Unsold Electric Cars May Be Signaling A Death Spiral For Auto Industry – OpEd
By Ronald Stein
With new EV inventories beginning to increase on dealer lots, the auto industry has many challenges such as locating the buyers that may have serious concerns about a wide range of issues related to EVs including:
- driving range,
- vehicle reliability,
- price,
- the availability of electricity for the buildout of the charging infrastructure,
- charging time,
- the cost and lifespan of batteries and their environmental impact,
- the actual impact EVs will have on reducing carbon emissions,
- the growing statistics about uncontrollable fires of lithium batteries in EV’s,
- problems with battery recycling and end-of-life management,
- concerns that the EV free ride of usage of highways and not paying fuel taxes is about to end with the Vehicle Mileage Tax (VMT), i.e., more costs for the EV owners of the future,
- concerns that home chargers are destined to follow the UK and be on separate meters so that EV charging will be at higher rates to help stabilize the electrical grid, again more costs for the EV owners of the future.
Another problem for the automobile industry is convincing the buyers that its ethical, moral, and socially responsible to buy an EV, especially since most of the exotic mineral and metal supplies to build the batteries are being mined in developing countries with limited environmental regulation nor labor regulations.
Interestingly, the 2021 Pulitzer Prize nominated book “Clean Energy Exploitations – Helping Citizens Understand the Environmental and Humanity Abuses That Support Clean Energy does an excellent job of discussing the lack of transparency to the world of the green movement’s impact upon humanity exploitations in the developing countries that are mining for the exotic minerals and metals required to create the batteries needed to store “green electricity”. Complimentary to the book is a 2-minute clip from Michael Moore’s 2020 documentary film, Planet of the Humans, that’s been viewed by more than 14 million, that illustrates how so-called green electricity is made.
As the future is fast approaching, virtually all the automobile manufacturers, through government mandates to reduce the emissions of their fleet of vehicles, are going all-in to only manufacture EV’s in the coming years. To meet low emissions for their fleet of vehicles, we’re most likely going to see fewer and fewer hybrids as the auto industry manufacturers need to eliminate the gasoline engines in hybrids to meet those lower emission targets.
The problem is that manufacturers are loading up the “supply chain” with EV’s on dealer lots, but they’re not seeing the “demand” for EV’s coming from the public. The current EV ownership profiles of the elite owners are that they are:
- highly educated.
- highly compensated.
- multi-car families.
- low mileage requirements for the families’ second car, i.e., the EV.
Current EV owners are dramatically different from most of the vehicle owners. Unlike the profile of current EV owners, many are single-car owners, and most of the potential car buyers are not as highly educated, nor as highly compensated as the elite EV owners. Mandating a change to EV ownership and forced austerity may face a rebellion from those that need affordable vehicle transportation.
Historically, internal combustion engine (ICE) car sales in America are upwards of 55 million annually with about 15 million or 27 percent being new and 40 million or 73 percent being used car sales.
- New vehicle sales: In 2022, the auto industry in the United States sold approximately 13.75 million light vehicle units. This figure includes retail sales of about 2.9 million passenger cars and just under 10.9 million light trucks.
- Used sales: Sales of used light vehicles in the United States came to around 38.6 million units in 2022.
With a total of 50 to 55 million ICE vehicles being sold annually for new and used, it’s obvious that the auto industry and the economy has been benefiting and prospering in the used ICE car market.
To date, the EV industry has virtually no used car market! In addition to the constant EV charging challenges, who wants a used EV that may soon need an expensive battery replacement?
With about 73 percent of all car sales being that of used combustion engine cars, the lack of a resale market for EV’s may be a major problem for the auto industry.
Since most states lack the year-round temperate climate that Californians enjoy, the distribution of EV ownership throughout the nation should be a concern to the auto industry. With 40 percent of the EV’s in America being in California, that leaves the other 60 percent being among the other 49 States, or approximately 1+ percent per State.
- To support the State’s EV growth,California imports more electricity than any other US state, more than twice the amount of Virginia, the second largest importer of electricity. California typically receives between one-fifth and one-third of its electricity supply from outside of the state.
- The other 49 states have virtually non-existent EV charging infrastructures, and a few of them may be exporting their electricity to California!
With the supply of electricity not keeping abreast of the growing demand, the UK is ahead of most of the world, protecting its grid with Smart Chargers, and setting up Separate Meters for the EV charging users to pay for a new grid!
- As of May 30, 2022, in the UK, new home and workplace chargers being installed must be “smart” chargers” connected to the internet and able to employ pre-sets limiting their ability to function from 8 am to 11 am and 4 pm to 10 pm.
