a key differentiator and a way to get more customers.  So they didn't share their networks with other banks in their market, but were focused on adding affiliates in other markets.  

The classic example is the MAC network that started in Philadelphia with Philadelphia National Bank.  

When I moved to Washington in the late 1980s, MAC was a big thing.  When I worked on television about telecommunications and IT in the early 1990s, I came across this article about it ("MAC—Philadelphia National Bank’s Strategic Venture in Shared ATM Networks," Journal of Management Information Systems, 1990)

Today, it mostly doesn't matter, people don't think of particular banks and ATM networks, except when they want to avoid fees when they take money out standalone, at machines in networks in which your bank is not a member (best way to avoid this is to buy something at a pharmacy or grocery and take money out).

Gasoline too was once differentiated.  Back in the day, gasoline companies like Texaco, Gulf, Standard, Conoco, Shell, Esso, etc., invested a lot of money in branding, advertising, and points of differentiation--from clean restrooms at Texaco to "touring services," maps, and special blends of gasoline, etc.  

Mobil redesigned its stations to be particularly design forward, etc.

-- Mobil logo design

-- "The gas stations that Eliot Noyes designed for Mobil Oil," Domus

Now, gas is gas.  Do people really go out of their way to buy Chevron or Speedway gasoline?  Well, they might, especially if they participate in loyalty programs that provide discounts on the cost of gas, but other than that, no.

Tesla supercharger network.  It truly is a differentiator now.  It charges cars so much faster than a typical charger.  And at least in the beginning, Tesla offered "free charging for life" or other charger network access incentives as part of the car marketing and buying process.  People are bummed that these incentive programs are being eliminated.  

OTOH, there are complaints that even Tesla's branded supercharger network isn't always well maintained.

New competitive advantages, even with "commodities."  But, this article ("More On Tesla Opening Up Its Supercharger Network To Other EVs," InsideEVs) makes a very good point about access still providing the capacity for differentiation or at least competitive advantage, in that cars of competitor marques using the network would have to provide trackable information that Tesla could use for better understanding the market, as well as having the names and contact information on non-Tesla EV car owners.

Earth Day, Saturday April 23rd

 Some communities create an Earth Week or Earth Month, not just an Earth Day.

In the DC area, one of my favorite activities is the GreenFest sponsored by Montgomery County, Maryland and this year held at Brookside Gardens.  It's a model for something I want to try to create here in Salt Lake, hopefully as soon as next year, in conjunction with my participation as a board member of Sugar House Park.

Oil dependence and transit.  WRT Earth Day issues, given the rise in oil prices as a result of uncertainty in the market created by Russia's invasion of Ukraine, there have been various articles with suggestions on what to do.  Interestingly, the International Energy Agency suggests consuming less (A 10-Point Plan to Cut Oil Use).

By contrast the Washington Post editorialized for more production ("Another energy crisis is here. The U.S. must be realistic about what’s next."), albeit for other steps as well.

-- "Oil dependence | The US as a Petro-state and gasoholic | and war," 2022

And while some states and legislators are calling for a gas tax holiday ("As states consider gas tax holidays, don't expect big savings," CNBC), Germany is making public transit practically free, charging €9/month, when a pass for transit in the core of Hamburg is normally €72/month , although they are also reducing gas taxes ("Germany unveils measures to tackle high energy prices," Die Welt).

The reality is that with the sprawl land use paradigm, it's difficult to substitute transit for driving, because it many instances, transit service doesn't measure up--it doesn't go where you need to go at all, or it takes an incredibly long time to get there, plus the distance to the final destination may be considerable.

As blog commenter charlie once said "transit's killer app is saving time and money" (paraphrased).  If it doesn't save time, and in fact costs a lot more time, people won't use it.

Transit also has great opportunity from electrification, as coastal states could generate the bulk of their electricity from off shore wind turbines and tide-based energy generation, and this energy could be used to fuel buses and trains.

2.  Cities aren't necessarily green but they are environmentally superior to suburban sprawl.  Cities use less energy than suburbs, for transport and household fueling, compared to the suburbs, even though they import goods and services, especially food.

This is discussed in the Green Metropolis argument by David Owen, first in an article in the New Yorker, and later in book form.

