Never Stop Driving #64: EV struggles
The EV deals are just around the corner. Tesla has already repeatedly dropped the price of its cars, while new EV models continue to join the market. General Motors, for example, is debuting several new EVs before the end of the year, with the Chevrolet Silverado EV slated to start production soon.
Meanwhile, some dealers are struggling to sell the EVs already for sale. One dealer I spoke with, who sells Mercedes and other high-end brands in a cold-climate state, told me that he had five EVs bolted to the showroom floor. He said that all the early adopters have already bought their EVs and his customers are concerned about reduced range as we head into the winter months. There’s an EV glut coming, with a silver lining being likely deep discounts.
Car companies are well aware that the transition to electric vehicles is going to be messy. They’re responding, however, to several future government regulations on tailpipe emissions that essentially mandate EVs. Even Dodge’s architect of the Charger and Challenger muscle-car awesomeness, CEO Tim Kuniskis, pragmatically acknowledged the transition at the recent burnout-fest known as Roadkill Nights. In an interview published by Automotive News, Kuniskis talked about the new electric-powered technology. “I get it: Not everybody is adopting to this technology right away, and not everybody will,” he said. “It will take many years for everybody to, but people will. Early adopters will, and when they see what we can do with this technology, they will start coming along.” Kuniskis also said, “This is the regulation. This is where the industry is going. This is what we have to do.” Dodge has already revealed an electric version of the Challenger that blends muscle-car looks with a synthetically generated exhaust sound.
Regulations cost money and several car companies have acknowledged that profits from gas-powered vehicles are temporarily needed to fund development of EVs. Tesla seems to be making money with EVs, but that company enjoyed a long head start. The average price of a new car is now nearly 50 grand. Auto loans are feeling more like house mortgages and now average six years. Not surprisingly, people are keeping their cars for longer and the average age of the cars on our roads continues to climb: It’s now at 12.5 years. There are only a few new cars for sale that cost around 20 grand yet dozens for more than 100. Interestingly, GM reversed the decision to kill its most successful EV, the Bolt, which will utilize a new, more efficient Ultium battery pack that should cost 40 percent less than the current Bolt’s battery technology. One can assume that this second-gen Bolt will cost less, too.
I imagine many of you are thinking, “There goes ol’ libertarian Larry slamming the gubment.” Actually, I understand the need for regulation and the benefits it achieves. When I lived in a town that was beset with smelly and heavy smoke from nearby steel mills, I experienced how air pollution negatively affected the quality of life. A few years ago we published a piece on the EPA’s 50th anniversary. That agency faced plenty of pushback some 50 years ago when it enacted the car-emissions rules that ultimately helped reduce Los Angeles’s pea-soup smog. The computer-controlled engines initially made to meet those EPA regs are one major reason we now have gazillion-horsepower Dodges and Chevies that start on cold mornings and idle easily in traffic. I’m also grateful for the increased crash safety of modern cars and once made a film about how the Corvair was the sacrificial lamb that sparked the auto-safety push.
I am conflicted about our current state. Change is often painful and unwanted. Are we experiencing the discomfort of change or reaching too far for something the buyers don’t want? I often think about the dozens of off-the-record conversations with car executives I’ve had over the years who all point out that when gas is expensive, people use less and demand alternatives. While my mom regularly complains about the price of fuel, that figure has actually been remarkably stable over time when one adjusts for inflation. This despite the fact that we consume some 30 percent more oil than we did 50 years ago.
These are complicated issues that I fear I’ve oversimplified and in turn perhaps projected a pessimistic view of the future. I feel positive, in fact, partly because of what we do at Hagerty Media, which is to embrace all cars but largely focus on the past. That research reveals time after time the ingenuity of humans to find unexpected and inventive solutions to problems. I hope you agree that we highlight those stories and if you’d like to support us, please join the Hagerty Drivers Club.
The thought of optimism reminded me of a recent visit with Hagerty columnist and car fan Jay Leno. My colleague Aaron Robinson and I watched Leno perform at The Comedy & Magic Club, where Leno proved he’s as funny as ever. The next day, we went to Leno’s garage for a wide-ranging conversation that included autonomous and electric cars. Leno, who regularly drives his Tesla, is infectiously optimistic. He simultaneously loves the past but also embraces change. We could all learn plenty from Leno.
Have a great weekend!
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