I don't think people realize what a shock wave is coming for the auto industry.<p>1. High interest rates make cars a lot more expensive, suppressing demand.<p>2. The inventories on dealership lots have been rebuilt over the last 6 months, hiding a drop in consumer demand.<p>3. EV's take much less labor to manufacture than combustion engines. Take a look at the regularity of an EV compared to a combustion vehicle. That regularity makes robotic assembly more feasible.<p>4. We're hitting the first knee on the "S" curve for EV adoption. We're moving from the slow "early adopter" phase to the "mass market acceptance" phase.<p>5. The transition is creating a large group of hesitant buyers. Many people are unsure what their next vehicle purchase should be, so they delay the decision. They keep maintaining their current vehicle, purchase a used car as a stop gap, or keep relying on their current alternative -- bus, Uber, mooching rides off friends, whatever.<p>In other words, demand for combustion engines will drop faster than demand for EV's will rise.<p>6. The other points mean that manufacturing capacity is higher than demand, which means lower prices. Which means shrinking of already low profit margins, perhaps even into the negative.<p>7. And EV's won't be a panacea. Their price is dropping too. Tesla will be blamed for leading the price drops, but it's really the Chinese leading that charge. BYD has an €8200 vehicle coming soon. It's not a golf cart, it meets full Euro safety specs. BYD has a stable of European brands (Volvo, Polestar, MG and Lotus) that it can and will use to sell Chinese cars at Chinese prices without the Chinese stigma. (cf MG4).<p>8. Look up the "Altman Z score", and then take a look at this: <a href="https://cleantechnica.com/files/2023/03/Graph-Tony.png" rel="nofollow">https://cleantechnica.com/files/2023/03/Graph-Tony.png</a> A score below 3 predicts upcoming bankruptcy. People complain that Tesla is over-priced, but IMO it's that the others are underpriced -- their price includes a significant bankruptcy risk. Not all of them will go bankrupt: once the survivors lose the bankruptcy risk discount, their value should go up.<p>9. The usual risks of large companies riding a significant technology change, coupled with significant supply chain challenges.<p>10. HN is highly skeptical about autonomous driving, but if it does happen it will have a significant unpredictable change on the market.<p>11. The uncertainty of the Inflation Reduction Act. Manufacturers are betting heavily on the subsidies in the IRA, but the chances of a rug pull in 2024 are high. OTOH, those not betting on the subsidies will lose heavily if the rug isn't pulled.<p>12. 80% of Lithium refining is done in China, and the odds of a trade war with China seem high.<p>13. Many legacy manufacturers make a surprising proportion of their volume and profit selling into China. That seems highly vulnerable.<p>I'm sure I'm wrong about some of those points, but even just a few could be devastating.