-- Green Metropolis: Why Living Smaller, Living Closer, And Driving Less Are The Keys To Sustainability

3.  Other environmental issues to think about:

Big Oil obfuscates about climate change.  Not that we should be surprised, but PBS Frontline has a three-part documentary on the subject ("The Guardian: ‘What we now know … they lied’: how big oil companies betrayed us all," Guardian). The first episode ran Tuesday.

Lithium recycling.  "Lithium costs a lot of money—so why aren’t we recycling lithium batteries?," Ars Technica

Household Energy Poverty. "People are struggling to pay their energy bills – here’s a simple idea that could help," Guardian.  Makes an interesting point that you could index the price of household fuels, providing a basic amount for free, and charging more, indexing price, with a rise in consumption.

"Green" Hydrogen as an alternative to gasoline and diesel fuel.  "Forget passenger cars, here’s where hydrogen make sense in transport," Ars Technica.  There's a lot of talk about green hydrogen.  It doesn't make sense for cars, but could for long distance trucking and maybe transit.

Ethanol.  To cut prices, the US has authorized a greater percentage of ethanol in the gasoline mix ("The Biden administration gives a green light to a fuel that could be even dirtier than regular gas," The Verge).  It's also not particularly good for the environment.

In the US, ethanol is made from corn, so it's not particularly energy efficient, and it raises food prices.  But corn and ethanol producers like it and it has led to an increase in incomes for corn farmers.  If the US made ethanol from waste feedstocks like in Brazil, it would be a different story from an efficiency standpoint.  There sugar cane waste is the primary feedstock.

Ethanol production in the US should be ended, but it's ensconced in the political system of the Midwest so it's pretty untouchable ("Stop the ethanol madness," Atlantic).

Parley's Creek in Sugar House Park, Salt Lake City.  Most of Salt Lake's water supply comes from snowmelt runoff from the Wasatch Mountains.

Drought. Moving from DC--tons of rain--to Salt Lake/Utah has really made me see the impact of drought, resulting from less snowfall and rain, which likely is the result of climate change.  

Some communities have stopped issuing building permits because they couldn't guarantee water supply.  Places with high rainfall and water supplies likely will have greater advantages in terms of economic and population growth going forward.

Drought and agriculture.  Over time, just because there is no other choice, water conservation will have to be a significant priority.  Eventually, it will have to include making choices about agriculture in terms of water use.  For example, Utah's greatest consumer of water is agriculture, and their primary crop is alfalfa--feed for animals--that is sold to China.  It doesn't make sense to dedicate most of the state's scarce water resources to China.

Electric cars.  Are about the environment, sort of, but not about "living smaller, living closer, and driving less."  It's a form of what I call "Next Generation Asphalt Nation" (there is a book titled Asphalt Nation by Jane Holtz).

Photo from "Shell to acquire UK’s biggest electric car charging network," The Driven.

Charging points in rowhouse neighborhoods.  But I have to say one issue I haven't thought enough about is that of providing access to high quality, safe charging infrastructure in rowhouse neighborhoods, many of which don't have on-site parking.  

I know London has been installing charging stations on light poles ("Powering ahead: six new ways to charge an electric car," Guardian), but you have to figure a way to move the cars once they are charged, so that others can use them.

The Guardian article also covers hubs in urban parking structures, installing charging infrastructure at the curbside in curbs and in street furniture (Connected Kerb), and in "street cabinets" used by cable television companies.

Hmm, while most communities are eliminating individual parking meters in favor of parking meter pay stations and numbering slots, parking meter infrastructure could be a way to deliver charging points.

Geothermal opportunities in abandoned fossil fuel wells.  Old oil and natural gas wells can be entry points for geothermal energy generation ("Clean energy is buried at the bottom of abandoned oil wells," Vox).

Revisiting the 2016 entry, "Ford Motor Company as a transportation company not a "car" company: bike share and small scale transit"

The Congress for the New Urbanism publication Public Square is somewhat Panglossian for my taste.  They just published an article, "Ford promotes street grids," about how Ford Motor is supporting the efforts of Bastrop, Texas to re-orient its urban form to a grid.

