EVs are stuck in a bad place!
A reader sent me a link to a video (ugh!) about inventories of EVs. Most dealers (and manufacturers) want to see 30 days or less of inventory in the pipeline - indicating that the vehicle is popular and that production is in line with sales. But some EVs have six- to twelve-month backlogs on dealer lots. Twelve months is problematic as it spans a model year and no one wants to pay new car prices for a year-old car. At some point, you have to move the car over to the used car lot and sell it as a low-mileage used car.
What exactly is the problem? Well, it is Tesla, in part. Founders Martin Eberhard and Marc Tarpenning turned the EV business (such as it was) on its ear by creating a high-performance roadster (based on the Lotus Elise) that sold at luxury car prices. Prior to that, EVs were touted as povertymobiles, built small and light as possible and hardly known for speed or agility. The Tesla Roadster changed all that - offering supercar acceleration and handling - but at a steep price.
And it sold well. The follow-on Model-S was sold not as some econobox for the environmentally conscious, but as a luxury car at luxury car prices. Tesla sold all their production and had back-orders for years. This didn't go unnoticed by other automakers. EVs had largely failed in the marketplace as the products sold were tiny and tinny and punished their owners. They were created - if at all - to meet possible government mandates, and not because the makers thought there was a real market for them. So the mindset was build cheap, sell cheap, and bank those carbon credits. It didn't work.
Tesla showed the way - that you can sell a $100,000+ electric car and make a huge profit and sell the carbon credits to other companies. So everyone jumped in - again - but this time at the high end of the market. As a result, we are flooded with a plethora of hundred-grand EVs and not enough people to buy them.
Yes, EVs are practical today - for a certain market demographic. If you own your own home and can install a charging station, they work for you. If not, well, a charging station better be nearby your apartment or at your place of work. And you have to hope some jackass hasn't parked his monster truck, laden with Trump stickers, in front of the charging station to make some kind of stupid point. No, no, I think EVs, at the present time, are only practical if you own your own home. But be prepared to spend some money running a 220V line and installing a charging station. It ain't hard to do - for me, that is. Others, who can't change a light bulb, have to hire someone.
But even for me, I am not sure it is practical - yet. For one thing, I don't need or want a new car. I don't want to spend the money when I am retired and living on my savings. Sure, it would fit our "lifestyle" as a second car, but until our current car wears out, well, there really is no point. I suspect a lot of people are in a similar situation.
And even if I was prepared to buy, well, $100,000 for a "luxury EV" is out of the question. And the number of lower-priced options ($30,000) is very limited. Oh, sure, in theory you might be able to buy a stripped Model-3 with limited range (and have to pay for all the software upgrades - no thanks!) but the reality is, once you option it up, it costs far more than that. Meanwhile, I can buy a "loaded" economy IC car, like our Hamster for far less.
GM offers a Hummer EV which isn't selling well. Why? Well, tying the defunct Hummer brand to an eco-conscious EV is just plain stupid marketing. The kind of ball-scratching beer-drinking demographic that loved the Hummer isn't going to be seen dead in an EV. And at 9,000 lbs with battery packs, you aren't going offroad in one. Off-roading and EVs don't mix really. All that weight means they will get stuck. Use a smaller battery pack to reduce weight and you get stuck when you run out of juice. Either way, EVs aren't traversing Moab trails anytime soon. They are well-suited to the highway, not the byway.
Ford offers an EV pickup, but again, the demographic for pickup buyers is really antagonistic to EVs. While Ford has done a great job with that vehicle (and the Mache-E) no one is beating down the door to buy either. For me, as an F-150 owner, again, I don't need to replace my vehicle right now. We pretty much use our F150 to tow our camper (90% of mileage) and while formidable, even the extended-range F150 EV isn't going to go far dragging a 21-foot trailer down the road. And that's considered a small trailer, too!
Not that it can't be done, but it limits one's options. I met a Canadian man who was towing a 19-foot travel trailer (box type) with a Model-Y. Even with the dual-motor extended range or whatever, he maxed out at 150 miles or less range, before having to stop. He would either have to plan his trip so his lunch break coincided with a supercharger station, or jump from campground to campground, charging overnight. Already I am seeing signs at campgrounds forbidding EV charging. That could become an issue.
