Lucid Motors in Canada

[hmp10]

About 12% of Canadian car sales are EVs, compared to about 10% in the U.S. The Canadian government imposed a 25% tariff today on imports of U.S.-sourced goods along with a call for Canadians to eschew U.S. products wherever possible.

I wonder what effect the Canadian tariffs will have on the Lucid showrooms and service centers in Toronto and Montreal with China and Europe ready to fill the demand? Will Lucid even keep them open if this tariff stand-off continues?

 

[Andretex]

This will be short lived. I expect the public outroar in increased prices will force the administration to back off this terrible idea.

 

[hmp10]

This will be short lived. I expect the public outroar in increased prices will force the administration to back off this terrible idea.

I, too, think It might be short-lived. I'm wondering more about whether Canadian buyers will change their buying habits longer term and seek non-U.S. alternatives to products to protect themselves from this kind of posturing, especially on products with a service life as long as cars.

For years the UAW successfully engaged in whipsaw bargaining by which they identified only one of the Big Three automakers as the target for a strike during the coordinated contract renewal cycle. They knew that the automakers knew that, once a buyer switched brands because of the unavailability of product, many of those buyers never came back despite long-standing loyalties to the original brand.

This whole episode, even if short-lived, could have long-term effects on Canadian buying patterns just as Lucid is trying to build a brand presence in Canada.

And, oops . . . I forgot about the Lucid showroom in Vancouver.

 

[Tâm]

I, too, think It might be short-lived. .

Your belief is well proven by the recent canary in the coal mine, Colombia, where the tariff war lasted only less than 24 hours.

Tariffs hurt the poor the most but the rich can still afford pricey luxury cars even with high tariff.

 

[Tâm]

By the way, Trump already practiced tariffs on Canadian aluminum and steel in his first term. Canada retaliated by focusing on Trump’s voters such as: Florida orange juice, Tennessee (Republican Senate Leader Mitch McConnell's home) and Kentucky whiskey and bourbon…

That tariff war lasted 1 year and Canadians could drink reasonably priced US booze without tariff again!

This time, Canada can repeat the strategy again and can use energy as a bargaining chip.

Trump has been boasting low gasoline prices but Canada can fix that by raising the price for the US.

North Eastern US states rely on Canadian electricity. Western and Midwestern US depends on British Columbia and Manitoba electricity.

 

[tonybot]

It sounds like the EU is next on the list, and rumors on the street are that Japan and South Korea are lined up after that. It feels like we are gearing up for a trade war with the rest of the world, and no sector will be spared. I don’t think Trump will relent. He campaigned on this, and he believes that he has a mandate. I think Lucid and the broader market are in for a rollercoaster ride for a while now.

I see some projections that supply chain issues will cause major auto factories to shut down. Do we know Lucid dependencies on Mexico and Canada? What about EU? Also, can Lucid circumvent tariffs by shipping cars assembled in SA?

 

[hmp10]

It sounds like the EU is next on the list, and rumors on the street are that Japan and South Korea are lined up after that. It feels like we are gearing up for a trade war with the rest of the world, and no sector will be spared. I don’t think Trump will relent. He campaigned on this, and he believes that he has a mandate. I think Lucid and the broader market are in for a rollercoaster ride for a while now.

I see some projections that supply chain issues will cause major auto factories to shut down. Do we know Lucid dependencies on Mexico and Canada? What about EU? Also, can Lucid circumvent tariffs by shipping cars assembled in SA?

There has always been a strong undercurrent of isolationism and xenophobia in American politics, and it is currently going through one of its periodic upsurges. With the preponderance of mega wealthy operators -- many with robust global operations -- currently in ascendancy in Washington, it's going to be interesting to see whether the populist forces or the commercial interests will come to dominate the trade issue.

Lucid stays quiet about the sourcing of some of its components, but I'm sure tariffs will play some role, especially if they come to encompass the EU. Two summers ago we were visiting my university alma mater in our Air, and a German family walked up to us to ask about it as we were getting out of the car. The woman was especially excited to see one, as she said a good friend of hers worked in the German factory that made the seats for the Air. She wanted to take pictures of the car to send her.

Even if the new tariffs don't last long, there will be some foreign companies currently sourcing from the U.S. that will seek out alternate suppliers to hedge against the uncertainty of U.S. trade policy going forward. Those moves, once taken, often hold. There is also the factor of Musk's high-profile involvement in the new administration and the waves of anger he's creating in the EU on many fronts. The general rise in anti-U.S. sentiment across the globe on trade, environment, and foreign policy will play an as-yet undetermined role. As I've mentioned before, we watch a lot of German and Polish news in our household, and the U.S. look ain't too pretty right now in most of Europe.

 

[Rogue]

I, too, think It might be short-lived. I'm wondering more about whether Canadian buyers will change their buying habits longer term and seek non-U.S. alternatives to products to protect themselves from this kind of posturing, especially on products with a service life as long as cars.