Myself and others pointed out that Ford Motor Company, and other auto companies, foremost focus on the promotion of automobility, regardless of this particular project.  You can hardly say coming up with the funding for a video indicates that the company has been transformed.

This ad was published by Ford in 1953, their 50th anniversary, as part of a series.The title: "The street will never be the same again" was prophetic in terms of the impact of the car and automobility on center cities. 

My joke is that the current state of Detroit is what the auto industry intended to happen to cities, because it wasn't in their interest to have center city urban form promote mobility alternatives to the car (walking, transit, biking).

In my comments on the article, I mentioned an entry from 2016, "Ford Motor Company as a transportation company not a "car" company: bike share and small scale transit."

While I think it's a great analysis from that point in time, a number of things have changed in the interim, and a major conclusion I drew is wrong.  Here were the major points:

-- Millennial demographic and psychographic changes are changing the US automobile industry.  That's still true.  Fewer people were buying cars overall, especially younger segments.  More people are buying trucks, to the point that GM and Ford have announced a reduction in the sales of cars while expanding the sales of trucks and SUVs ("Ford to stop making all passenger cars except the Mustang," NBC News).

But with the pandemic, more people took up automobility as opposed to using mass transit.  

-- Telecommunications enables car use without car ownership.  This is true, but few companies have figured out how to make money doing so.  Mercedes, BMW, GM, and others have dropped out of the business of car sharing.  

More recently, ride hailing (Uber, Lyft) has been repriced upward as drivers leave the business because of minimal profitability and an unwillingness of venture capital to continue to subsidize rides ("Farewell, Millennial Lifestyle Subsidy," New York Times).

-- New entrants competing to sell cars using different technologies or business models.  This is mostly about electric cars, and is unchanged.  EVs require a different fueling system than gasoline, which requires the buildout of a charging network ("The White House wants a robust electric vehicle charging network. Here's the plan," WGBH/NPR, "A perspective on equity in the transition to electric vehicles," MIT Science Policy Review).  And companies like Tesla prefer to sell cars directly rather than through independent dealers.  

-- Car companies versus transportation companies.  The entry focuses on something Ted Levitt wrote decades ago, about GM thinking of itself as a car company, not a transportation company.  I don't think he was right exactly, but he was on to something.  

GM saw itself as a "vehicle manufacturer" producing cars, trucks, heavy trucks, construction equipment, buses, and railroad locomotives.  That's transportation.  

What Levitt got wrong was that GM's problem was three-fold, that they didn't think of transportation as opposed to vehicles, they were stuck with a production and operations model that was increasingly unprofitable except for luxury vehicles and trucks, and they weren't sufficiently focused on the quality of the customer experience in terms of manufacturing quality, dealership to customer relations, and on technology like OnStar instead of the experience (versus Tesla).

When the price of gas changed significantly GM was stuck--their design sensibility didn't work with smaller cars, and their labor-health insurance and pension requirements made cars not particularly profitable.

Ford was similar, producing heavy trucks, tractors, airplanes for a time, with some dabbling in transit.  Like GM they got out of everything but cars and trucks, with an increasing focus on trucks, especially SUVs.   Both companies have been downsizing foreign operations, while still focused on China.

Ford created the Ford Mobility division (GM has a similar unit), its arm focused on serving customers "using cars" not necessarily owning them, along with other initiatives such as small group passenger services ("Ford’s Farley On Building Mobility Technology And Services Amid Auto Industry Disruption," Forbes). 

But these initiatives have shifted from dealing with "car customers" versus "car buyers and owners" and more towards technology initiatives like automated vehicles.  The Chariot group passenger unit was shut down in 2019.

Some of Ford Mobility's initiatives, like sponsoring for a time the SF bike sharing program, I argued were more about seeming appealing to potential and younger employees, especially in the Silicon Valley.  Ford ended  its participation in 2019.  

They still have a research unit there, but it's pretty small, about 300 employees ("A New Frontier: How Ford is Engaging Silicon Valley Startups to Transform Transportation").

More recently, Ford announced the acquisition of the long abandoned Michigan Central Station, and committed to its rehabilitation and that the Company's advanced technology initiatives would be based there as part of a new "Mobility Innovation District" ("Ford Reveals Plans for Inclusive, Vibrant, Walkable Mobility Innovation District Around Michigan Central Station").

