You've seen it everywhere. It seems like everyone thinks that EV's will be taking over the automotive market by storm, that EV's will outsell gas cars. But it won't. Here's why.
Consumers and car manufacturers are using Tesla as a benchmark, but it's the wrong benchmark as a forecast of the overall EV market environment. Tesla is very atypical. The reason for the attraction to Tesla are many but it's not because they're electric. People are driven by the performance, the hype, the pride, the technology, the company and what it stands for. It's fun to talk about with their games on the dashboard and useful features alongside things like fart noises for your passenger. I like it too.
Although the people attracted to Tesla may represent in some way the overall masses of EV buyers, the people who actually end up putting money down and driving them are far from that. Tesla is the one car that's made more people stretch their budget than any other car. Plenty of people are buying them with no intention of charging at home. Some don't have a home to charge at and some don't want to fork over the money for an EVSE.
The population that will dictate the direction of the EV environment currently aren't educated enough about the system as a whole. Car manufacturers don't want to spend their dollars on education unless it translates directly to sales for their own brand. The lack of education is what is holding back EV sales. Here's what I mean.
MYTHS AND MISUNDERSTANDINGS
CONSUMERS WILLING TO PAY MORE DOLLARS FOR MORE RANGE: Range vs Price
False. A vast majority of people strongly considering an EV or who have even bought one already think they need more range than they really do. California has one of the highest averages in daily commutes and even that tops off under 40 miles. As the technology stands now, you still need way more than 2x the battery to get 2x the range.
They want more miles than they can or want to pay for. I follow the used i3 market fairly extensively. Last year a mid range 94ah i3 with 115 miles was selling for an average of $7k more than the low range 60ah ones getting 72 miles. Are people really willing to pay $7k for 43 more miles? No, yet consumers are demanding 400 miles with 200-300 mile range cars already in the market. If drivers aren't using a majority of their battery daily, they're paying in performance and price to carry around a bunch of dead weight.
An empty battery doesn't way any less than a full battery. There's a point where efficiency drops exponentially as the capacity gets higher. The car needs the additional battery just to propel the weight of itself (the additional battery) before it can use the battery to actually propel the car.
The main point is that consumers think they want more range but aren't willing to pay for it. It won't be until they actually understand their range needs, how they'll actually charge their car that they can determine how many dollars to put down to achieve that relative to the opportunity cost of a gas vehicle.
SALES ARE SKYROCKETING OUTSIDE THE USA AND IT'S JUST A MATTER OF TIME BEFORE THE USA CATCHES UP.
False. The reasons why other countries are outselling EV's in big numbers is due to the government incentives that are above and beyond what's being offered in the US.
1. Incentives are better outside the US. In fact the US is starting to implement the opposite. Higher registration fees for EV's, etc.
2. Also the price of EV's are more affordable relative to income levels. Why?
3. Population density. Populations are a lot more dense outside the US. It demands smaller cars, therefore smaller batteries which come at a lower cost and therefore more affordable and more easily absorbed by the masses. That's far from the case in the US. We don't have high density population. San Francisco and Los Angeles are nothing compared to how people live overseas. NY may be the closest comparison and I still argue that people choose to live there. The dense populations in other countries aren't necessarily where people "choose" to live but we can argue that in another thread. That's a big topic. It also wouldn't be fair to say that 3 cities in all of the US represent the US as a whole.
WE NEED CHARGING STATIONS EVERYWHERE
False. Some consumers refuse to consider an EV b/c they don't think the infrastructure is there. They're right. And with Tesla owners in the picture using up public charging stations on their 220mi plus cars, it leaves even fewer stations available for those that really need it.
The US uses EV's a lot differently than the rest of the world and that has to do with population density. Maybe I'm wrong but I'd argue that the US has more homeowners than any other country. The more dense populations tend to be inhabited by renters or even condo owners (or 99 year leases like Hong Kong) and there isn't really a garage that owners can install their very own EVSE to use exclusively. Because of this reason, EV adoption requires public charging. That's not the case in the US.