My "Ecoboost" F150 cranks out 380 horsepower or thereabouts, out of a lightweight aluminum turbocharged engine and gets over 20 mpg when solo, and a decent (for RVing) 14 mpg when towing. With the extended-range 38-gallon tank, that means the vehicle has a potential range of over 700 miles driving solo, or over 500 when towing. That's more than I ever want to drive in a day. Clearly EVs are never going to entirely replace IC engine cars, unless there is another breakthrough in battery technology that doubles energy density - at the very least.
But that is not to say there is no market for EVs in America. Roughly half (I estimate) of cars on the road are rarely driven more than 100 miles in a day, often far less. And a huge number of Americans own their own homes in the suburbs (look out the window of an airplane sometime, we are a wealthy nation!). Most people use their cars primarily to drive to work and back or go to the store. Long trips are a once-a-year thing, if that. So clearly, millions of people - over a hundred million, I suspect - could fit an EV into their lifestyle.
.If it was affordable.
Going after the high end of the market might have worked for Tesla, but that segment is saturated. And pickup trucks and huge SUVs don't seem like a natural fit for the EV market. Yet carmakers are pushing expensive EVs and not surprisingly, as the video linked above shows, those are the models lingering on dealer lots. Affordable EVs still seem to be selling fairly well. But again, these are not smart-phones. People aren't throwing away their old cars to jump on the EV bandwagon - they will wait until their old car is ready for a trade. So sales will be a trickle, not a flood.
Of course, there are exceptions. The Elon fan-boys, like Apple fan-boys, are jumping at the chance to have tha latest-and-greatest - a "Cybertruck" - and realizing after taking delivery that it is a very expensive, heavy, and large vehicle ill-suited for real truck activities. And they now realize that they signed a contract agreeing not to sell their cybertruck for a certain period of time, lest the secondary market get flooded (bad pun, sorry) with used cybertrucks.
Meanwhile, Tesla is aggressively slashing prices of its long-in-the-tooth legacy products, which is again causing regret for owners who bought last year and now see their resale prices plummet as new car prices drop. Many are upside-down on their loans as the balance due is more than the cost of a new Tesla. And what will happen when hundreds of thousands of leases end and the projected "residual" is nowhere near the actual resale value? Yea, that. Now you know why Elon is milking Tesla dry before it goes the way of Kaiser-Frazer or Studebaker.
A price war on EVs could be good business for consumers - and may, ironically, jump-start sales. When prices go low enough, some folks (even myself!) might jump in. And once you have an EV and your own charging station, you might be inclined to buy another one, down the road. Then again, EVs have the potential to last decades, if properly maintained.
I met a fellow over the holiday who thinks he had more money that he does. "I'll just work until I'm 70!" he says. Translation: I am dead broke and up to my eyeballs in debt buying things I don't really need so I can't quit my job if I wanted to. He serially leases cars - Cadillacs - every two years. The salesman called him up and offered him a "deal" on a new EV Caddy as they are not selling very well. He says he will likely take the deal - a short-term lease. I wonder if, two years from now, if he will go back to IC engines or be an EV convert.
Cadillac sells EVs, but GM's lesser brands, that used to sell EVs, no longer do - although a Chevy EV SUV is allegedly coming out this year and there is talk of bringing back the Chevy Bolt - again.
In a way, perhaps there is an historical precedence for this. GM used to introduce new technologies in its more expensive brands, before they trickled down to lesser marques. One exception was the automatic transmission, which debuted with Oldsmobile (Dynaflow notwithstanding) before it was adopted by Cadillac. The thinking was, if it turned out to be a dud, it would not tarnish the Cadillac marque. Sadly, other technologies didn't follow suit and things like the V8-6-4 gave Cadillac a black eye in later years.
More expensive cars can absorb the research and development costs of technology more easily - and pay back the investment more quickly. Higher-priced car buyers are more likely to pay extra for "features" as they are a form of status. But eventually, these features trickle down to even the most plebeian of vehicles. Hard to believe today, but air conditioning, automatic transmissions, power windows, power door locks, cruise control, power steering, and power brakes were once only options and only available on upscale brands. And often, they didn't work well, either! Today, it is hard to find even an econo-box without all of these features, standard. Back in 1938, a "fully loaded" Chevy meant you had a radio and heater. Not kidding!
So in a way, it made more sense for EVs to start at the top of the market and trickle down - as Tesla aptly demonstrated. By the time other automakers got into the game, however, the technology should have been available at lower price points. Luxury car buyers are also less interested in $7500 tax rebates on hundred-thousand-dollar cars. And "saving money on gas" doesn't even register with such folks.
It is time for EVs to move downmarket.
