The electric car market is cooling – in fact, many say it is downright chilly.
“Electric vehicle sales have hit a tipping point,” Yahoo Finance reports. “Research firm Kelley Blue Book (KBB) finds that US EV sales in the third quarter crossed 313,000, nearly a 50% increase from a year ago, with EV market share hitting 7.9% — its highest-ever level. But this milestone might not be good enough for automakers spending billions on an EV transformation.”
EVs are much more expensive, costing significantly more to own than a hybrid, require electric charging, have range limitations, and require electricity to charge on an already taxed electric al grid – whereas hybrid vehicles reduce the use of fossil fuels while lowering emissions in the short term.
Ford and even Tesla are dialing back EVs. “GM is scrapping its target of producing about half a million new EVs by the middle of next year, Ford extended its timeline to hit a goal of 600,000 EVs a year, and even Tesla sees demand softening.”
Because of the expense, and charging issues, electric cars have become a harder sell. “If it doesn’t have a motor, it’s going to be a problem,” a car expert told the Globe. “That’s what makes hydrogen such a viable source – no batteries.” (That’s another article at another day…)
Last week, Hertz Car Rental company announced that it plans to sell off 20,000 of its electric vehicles, including Teslas, write off a $245 million loss, and buy more gas-powered vehicles. It seems that travelers aren’t crazy about electric car rentals. A friend reported when he and his wife traveled to Hawaii for vacation, the car rental agency only had electric cars available. Begrudgingly they accepted one. However, they were never able to find a charging station and quickly returned the car to Hertz. The car rental agency acknowledged there were no charging stations on the island except at the rental car location.
This is what forced consumption of a product by government looks like.
Buick
General Motors announced in late December that nearly half its Buick dealers opted for buyouts rather than invest in selling and servicing electric vehicles as the automaker’s brands transition to all electric by 2030, Detroit Free Press reported in December.
“That means GM will end 2023 with about 1,000 Buick stores nationwide, down 47% from where it started the year. Late last year, Buick said it would be asking dealers to commit a minimum investment of $300,000 to $400,000 to prepare their stores to sell and service EVs.”
The issue was that Buick expected its dealers to commit a minimum investment of $300,000 to $400,000 to prepare their stores to sell and service EVs. Instead more than half of the dealers said no.
Ford
50 Percent Of Ford Dealers Opt Out Of EV Sales For 2024, read the headline by Ford Authority in December. “Since it announced the Model e Certified program last year, Ford has dealt with its fair share of backlash related to this new EV sales program, which Ford dealers were given the chance to either opt in or out of.”
“According to FoMoCo, around 1,550 Ford dealers in the U.S. – around half – have chosen to opt out of the EV sales program in the coming year, compared to the 1,920 dealers that opted in roughly one year ago.”
With the high number of Ford dealers deciding to opt out of the EV market, Ford is dialing back planned EV investments.
Volvo
Volvo (owned by China’s Zhejiang Geely Holding Group) pulled the plug on its electric vehicles. “Volvo has announced that it will no longer fund Polestar, although the two brands will continue to collaborate on manufacturing and R&D,” Car and Driver reported Thursday. “Volvo and Polestar are breaking up—financially speaking, that is. The news comes after Volvo announced it will no longer fund Polestar, which features a slowly expanding all-electric lineup. Instead, Geely, the Chinese automotive giant that owns both brands, will now provide full financial and operational support to Polestar going forward.”
Car and Driver tells us more about the Polestar and Volvo EV market:
“While Volvo won’t be giving Polestar money anymore, the two will continue to collaborate on activities including manufacturing and R&D. Of course, Volvo also has the benefit of selling cars and SUVs with internal-combustion engines along with its upcoming EVs such as the EX30 and EX90.
Meanwhile, Polestar exclusively sells EVs, which are currently seeing a decline in sales around the globe. Being an all-electric brand with a tiny lineup (right now, the Polestar 2 is the only model sold in the U.S.) as well as a slow rollout of new models has caused the company to struggle.”
Electric vehicles versus hybrids
Kelly Blue Book did a thorough analysis of Hybrid vs. Electric Cars, and concluded that Hybrids make more sense. “Although EVs may well be the long-term solution, it seems they could be a short-term disaster,” they report. “Based on current realities, hybrid vehicles reduce the use of fossil fuels while lowering emissions in the short term.”
They offer pros and cons of hybrids and EVs, and conclude that EVs are NOT the most sensible tool for reducing fossil fuel usage while cutting harmful emissions. “Rushing headlong into force-feeding EVs to the public invites short-term disaster.”
Kelly Blue Book reports on the 5-year cost to own projections.
Do Electric Vehicles Cost Less to Own?
“This is one of the biggest misconceptions about fully electric vehicles. No, they don’t cost less to own in the first five years. It costs more to own an EV than a hybrid in that timeframe, even if some or all of an EV’s inflated price difference is negated with a government tax credit or a rebate.”
Kelley Blue Book’s 5-Year Cost-to-Own Projections
| 2023 Kia Niro Hybrid | 2023 Kia Niro EV | |
| Depreciation | $17,233 | $32,026 |
| Fuel | $4,714 | $3,771 |
| Insurance | $5,107 | $5,399 |
| State Fees | $3,127 | $4,000 |
| Financing | $4,359 | $5,758 |
| Maintenance | $4,082 | $3,018 |
| Repairs | $686 | $686 |
| Total 5-Year Cost-to-Own | $39,308 | $54,658 |
“Yes. That’s a 5-year cost-to-own difference of $15,350,” KBB reports. “Therefore, even if the Kia Niro electric car qualified for the maximum federal tax credit of $7,500, which it doesn’t because it’s built in South Korea, it would still cost thousands more to own.”
Just imagine what the used EV market will look like in short order.
KBB also notes that Oil is in plentiful supply. “Yet when making lithium-ion batteries, five of the metals required come from a few third-world countries with little in the way of mining regulations or oversight. Despite pushing for consumers to drive electric vehicles, environmentalists and the federal government have prevented mining precious metals in the U.S., citing environmental concerns.”
“China controls most of the world’s cobalt, another rare metal critical to lithium-ion battery production. Chinese companies own the cobalt mines, primarily in the Democratic Republic of the Congo, extract the ore there, and then ship it to China. What could go wrong?”
As Russ Heaps says at Kelly Blue Book, “a ride around the block on the reality bus makes it abundantly clear other reasons beyond price tarnish the EV spit shine, blinding many EV drum beaters.”