The US can much more easily adopt EV's by utilizing home charging. As long as people are forking down $5k-7k for fully autonomous capabilities in their Teslas that isn't available yet rather than putting less than half that into a home charger, the priorities clearly aren't set straight and for that reason, the availability of public charging will continue to be more competitive.
No one has admitted it yet, but public charging stations aren't economically beneficial. The companies providing the stations are selling to developers that there will be more traffic because of the availability of charging stations and that traffic will translate into sales for stores which in turn translate to more value in the property. That's not true yet, but property owners are banking on it still.
Even if every public charging station was used something tells me that the areas that they're being built aren't really getting their money back in increased sales. Especially if the location is open 24 hours but the stores aren't. EV's are sucking up juice and they're not paying customers to the stores b/c the store is closed more than half the day.
PUBLIC CHARGING STATIONS COST AS MUCH AS GAS FOR A 35MPG CAR
True. Some people think public charging is free. Some think it's discounted. Both may be true as temporary incentives or a perk from a newly purchased or leased EV, but those that are paying $0.20-30/minute will tell you it's not cheaper than gas.
Not everyone understands the whole charging pricing structure. EV's charge more quickly the more empty it is. So you get more bang for your buck if it's closer to empty. This is in direct conflict with the situation of people wanting high range EV's. With high range EV's, you'd be trickle charging at public stations and paying top dollar. Unless you're one of those people that drive a Tesla for 5 days and then spend the other 2 days looking around for public charging for the next week.
PEOPLE WANT EV'S BECAUSE IT'S COOL
True. If they tell you they want an EV b/c it saves the environment, they're either wrong, lying to you or in the very very small minority. We won't walk about the carbon footprint of making batteries or what happens when they're dumped, but that's something to consider. Most current buyers get EV's for either performance or the steep discount off the car itself. I'm sure many of you/us love the low future maintenance as well but that's secondary.
NEW EV SALES VS USED EV SALES
That's a big one and it says a lot. What incentivises used EV car buyers to put money down is very different than a buyer of a new EV. The person who puts $22k into an almost fully loaded 2017 94ah i3 REX in the color of their choice may not otherwise be buying an EV at all if it was $40-50k. It would be interesting to track the sales figures for new EV's under $40k vs used ones. Used EV's have an advantage b/c buyers are taking the discount that was also offered to the original buyer which makes the overall cost of a used EV substantially lower particularly if bought from an early adopter who would've had a low range EV.
New EV sales are still in the gutter.
DEALERS DON'T REALLY BELIEVE THAT EV'S WILL BE THE FUTURE
True. Despite manufacturers putting heavy dollars on the future of EV's, dealers don't feel the same way. Do manufacturers or dealers have a stronger ability to influence a potential buyer? Not sure, but I know dealers aren't pushing hard on EV sales and few understand them as a whole. Not sure why dealers don't have sales people who are specialists in each sector. All too often even outside the whole EV discussion, the vast majority of dealers know a lot less about the vehicles they sell than the consumers who buy them. We don't go to dealers to get educated. We go there to pick up the car. Maybe b/c we don't demand it, they don't supply it.
CONCLUSION
Those that recognize the EV environment are lucky enough to take advantage of this rare time. Used EV's at huge discounts and ability to go in the HOV (high occupancy vehicle lane) has been a life changer for me. I don't see the overall public initiating their own education and I don't see anyone else pushing it either.
So until consumers take on the responsibility of trying to understand what driving an EV really means and how they fit into the scheme of the current environment, we can expect that people will continue to demanding 300-400 mi range cars for no more than $35k and will only buy it if they can charge their cars for free in under 10 minutes.
For now, car manufacturers are buying into that dream and will take the hit in loss of dollars to continue their research and development to provide cars people don't need at prices people can't afford. At some point, most likely before the public actually realizes reasonable expectations, car manufacturers will bite the bullet, ditch their effort and take the reins to be the ones to dictate what consumers should have b/c they're clearly not comfortable figuring it out themselves. A couple manufacturers will do that, others will stay on track but eventually follow suite.
