Electric cars are too expensive because Americans insist on having more car than they need - Autoblog
By: Insider Feb 2nd 2023 at 5:00AM (Autoblog)
US car buyers love SUVs and pickup trucks.
But if they want to go electric, they'll have to pay for it, at least in the near term.
This follows on very nicely, after yesterday's post .
S E E D E D C O N T E N T
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The average new EV sells for over $61,000 in the US, locking many buyers out of the market.
- Cheap-ish EVs are slowly rolling out.
- But Americans love SUVs and trucks, and they're going to have to pay for them in the near term.
Americans tend to think a bigger car is a better car.
The most popular vehicle segments in the U.S. are SUVs and pickup trucks. The Ford F-Series has been the country's top-selling vehicle for more than 40 years — followed last year by the Chevrolet Silverado, Ram pickup lineup, and Toyota RAV4.
So given that a large vehicle is what a good portion of the U.S. population is looking for, it's no surprise that rule applies to electric vehicles, too.
It's one reason EV adoption has only been creeping up in the U.S., barely hitting almost 6% in 2022.
A lot of prospective EV buyers just haven't yet found the types of EVs they're looking for. They don't necessarily need more luxury electric sedans — they want the trucks and SUVs they're used to.
"Up until recently, we really didn't have much optionality in that from an EV perspective," Steve Patton, EY America's mobility sector leader, told Insider.
"It's no surprise and no coincidence that most of the new models being introduced or planned to be introduced over the coming months are around that segment because that's what we as U.S. consumers want to purchase."
A recent study found most car-buyers don't want to spend more than $50,000 to go EV, but they also want electric trucks and SUVs that inherently cost more. Tim Levin/Insider
Bigger batteries mean more expensive cars
That model availability compounds EV cost. The average new EV sold for $61,448 in December, Kelley Blue Book estimates.
And yet, a recent Deloitte study found that 70% of U.S. car buyers won't spend more than $50,000 to go electric.
Bigger vehicles are often just more expensive, largely because they require bigger batteries — the most expensive part of these new EVs. Popular EVs today include the high-end electric $100,000 GMC Hummer pickup, $75,000 Rivian R1T, and nearly $62,000 Cadillac Lyriq.
There are more affordable EVs available, but it might mean car-buyers have to sacrifice which segment they want. Chevrolet
What a car buyer could look for
Those wanting a cheaper EV may want to look at less expensive models like the $27,800 Chevrolet Bolt and the similarly-priced Nissan Leaf. That might require some sacrificing, though.
In the long run, EVs are generally creeping down in price, and more affordable SUVs are starting to come into play. The Volkswagen ID.4 and Kia Niro SUVs go for just under $40,000 each. The Hyundai Ioniq 5 and Toyota bZ4X SUVs are at about $41,000 and $42,000, respectively.
Plus, the new EV tax credits might be able to help out even more — in fact, those don't even apply to higher-end EVs above certain MSRP caps.
Important battery minerals, especially lithium, drove the cost of batteries up 7% last year. Increased demand for more and more battery materials has delayed the future of plummeting EV prices, but these drops are still in the works.
And over time, with scale comes lower prices.
"For this segment to be more than just a niche, it has to get more affordable, but it also has to operate across multiple vehicle types," said Stephen Beck, managing partner of consultancy cg42. "That's happening, and that leads to a competitive environment that's a lot more dynamic."
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The least expensive EV on the European market is the Dacia Spring . It's a very basic car, getting low safety scores because it doesn't have all the electronic doodads. It's up to the driver to avoid accidents. Once in a crash, the Spring does as well as the average modern car - quite well.
It's selling like hot cakes. The price has been raised by almost 80%over the year and some that it's been on sale! ... to a little over $20K including 20% VAT.
There are supposedly over 200,000 reservations for the F150 Lightning and no reasonable expectation
of delivery dates. Dealerships have only a few in stock start at $70K - $105K
F-150 Lightning Reservation Closure & Order Information (ford.com)
Americans love big, bad pickups, and right now the biggest and baddest is the Lightning. Price is unimportant when demand is so much greater than offer.
I was stunned when my neighbor paid cash for an F250 MSRP $88K he got it for $83K
put 9,000 miles on it and sold it for $80K
Used that to buy a RAM Pro Master "motor Home" which he eventually sold for a profit.
Then he bought a new Toyota Tundra for $40K and says he'll never buy a Ford again, lol.
The other car is an EV Hyundai and he isn't sure he likes it yet but he sure is happy about not putting gas in it as opposed to the Tundra.
EVs will continue to creep up in sales.
It'll be slow for several reasons.
Yes.
Of that list, I really think the only accurate one is the last.
The real-world issues slowing this transition are concerns about range, cost, and lack of charging infrastructure. All of those will be immensely better in 3-5 years, and everybody knows it. So there is every reason for prudent people to wait and very little reason to rush.
