February 20, 2024

Cheap EVs are a major threat to established automakers. BYD and Tesla are eating the lunch of European-based car manufactures:

The competition from China-based BYD for electric vehicles have companies at a loss of how to make cars people will buy.

In response to this outside threat of cheap cars, Europe is looking at establishing an Airbus-like automaker. A private sector focused, coordinated across countries, and state-lead investment program to build capacity for cheaper electric vehicles in Europe.

EVs are easier to make, but current models break-down more often that petrol cars, are much more expensive, and do to have a fully available infrastructure for charging. One of these annoyances might be alright for consumers, but with all three mean that consumers are only buying if these cars are cheap.

State subsidies for EVs are also being reduced as politicians see budgets stretched.

The roll-out is following the same failed path of wind and solar generation in Europe where many countries subsidized private wind generation resulting in private investors buying the cheapest inputs. That means stuff not made locally. As the market scaled-up in Europe in response, the subsidies receded resulting in a production industry left high and dry.

The same thing is happening all over the world where this model was copied. Even in Europe where the charging infrastructure is actually being built (instead of just being talked about) and consumers are used to making sacrifices on consumption in buying fair trade goods, we see a slowdown in purchases.

The EU-model solution of building a European-wide car manufacturing industry through uniting nation-level auto capital companies' production is an interesting one. However, the issue may be that they are too late in establishing the necessary independent supply chain that they will have no customers left after they retool.

Worse, it would take a significant change in the European commission's orientation to competition.

It is a big deal for industrial workers across Europe. Renault is going to produce a cheaper and smaller electric vehicle "for city drivers" to try to compete. Car manufacturers have been used to making profit from selling over-engineered cars. That's not really possible with this model.

North American car manufacturers should take heed. This wave of cheap vehicles is coming our way. Giant and expensive EV SUVs that have no charging infrastructure and feel cheap are going to lead nowhere good.

Canadian CPI continues along its horizontal path of just above 3%, not really increasing or decreasing very much.

As you can see, the change is due to fluctuations in gas prices.

Prices for gasoline fell in January 2024 (-0.9%) for the fifth consecutive month.

Food prices continue to increase above the average inflation numbers, but at a reduced pace:

• year over year in January (+3.4%) compared with December (+4.7%)

Public transit ridership is still well below pandemic levels. The low ridership and the public transit funding model based on fare revenue means that transit systems continue to be stretched for cash.

The situation is cannot continue if Canada is going to meet the needs of an increasing population and shift away from fossil fuel-driven transport systems.

The funding model must change to a fairer fare system where federal and provincial taxes fund transit systems. And, not just fund them, but expand public transit systems to outside city centres to inter-city services, public passenger rail, and connecting bus, light rail, and subways.

The needs of the population in getting around Canada are not being met by the current realities facing our funding models.