It's only when manufacturers start building what people need rather than what people want will consumers and manufacturers come together to exchange what we wanted all along - dollars for cars.
Consumers and car manufacturers are using Tesla as a benchmark, but it's the wrong benchmark as a forecast of the overall EV market environment. Tesla is very atypical. The reason for the attraction to Tesla are many but it's not because they're electric. People are driven by the performance, the hype, the pride, the technology, the company and what it stands for. It's fun to talk about with their games on the dashboard and useful features alongside things like fart noises for your passenger. I like it too.
Although the people attracted to Tesla may represent in some way the overall masses of EV buyers, the people who actually end up putting money down and driving them are far from that. Tesla is the one car that's made more people stretch their budget than any other car. Plenty of people are buying them with no intention of charging at home. Some don't have a home to charge at and some don't want to fork over the money for an EVSE.
The population that will dictate the direction of the EV environment currently aren't educated enough about the system as a whole. Car manufacturers don't want to spend their dollars on education unless it translates directly to sales for their own brand. The lack of education is what is holding back EV sales. Here's what I mean.
MYTHS AND MISUNDERSTANDINGS
CONSUMERS WILLING TO PAY MORE DOLLARS FOR MORE RANGE: Range vs Price
False. A vast majority of people strongly considering an EV or who have even bought one already think they need more range than they really do. California has one of the highest averages in daily commutes and even that tops off under 40 miles. As the technology stands now, you still need way more than 2x the battery to get 2x the range.
They want more miles than they can or want to pay for. I follow the used i3 market fairly extensively. Last year a mid range 94ah i3 with 115 miles was selling for an average of $7k more than the low range 60ah ones getting 72 miles. Are people really willing to pay $7k for 43 more miles? No, yet consumers are demanding 400 miles with 200-300 mile range cars already in the market. If drivers aren't using a majority of their battery daily, they're paying in performance and price to carry around a bunch of dead weight.
An empty battery doesn't way any less than a full battery. There's a point where efficiency drops exponentially as the capacity gets higher. The car needs the additional battery just to propel the weight of itself (the additional battery) before it can use the battery to actually propel the car.
The main point is that consumers think they want more range but aren't willing to pay for it. It won't be until they actually understand their range needs, how they'll actually charge their car that they can determine how many dollars to put down to achieve that relative to the opportunity cost of a gas vehicle.
SALES ARE SKYROCKETING OUTSIDE THE USA AND IT'S JUST A MATTER OF TIME BEFORE THE USA CATCHES UP.
False. The reasons why other countries are outselling EV's in big numbers is due to the government incentives that are above and beyond what's being offered in the US.
1. Incentives are better outside the US. In fact the US is starting to implement the opposite. Higher registration fees for EV's, etc.
2. Also the price of EV's are more affordable relative to income levels. Why?
3. Population density. Populations are a lot more dense outside the US. It demands smaller cars, therefore smaller batteries which come at a lower cost and therefore more affordable and more easily absorbed by the masses. That's far from the case in the US. We don't have high density population. San Francisco and Los Angeles are nothing compared to how people live overseas. NY may be the closest comparison and I still argue that people choose to live there. The dense populations in other countries aren't necessarily where people "choose" to live but we can argue that in another thread. That's a big topic. It also wouldn't be fair to say that 3 cities in all of the US represent the US as a whole.
WE NEED CHARGING STATIONS EVERYWHERE
False. Some consumers refuse to consider an EV b/c they don't think the infrastructure is there. They're right. And with Tesla owners in the picture using up public charging stations on their 220mi plus cars, it leaves even fewer stations available for those that really need it.
The US uses EV's a lot differently than the rest of the world and that has to do with population density. Maybe I'm wrong but I'd argue that the US has more homeowners than any other country. The more dense populations tend to be inhabited by renters or even condo owners (or 99 year leases like Hong Kong) and there isn't really a garage that owners can install their very own EVSE to use exclusively. Because of this reason, EV adoption requires public charging. That's not the case in the US.
