Article: Why Slate's CEO Isn't Too Worried About Cheap Chinese EVs

[AKrietzer]

Some of the prices I have seen on these tiny trucks are as high as Slate is expected to be. It seems like the fleet sales of Slate will go over very well and be a large part of their business.

 

[bloo]

I saw one for sale for $7200 OBO a few miles from me with about 56,000 miles. It didn't have plates or a title, so it would be difficult to register in my state. It sat for a month before someone bought it.

 

[AKrietzer]

I saw one for sale for $7200 OBO a few miles from me with about 56,000 miles. It didn't have plates or a title, so it would be difficult to register in my state. It sat for a month before someone bought it.

I was talking about new vehicles, but what good is a vehicle without a title, and you can't license for road use? I know of two tiny vehicles but they never leave their property. I don’t see them as comparable to the Slate.

 

[smack daddy]

Chinese vehicles (be it gas, EV, or EREV) should NOT be allowed in the US. Period. For a variety of reasons (political, economic, strategic, etc.). Just say NO.

YMMV

At the right price I would say yes

 

[ScooterAsheville]

I love the patriotic sentiment about locking the Chinese automakers out of the USA. But I suppose those guys are cool with the Chinese locking American OEMs out of the Chinese market, which BTW is literally 2X the size of the American market and has generated vast profits for non-Chinese OEMs over the last decade (now declining as we fail to compete).

Sheer American Patriotic Brilliance! Go Team! While we're at it, let's unionize more plants so we can become even less competitive!

 

[Letas]

People want 2-door trucks and SUVs, but they've been held out of reach by the government and the industry.

I'm as big of an opponent of the chicken tax as any. It's far overdue that it be rolled back, but that's neither here nor there.



That being said, it's silly to blame it for the reason we don't have small trucks in America. Chicken tax was enacted in the 60s. We had small trucks (comparable in size to the Slate!) in the 90s. We have the ability to produce cars in America, and we do produce cars in America! If demand was so high- why would one of the legacy MFGs not retool their American plant and produce the truck "everyone wants".



The fact of the matter is, demand drives sales, and sales declined.

This isn't my opinion, its fact.

Evidenced by years of sales data. This is all public info.
This is the sales chart for the S10.

 

[AZFox]

That being said, it's silly to blame it for the reason we don't have small trucks in America.

Partially to blame.

One example is in the post you pulled my quote from. 2-door SUVs were re-designated as light trucks and became subject to the Chicken Tax.

Fewer SUVs imported
-> Fewer SUVs Available
--> Fewer SUVs Sold, but not because of demand

It's called protectionist legislation.

What protectionist legislation protects isn't the consumer, it's the industry. They hire lobbyists so they can work less hard and still make money.

If the Japanese make a superior 2-door SUV, get the government to tax it. That's much easier to do that than it is to develop a superior SUV.

The fact of the matter is, demand drives sales, and sales declined.

This isn't my opinion, its fact.

For whatever reasons the industry and government don't want to make 2-door pickups available. A lot has been written about why cars are diverging away from what people want. The important take-away is YOU CAN'T BUY WHAT ISN'T OFFERED FOR SALE.

Need an example? I have a perfect one.

SlateForums.com is a site that's all about discussing a Small Pickup Truck. There are currently 1,813 members as I write this. Do you know how many of those people bought a Small Pickup Truck last year?

Zero!

A graph of how many people bought Small Pickup Trucks in recent years would just be a flat line at zero, but that doesn't mean there isn't demand for Small Pickup Trucks. It means there isn't supply.

Here's a clip from the opening sentence in Wikipedia's entry for Slate Auto

Slate Auto is an American startup company that is developing electric vehicles. It was founded in 2022 inside of Re:Build Manufacturing by Miles Arnone, William Barker and Jeff Wilke [...]​

These people saw the unmet demand and missing supply and acted on it. Good on 'em!

 

[Mr. Slate]

Sometimes (always) it's profits that drive what companies produce, and not consumer damand. It seems to me that CAFE standards have created a perverse incentive for auto companies to produce larger SUVs and pickup trucks.

here is an article that explains this issue: https://news.umich.edu/cafe-standards-create-profit-incentive-for-larger-vehicles/

That is why I think that Slate is so interesting, we are about to test the theory that amercans only want large trucks. It is also why the chicken tax is so insidious, we can't buy imported small trucks even if they meet CAFE standards,

 

[KevinRS]

Profit is correct. Back in 2000 when I went vehicle shopping, and could get a price near the Ford employee price due to a work discount, I found out that wasn't going to do anything on a sedan. It would have saved thousands on a truck or SUV, because there was more profit in them, but the low profit on sedans meant the employee price was right about what they would offer any customer.
Guess what Ford stopped selling in the US entirely?
Sedans, and went to just trucks and SUVs.
Once they did that, the next lowest profit is the base model 2 door small trucks.
Companies even outside of automotive tend to get into this pattern now of killing their low profit lines even if those lines are what it bringing the customers into the store/dealer. Like those trucks and fleet sales, now fleets have to buy trucks that cost double, so they buy half. Auto parts stores are running the smallest cheap subcompact they can now because of cost, and don't bother with branding, who wants to put a parts store name on that.

 

[Sojourner]

But I suppose those guys are cool with the Chinese locking American OEMs out of the Chinese market....

One could look at it as reciprocation, right? As in, you open up your market, we open up ours. Right?

