(1) As predicted by many, consolidation of major OEMs are coming
As widely reported, Honda and Nissan have signed a memorandum of understanding to explore a merger or combination of some type. In an article appearing in the December 23rd edition of the New York Times entitled, "Honda and Nissan Aim to Merge as Global Competition Bears Down," the author describes the respective party's intent to "... discuss combining their operations under a holding company, with the goal of completing the merger in August, 2026. One of the objectives is to reduce the individual burden of the enormous investment of the research and development necessary to be competitive in the emerging EV space as well as gasoline powered vehicles by pooling their activities and resources.
A Japanese based consultant, Takaki Nakanishi, explains, "To sustain these dual investments, automakers need scale and the operational efficiencies that come with it. If Nissan and Honda are not able to achieve this, they will not survive. Times are truly that tough."
The author concludes with two pessimistic observations: (1) mergers in the automotive sector have a dubious track record; and (2) given the forces at play in China, it may be too late to effectively compete with the Chinese manufacturers.
(2) Many Frowns to Turn Upside -Down
VW is not the only European based OEM to be navigating challenging times. In an article appearing in the December 30th edition of Bloomberg Hyperdrive, the author describes the efforts of Stellantis' Chairman, John Elkann, in the wake of the departure of Carlos Tavares, the company's first and only CEO, to placate political, union and other constituencies by committing to keeping plants open throughout Europe. It seems highly questionable whether Stellantis will be able to make good on those commitments in the long run.
(3) 2024 Look Back
Now that 2024 is in the rear mirror, it's time for a look back at some of the stories that shaped the year 2024, one of the most impactful years in the transition from ICE to BEV. In an article appearing in the December 17th edition of BloombergNEF, entitled, "Robotaxis, BYD and Tariffs: 10 EV stories that Defined the Year," the author explores "...10 key trends that helped shape the EV world in 2024 - and could pave the industry's way going forward. "The article covers legacy OEMs, start-ups, Chinese companies, start-ups, Tesla and much more. A good overview of the triumphs and travails of the industry in 2024.
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