The US can much more easily adopt EV's by utilizing home charging. As long as people are forking down $5k-7k for fully autonomous capabilities in their Teslas that isn't available yet rather than putting less than half that into a home charger, the priorities clearly aren't set straight and for that reason, the availability of public charging will continue to be more competitive.
No one has admitted it yet, but public charging stations aren't economically beneficial. The companies providing the stations are selling to developers that there will be more traffic because of the availability of charging stations and that traffic will translate into sales for stores which in turn translate to more value in the property. That's not true yet, but property owners are banking on it still.
Even if every public charging station was used something tells me that the areas that they're being built aren't really getting their money back in increased sales. Especially if the location is open 24 hours but the stores aren't. EV's are sucking up juice and they're not paying customers to the stores b/c the store is closed more than half the day.
PUBLIC CHARGING STATIONS COST AS MUCH AS GAS FOR A 35MPG CAR
True. Some people think public charging is free. Some think it's discounted. Both may be true as temporary incentives or a perk from a newly purchased or leased EV, but those that are paying $0.20-30/minute will tell you it's not cheaper than gas.
Not everyone understands the whole charging pricing structure. EV's charge more quickly the more empty it is. So you get more bang for your buck if it's closer to empty. This is in direct conflict with the situation of people wanting high range EV's. With high range EV's, you'd be trickle charging at public stations and paying top dollar. Unless you're one of those people that drive a Tesla for 5 days and then spend the other 2 days looking around for public charging for the next week.
PEOPLE WANT EV'S BECAUSE IT'S COOL
True. If they tell you they want an EV b/c it saves the environment, they're either wrong, lying to you or in the very very small minority. We won't walk about the carbon footprint of making batteries or what happens when they're dumped, but that's something to consider. Most current buyers get EV's for either performance or the steep discount off the car itself. I'm sure many of you/us love the low future maintenance as well but that's secondary.
NEW EV SALES VS USED EV SALES
That's a big one and it says a lot. What incentivises used EV car buyers to put money down is very different than a buyer of a new EV. The person who puts $22k into an almost fully loaded 2017 94ah i3 REX in the color of their choice may not otherwise be buying an EV at all if it was $40-50k. It would be interesting to track the sales figures for new EV's under $40k vs used ones. Used EV's have an advantage b/c buyers are taking the discount that was also offered to the original buyer which makes the overall cost of a used EV substantially lower particularly if bought from an early adopter who would've had a low range EV.
New EV sales are still in the gutter.
DEALERS DON'T REALLY BELIEVE THAT EV'S WILL BE THE FUTURE
True. Despite manufacturers putting heavy dollars on the future of EV's, dealers don't feel the same way. Do manufacturers or dealers have a stronger ability to influence a potential buyer? Not sure, but I know dealers aren't pushing hard on EV sales and few understand them as a whole. Not sure why dealers don't have sales people who are specialists in each sector. All too often even outside the whole EV discussion, the vast majority of dealers know a lot less about the vehicles they sell than the consumers who buy them. We don't go to dealers to get educated. We go there to pick up the car. Maybe b/c we don't demand it, they don't supply it.
CONCLUSION
Those that recognize the EV environment are lucky enough to take advantage of this rare time. Used EV's at huge discounts and ability to go in the HOV (high occupancy vehicle lane) has been a life changer for me. I don't see the overall public initiating their own education and I don't see anyone else pushing it either.
So until consumers take on the responsibility of trying to understand what driving an EV really means and how they fit into the scheme of the current environment, we can expect that people will continue to demanding 300-400 mi range cars for no more than $35k and will only buy it if they can charge their cars for free in under 10 minutes.
For now, car manufacturers are buying into that dream and will take the hit in loss of dollars to continue their research and development to provide cars people don't need at prices people can't afford. At some point, most likely before the public actually realizes reasonable expectations, car manufacturers will bite the bullet, ditch their effort and take the reins to be the ones to dictate what consumers should have b/c they're clearly not comfortable figuring it out themselves. A couple manufacturers will do that, others will stay on track but eventually follow suite.
It's only when manufacturers start building what people need rather than what people want will consumers and manufacturers come together to exchange what we wanted all along - dollars for cars.