At the right price I would say yes

I hear you, but we have enough Chinese "spy machines" here already. I would be more inclined to say yes if they opened up their software architecture for inspection so that we would know where software was directing our vehicle's info, what backdoors were there, what antennas or other comm connections were there, etc. But of course they would say "no way" to which I say "no way" (we can't even get spine enough to demand these things from oir own manufacturers!). Given what I used to do for a living, I remain convinced that just about every Chinese appliance (be it Anker or EcoFlow (companies I have bought from and admire) or EV companies or appliances or cell phones. Etc.) has a kill (or takeover) switch embedded in the firmware. Imagine if we do come to blows.... With everything from tiny routers to large vehicles shuts down. Again, given what I used to do, my strong beloef is that we'd just be introducing/importing yet another NatSec security problem just to save a few bucks. My hope is that we re-onshore our own manufacturing which is why I will support Slate (and others who I hope would be more "trustworthy").

Bottom line, I'm willing to take a chance on some things (where I've taken measures to mitigate vulnerabilities), but not willing to take a chance on other things like vehicles (where it would be nigh on impossible to mitigate vulnerabilities).

FWIW YMMV

Cheers.

 

[AZFox]

Sometimes (always) it's profits that drive what companies produce, and not consumer damand. It seems to me that CAFE standards have created a perverse incentive for auto companies to produce larger SUVs and pickup trucks.

CAFE standards, Chicken Tax, and other factors.

It boils down Systems Thinking concept known as POSIWID: the Purpose Of a System Is What It Does, where the the true purpose of a system can be determined by its actual behavior and outcomes, rather than just its intended goals.

Consider these three aspects of the industry as a system:

• There's a lot of Bureaucracy, both in the government and in the automotive industry.
• There is Regulatory Capture, where the auto industry inmates are, to some extent, running the auto industry asylum, so to speak.
• There is Rent-Seeking Behavior where the auto manufacturers are persuing wealth by manipulating public policy to their favor, rather than the public's.

Instead of serving the public interest the system serves the interests of the industry.

As a result, and for whatever reason (profits, ultimately), the auto manufacturers have held 2-door SUVs and small pickups out of reach.

 

[SichuanHot]

My hope is that we re-onshore our own manufacturing which is why I will support Slate (and others who I hope would be more "trustworthy").

While a lovely thought, I don't think that's going to happen thanks to Slate, but it will at least get that discussion started. However, the Snowden revelations showed that hardware backdoors are also in American made software and hardware. The whole discussion about encryption on devices and the govt having access to those keys is a large privacy concern. Microsoft, Apple, Google, and other big names have shown that they're willing to give up information about its users to the feds with no concern for privacy or device encryption if something like a laptop is in possession for a legal case.

The DJI "national security" fiasco is probably one of the most recent false flags with govt claiming DJI drones are stealing data, phoning home etc etc when third party firms' (FTI Consulting) security audit showed none of those security concerns were true. I'd be more worried about the spying bloated mess that Windows operating systems have become now than backdoors in Chinese hardware and software.

 

[Letas]

Partially to blame.

One example is in the post you pulled my quote from. 2-door SUVs were re-designated as light trucks and became subject to the Chicken Tax.

Fewer SUVs imported
-> Fewer SUVs Available
--> Fewer SUVs Sold, but not because of demand

It's called protectionist legislation.

What protectionist legislation protects isn't the consumer, it's the industry. They hire lobbyists so they can work less hard and still make money.

If the Japanese make a superior 2-door SUV, get the government to tax it. That's much easier to do that than it is to develop a superior SUV.

For whatever reasons the industry and government don't want to make 2-door pickups available. A lot has been written about why cars are diverging away from what people want. The important take-away is YOU CAN'T BUY WHAT ISN'T OFFERED FOR SALE.

Need an example? I have a perfect one.

SlateForums.com is a site that's all about discussing a Small Pickup Truck. There are currently 1,813 members as I write this. Do you know how many of those people bought a Small Pickup Truck last year?

Zero!

A graph of how many people bought Small Pickup Trucks in recent years would just be a flat line at zero, but that doesn't mean there isn't demand for Small Pickup Trucks. It means there isn't supply.

Here's a clip from the opening sentence in Wikipedia's entry for Slate Auto

Slate Auto is an American startup company that is developing electric vehicles. It was founded in 2022 inside of Re:Build Manufacturing by Miles Arnone, William Barker and Jeff Wilke [...]​

These people saw the unmet demand and missing supply and acted on it. Good on 'em!

Everything you said is fundamentally true. However, in practice, it is not applicable.

The Chicken Tax applies to imports- it is a tariff. The S10 (my previous example) was produced in America. If anything, this protectionist legislation benefits the sale of the S10 (and other domestic manufactures). Yet it was still killed? Why?

Now, a key caveat to all this is perhaps demand patterns changed, or perhaps company X does not need to sell as many units as company Y of a vehicle to operate, so company X will produce it. Both of those things may very well be true in this day and age. It is difficult to say when the market, as you've stated, does not exist.

But it is ingenuine to say that the Chicken Tax is the reason we don't have any light trucks today. It is the reason we don't have some, but not all.

The last part of your statement- I think is the closest to true. It's not like legislation changed and allowed the Slate to be produced (again legislation is not the reason the markets don't exist today). Slate sees an opportunity for demand. Whether or not that demand is legitimate, we will see in a few years. First years of sales will likely be high (early adopters, new product, etc). If in 3-5 years, Slate has steady sales, then we can say the demand has reflourished.

 

[sodamo]

I think the Chicken tax emboldened the big Three to think they could build their more profitable big trucks and not their less profitable small trucks because lack of competition.

 

[AZFox]

I think the Chicken tax emboldened the big Three to think they could build their more profitable big trucks and not their less profitable small trucks because lack of competition.

This is the essence of it.

Not just the big Three.
Not just the chicken tax.
Not just small pickups.