It will have about 5,000 employees, demonstrating it tends to work better for companies to have employees and innovation units closer to the center.

New developments:

• I was wrong about Tesla, it will become a mass manufacturer.  Part of my problem was recognizing that just because Elon Musk is a blowhard and the stock is driven up by fanboys disconnected from underlying value, the company is transformational, and is redefining the car industry.
• The other thing that I didn't fully understand is that Tesla's entry as an exogenous shock (disruptive innovation), the lead promoter of electric vehicles, and the first mover especially in terms of branding has the strong possibility of boxing out the ability of GM and Ford to reposition and rebrand around electric vehicles.  Electric vehicles challenge the ways cars are designed, internal combustion engines and the billions of dollars of sunken investment, gasoline producers and sellers, existing business models, and traditional car dealerships.
• Just as Sony's Walkman lost out to smartphones, VHS to DVDs, Kodak to digital photography, Nokia to Apple, newspapers and travel agencies versus the Internet, taxi companies versus Uber and Lyft, etc., GM and Ford may be analogous to Sony, Kodak and the printed newspaper.  That's the power of exogenous shock.
• Tesla is years ahead both in terms of battery technology and IT systems and it may be too difficult for the other companies to catch up, especially as younger buyers see legacy companies as old news and not worth considering.
• GM's Chevy Bolt has been a failure ("Chevy Bolt Battery Recall: How Could This Have Happened?," Car and Driver), when I thought it would redefine the industry.  Even without the battery fire problem, most potential customers preferred to buy a Tesla over a Bolt.
• Tesla has opened a plant in China, and has one under construction in Germany.
• However Ford and GM do have an advantage in the truck segment, which may keep them in the game as trucks shift from ICE to electric.  But not for cars?
• Focusing on "car users" rather than "car owners" is likely to remain a niche market, and may require direct participation by public transportation agencies along with subsidy ("In DC and Seattle could Car2Go (ShareNow) be converted to a nonprofit and remain in business? (Or could it be sold to Zipcar?)," 2020) as part of transportation demand management planning.

• In 2019, GM and Ford announced a shift away from car production to focus on trucks and SUVs.  Foreign manufacturers like Toyota and VW in a wide range of segments, and BMW and Mercedes in luxury segments, continue to offer a wide range of cars.
• GM and Ford announced massive new programs for electric vehicle production.  
• The big hang up is battery production, and the scarcity of the unique minerals necessary for batteries ("Is There Enough Lithium to Maintain the Growth of the Lithium-Ion Battery Market?," GreenTech).
• Interestingly, rather than use existing plants, many of the vehicles will be produced in new facilities increasingly outside of Michigan and the core of the Midwest.  Is this because Michigan isn't competitive or is it a way to get cheaper labor and reduce the power of the UAW? ("Michigan Gov. Whitmer slammed after Ford opens electric vehicle plants in other states," Fox Business).
• Car sales are up, but there are also supply problems because of a microchip shortage ("Microchip Shortage Update: Car Inventories Could Stay Low All Next Year," Kelly Blue Book).  This has led to a massive increase in the price of used cars too.
• Gas prices are high as a result of supply difficulties, but mostly because of the contraction of the US shale oil industry because of a price reduction campaign by Saudi Arabia, designed to put many of the companies out of business ("With shale subdued, Saudi, Russia become more comfortable with oil rally," Reuters). 
• It's not clear the US electricity grid is robust and resilient enough to power an automobile fleet shifting in toto from internal combustion engines to EVs ("Plug in cars are the future: the grid isn't ready," Washington Post).
• And legacy dealers aren't necessarily committed to EVs, which demonstrates the importance of Tesla's decision to sell direct, starting from a fresh plate.
• Many cities in Europe have "low emissions zones" in their center cities, which means that diesel and gasoline cars can't enter, or have to pay a significant daily fee upon entrance to the zone. 
• In 2020, California banned the sales of gasoline powered vehicles effective in 2035 ("California will ban new gas cars starting in 2035. Gas station owners worry about their livelihoods," KCRW/NPR).  But too many states are dependent on fossil fuel production, car dealerships, car manufacturing, and the sprawl land use paradigm to be as bold.