For years the UAW successfully engaged in whipsaw bargaining by which they identified only one of the Big Three automakers as the target for a strike during the coordinated contract renewal cycle. They knew that the automakers knew that, once a buyer switched brands because of the unavailability of product, many of those buyers never came back despite long-standing loyalties to the original brand.

This whole episode, even if short-lived, could have long-term effects on Canadian buying patterns just as Lucid is trying to build a brand presence in Canada.

And, oops . . . I forgot about the Lucid showroom in Vancouver.

You can look at the US market as an example. Sit in a Porsche or Mercedes optioned similarly to the Lucid and compare the price. One of the first things I noticed with Porsche is that you are paying a premium for the same features.

At one job, there was an ongoing pissing contest between the middle aged men. They all had some kind of BMW. There were constant comparisons between their trims, talks of sacrificing options and features just to have the performance package, talks of penny pinching on rubber by swapping out OEMs for other small tires, staying with the latest model year, how a .1-.2 seconds off the line didn't "really matter", etc. Mind you we weren't talking about M4s but rather the entry to mid level variants...

People will continue to buy brands they are loyal to regardless of tarrifs. They will accept less features at the same price points previously paid and what they could or could not afford the last time.

 

[hmp10]

People will continue to buy brands they are loyal to regardless of tarrifs. They will accept less features at the same price points previously paid and what they could or could not afford the last time.

This might apply to the upper economic tiers of buyers but not to buyers as you move toward the mass market.

I have never seen any economic studies or data that indicate brand loyalty on most consumer products is so inelastic that it always trumps price.

Look, for example, at the sales spike Lucid saw once the Pure came on the market -- something attributed largely to its lower price. Do you really think that all of those buyers of the Pure would or could replace it with another Lucid with a 25% tariff added to the price?

Or look at how quickly the entry of cheaper Korean cars into the U.S. market pulled buyers away from the brands they had been driving . . . and the Japanese cars before that, including even the early Lexus's that pulled some buyers away from older premium brands based on lower pricing.

 

[Rogue]

Lucid won't ever be a Honda, Toyota, Hyundai, etc.

We will have to wait for the mid size vehicles to hit the $40-60k range. That's where those individuals sit that I referred to earlier (middle aged men and nearing retirement men), not the $70-100k range. Bankers and software engineers exhibit the same behavior in those higher brackets from my experience.

If Lucid continues to cultivate this marketing of the best car ever, then the image gets stamped with the same level of vigor as the GT40 that made Ford what it is today. Performance, driving dynamics, and luxury in a modified Americana image that appeals to the modern buyer. If Lucid can nail a "more refined" image of the Americana akin to the sleekness of the European image versus the brashness of the Camaro or Mustang (nowadays), there should be no issues.

Men in the career fields I have been exposed to (engineers, banking, analysts, doctors) have a need to posture in the primal ritual of the hierarchial dominance over their peers through cars, boats, and houses. The pricing range can be 40-60k or 70-100k or 100k+ depending on the career field, and they care less about the price and more about the image (even if reality means a lesser product). So I see the GT folks shifting to the Touring, the Touring to the Pure, and the Pure to secondhand vehicles for the Air, Gravity, and mid-size variants.

Other people may have different experiences. I walk through fields of work filled with egotistical maniacs...

 

[hmp10]

Trump has been boasting low gasoline prices but Canada can fix that by raising the price for the US.

North Eastern US states rely on Canadian electricity. Western and Midwestern US depends on British Columbia and Manitoba electricity.

The tariff on Canadian energy products was set at 10% instead of the 25% on other products in an apparent attempt to lessen the impact on energy costs in the U.S. It will be interesting to see whether Canada will counter that by raising its energy prices to increase the impact of the tariffs on U.S. energy consumers.

 

[hmp10]

Other people may have different experiences. I walk through fields of work filled with egotistical maniacs...

Then you have been unfortunate in your work associates. I was a Senior Managing Director of a large hedge fund. We had many people with seven-figure annual compensation packages, some with eight-figures packages, and a few with nine-figure packages. Except for the private section where our founder kept his fleet of Ferraris, our parking garage didn't look a whole lot different from other parking garages.

In fact, one of my good friends there (who became the Chief Investment Officer and is now a billionaire) used to talk to me about how to raise his kids without giving them an overweening sense of wealth or privilege. He and his wife didn't employ a full-time maid or any other private staff. He didn't have a plane or even a NetJet card, and he and his family flew commercial on all personal travel. His kids went to public school. When I retired he was driving a five-year old BMW M5. We talked a lot about cars. He loved them but didn't want his two boys to see him driving anything exotic. Shortly after I left, he emailed me to say he wanted a new car and asked if I had any ideas. I suggested a Panamera Turbo S, but he felt that was more than he wanted his boys to see him in.