- In addition to the nine hours a day of downtime, authorities will be able to impose a “randomized delay” of 30 minutes on individual chargers in certain areas to prevent grid spikes at other times.
- The UK Electric Vehicles (Smart Charge Points) Regulations 2021 came into force on June 30, 2022. All home installed electric vehicle chargers are required to be separately metered and send information to the Smart meter data communications network. Potentially this legislation allows the electricity used for charging EVs to be charged and taxed at a higher rate than domestic electricity. The technology enacted also enables the rationing of electricity for EV charging because the government can decide when and if an EV can be charged, plus it also allows the EV battery to be drained into the grid if required.
As new EV inventories on dealer lots continue to rise, there are bumpy roads ahead for EV penetration into the lifestyles of the common folks.
This piece seems VERY unaware and seems to be suggesting irrelevant connections between already understood facts. And I’d say this would be purposeful if this author has deep knowledge of the EV scene.
First, most respected EV brands have been extremely hard to get new, with long waiting times, logistical bottlenecks associated with coming out of the deep Covid issues affecting supply chains, changing and uneven incentives and etc. And the changing of political policies of the IRA Act. That there may be inventories of EVs emerging is GOOD thing as it’s normal in the rest of the auto industry. No doubt interest rates over 6% is a contributing factor, and wise people don’t want to be burdened with more debt and is NOT confined to EVs.
California has ALWAYS imported electricity from other areas that have a cheaper surplus and much of it is renewable energy from the Pacific Northwest from the Columbia River project where it retails as low as 6.5¢/kwh 24/7. The Pacific Intertie from the Columbia R to San Diego is a 500,000v DC transmission line that is converted back to AC at its terminus. This reduces fossil fuel CO2 production and supports peak usage in the summer. The PNW uses the most energy in the winter.
California doesn’t so much have a temperate climate as a Mediterranean one where most people live and is the most populous state with a vibrant economy. And California has the most beneficial EV policy support – along with multiple states that have adopted CA emissions rules. NO surprise that CA has the most EVs!
Meanwhile, GM is just beginning a giant ramp up of new EV models much cheaper to make and with more advanced technology. This and huge advances in China production will make EVs cheaper. China is the biggest producer of EVs and has the biggest auto market. They are already penetrating Europe with new models. There are some being sold in the US. Every major auto group has a presence in China also.
Meanwhile the reallocation of tax credits in the US is going to increase demand for EVs – especially if interest rates begin receding.
This author seems to deliberately ignore facts on the ground.
I agree. The article is a fictional account.
Spot on. This guy is a schill got the oil oligarchs.
Which of the facts in this article are you challenging? CA imports by far the majority of foreign oil of US states, and relies totally on fossil fueled power imported from adjacent states, to sustain its “green virtue signaling grid”. Even then it has regular brownouts and blackouts. I lived there in the Bay Area in 1981/2 and it was fantastic. Fast forward 40 years and it’s a cess pit of homeless and crime in the major cities. As businesses and people leave the tax base is eroding, placing more stress on those left behind, but State, County and City councils continue their policies and double down thus ensuring the cycle repeats ad infinitum. CA imports to Oregon and Washington State ensure these disasters continue in those states. LOL.
EVs are not a practical choice for most people in the country. They are more expensive than a traditional car. They have no extra value and many downsides to owning them. Range falls off dramatically in cold weather, they take too long to charge, and trips have to be planned around the charging infrastructure instead of the shortest distance from point A to B. At this point in time operating costs may be cheaper than a traditional car but properly taxing them for road use as well as improving the electrical infrastructure to support them negates any advantage they may have.
Lane, a couple of factual corrections:
a) It costs LESS (not more) to own and operate an EV vs. a similar ICE car.
b) Winter range reduction is around 10% t 15% — not what I would call “dramatic”
c) While charging on a long trip does benefit from a bit of planning, I have experienced negligible inconvenience or impact on choice of route.
d) Charging 2 EVs at home, with a very basic charger, SAVES time vs. going to gas stations.
e) My state assesses each EV $100 / year to replace the highway fuel tax; including this expense, our average “fuel” cost has been under $0.04 per mile (that’s for 8 years and 85,000 miles).
f) Despite all the above, the main advantage of an EV is zero tailpipe emissions.
Since you don’t seem to have any personal experience with EVs you would do well to check the facts.
Lots of EV shills in the comments 😄
In the future, NIO already does this in China, the batteries are owned by NIO, recharged by NIO. They are swappable. Drive to “fuel” station, in 2-3 minutes the low charge battery is swapped for full battery. You pay for the electricity you use. This is the future.