And there were a lot more people there more in that mold than the mold you describe. In fact, when I got an early-production Audi R8 in 2007, other than one Aston Martin Vantage, it was the flashiest thing in the garage other than the boss's locked up cars. I was actually a little embarrassed when people started dropping by the office to ask me about it.

 

[Lucken]

Tariffs have been imposed by Republican & Democratic presidents throughout history. Trump is a shrewd negotiator and, like has been done in the past, tariffs are merely a tool in an administration’s toolkit. Biden (or whoever was acting President during his administration), never rescinded Trump’s first term China tariffs and even added additional ones. However I’m always amused at how the degree of outrage is predicated on one’s political leanings. Politics as usual. Yawn.

Tariffs, IMO, will have little to no impact on Lucid sales…assuming that parts are even originating from tariff impacted countries. Nor do I believe that these tariffs, when rescinded, will have lasting impact on buying habits. The quality of the product will be the major selling point, especially when the playing field is even. Been there done that.

 

[thecodingart]

This will be short lived. I expect the public outroar in increased prices will force the administration to back off this terrible idea.

This is assuming the public outroar wasn’t the goal.

There’s a lot to be said about how certain historical figures went about triggering events in society.

It’s a debate on how advanced the mindset is behind these childish fronts.

Thankfully I’m pretty confident it’s not advanced and these people are — well — just on ego trips. As to why we enable that is a much bigger question, let alone suffer this game.

 

[tonybot]

Tariffs have been imposed by Republican & Democratic presidents throughout history. Trump is a shrewd negotiator and, like has been done in the past, tariffs are merely a tool in an administration’s toolkit. Biden (or whoever was acting President during his administration), never rescinded Trump’s first term China tariffs and even added additional ones. However I’m always amused at how the degree of outrage is predicated on one’s political leanings. Politics as usual. Yawn.

If you imply concerns around tariffs are politically driven universally, I think you are mistaken. Last week I was at a private event with Pres. Bush and he was very concerned about tariffs and drew parallels to tariffs played a major role in the Great Depression. The Republican Party I knew from the past would have never supported tariffs. Also, attached is the tweet from senator Rand Paul from last night.

 

[Lucken]

No, I’m not implying that the driving force behind tariffs are politically driven, rather the reaction to them often are. As I said, the Biden administration used both Trump’s tariffs and their own. I don’t think anyone would suggest these two administrations had similar politics.

As far as reaction to the tariffs are concerned, although both Trump & Bush are Republicans, the similarity pretty much ends there IMO.

 

[Gangreene]

Tariffs used indiscriminately, sledgehammer vs a scalpel, make little sense.

You cannot convince a child in the middle of a tantrum of the ILLOGICAL path they have chosen, nor do they care who else is impacted! Do NOT under estimate the resolve of the child!

 

[Andretex]

This is turning political. I rather not make my comments about politics but I will say as a great country our choice of presidents is nothing but disappointing.

Last Trump administration, the tariffs stopped china from buying certain agriculture products in Georgia. Since then, demand has never come back. A thriving farm has not been profitable since. Many dollars received from the government since then to just stay afloat.

Tariffs should be used strategically and narrowly. Not broadly. The tariffs on china that the last trump administration started and Biden continued only cost us Americans more and helped drive inflation. The trade balance with China was at a peak with Trumps first administration then continued as high through Bidens. What did it accomplish? Nothing but higher prices for us.

Anyway, tariffs are like sales tax and regressive. So most of us that can afford Lucids will pay less in tariffs as our % of income. While the poor and middle class will take the brunt of it.

I fully expect these policies to be the driving force for the next round of political push. The poor and middle class will be hurt, the rich will get richer, and then in future years, a new populist politician will win the White House. Next time it will be a Bernie sanders like populist. I have seen this cycle before in other countries.

Our balanced approach that gave way to a strong middle class and the best economy in the world is over.

My last comment is this. Trump is not a policy hawk. He is a bully. He is not able to talk intelligently about any topic. His decisions are focused to benefit himself and to sway his voters. He could care less about the middle class and the poor.

I will be fine. But I am concerned about our future.

 

[Lucken]

The middle class and poor benefited more under the first Trump administration than they did under many previous administrations. That, in part, was responsible for his win this time around along with the runaway inflation that set in impacting that same poor & middle class. Of course Biden’s mishandling of so many things was certainly a factor (and again, whoever was President…and if you believe it was Biden, I’ve got a bridge I can sell you). We were closer to peace in the Middle East with the Abraham accord before the last administration botched that too. I could go on and on and on.

That’s the last comment I’ll make here in the interest of diplomacy.

 

[hmp10]

Elon Musk has just been given full access to the Social Security and Medicare databases and payment systems. It's all about efficiency, you know. Plus he's a genius. So I'm sure we're all okay with this.