Yes, a lot of people will resist change. But I think we should add one more to the list.
How many single people are living today who just don't need a second car? Until the car range is close to an ICE car now vs charging time, why would a single person want to purchase a second car and pay the additional licensing / insurance on it just so they can have an EV car for in-town errands? I've retired so I drive very little these days, most of my long trips would be from Phoenix to Tucson or Phoenix to Las Vega. There's really at this point no upside for me to get a second car. This can change as technology changes but right now there is just no real upside for me to buy an EV.
I agree. I'm a lifelong car nut, and EVs are where it's at, these days. I keep up, even though I very much hope that our great old cars (two Citroëns in Calais, and a baby Buick in Yuma) will hang on a few more years.
Right now, particularly in the US market, manufacturers are taking crazy advantage of customers' desire for novelty, being cool, and all sorts of things that aren't really "car".
That will level off.
The fact that a significant portion of the public is locked out of EV acquisition is a problem in lots of ways. Socially, differentiation by money is always bad... but let's not derail into that space .
The used-car market is starting to fill.
More accessible EVs are sure to come. There's no intrinsic reason for EVs to be more expensive than ICEs. The battery is expensive, but electric motors are much cheaper than ICE. Right now, manufacturers are overloading their cars, to surf on novelty. But that won't last.
It's kinda crazy that there's a much wider selection of accessible EVs in Europe. Why??
Yes it is. But the last time I looked, a lot of them were almost ready to have their batteries replaced and the cost of replacement batteries is rather high still. It will get better as technology gets better and more factories come on line that create the batteries, but I think that's still a ways in the future.
I can think of two reasons for this but have no proof either way. 1 would be the American public as it's been pointed out almost demand all the fancy toys on their cars and 2nd the government regulations for safety that seem to lock out a lot of vehicles that are allowed to be sold in other countries. Like I said I have no proof, this is just my opinion.
As I said above, for me personally there is no reason for me to buy a second vehicle just so that I have an EV. Until technology gets better, the grid gets improved (where it's needed), recharge times come down and distance allowable gets greater I will not be buying an EV. I only need the one car and right now I cannot get into an EV and drive up to Las Vegas without a huge change in my process which is not something I'm willing to do at this point in my life. I see no reason to have to break a drive to Las Vegas into two sections with a several hour layover in the middle to recharge a car.
I'm in the same place. Wait and see.
You're right about car-safety rules in different countries. There are Indian cars that wouldn't be allowed in the US... or in the EU, where standards are equivalent. Standards are too similar to explain differences in products.
It wouldn't be your second car. It would be the replacement after your current car wears out.
In 5 years time, we'll see range much higher than it is. We'll see infrastructure in place where you can charge the car completely in 5-10 minutes. You were gonna go to the bathroom and stretch your legs in the truck stop anyway, so you won't really notice much difference.
We're not there yet. No question. But it's coming, and way sooner than many of us think.
I don't know. I don't think electrification is likely to bring about massive changes in people's preferences for what kind of vehicles they like to drive. I don't suspect we'll see huge sales of full size pickup trucks in England, but I also don't think we'll see Mini become the top seller in the US.
Most people drive the car they do because they like it to some degree. The path of least resistance is to replace whatever you're driving now with an electric version of whatever you're driving now.
I kinda don't understand when people compare the US market to places like Europe. We are not the same. The US is basically nothing but expanse, where as most of Europe would fit inside of us. Our driving needs are a lot different. Nothing is really close by. Cars have become more of a necessity.
Also our habits and way of life. People want to be able to go to the grocery store and be able to fit it all in the car along with two kids in the back.
Wish you would have read my entire comment. In this case it would be a second car as an EV just doesn't have the range for me to drive from Phoenix to Las Vegas. That can change in the future as technology gets better but it's not there today so buying an EV now would make me buy it as a second car. There is no reason for me to take on the additional expense of licensure and insurance just so I can have an EV. And I believe there are many single people in the country who are of the same mind.
An EV car just doesn't work for my needs at this point in time. When technology gets better, range increases and recharge times are reduced then it becomes feasible and then I can consider a replacement for my current car. But as my current car only has 94k miles on it and everything is working correctly and my average since buying the car has only been 10k per year it's possible this could also be my last car. Don't know, not gonna worry too much about it. But for me (and i believe a lot of people who think like I do) there's still a lot of growing up the EV industry needs to do before it's ready for prime time.
EV 's will never become cheap enough to garner much of the market. Technology can only improve batteries so much.
“Technology can only improve batteries so much.”
Really? Technology moves faster than ever before, particularly when there is a profit to be made. Just wait for it and we will all be the beneficiaries.
Just throw your arms up and say it's impossible so why even bother to try... Oh wait... You already did.
Without subsidies the EV industry won't survive. These car are simply not efficient or reliable. And they will little, if any, effect upon global warming.
Meanwhile, larger trucks, planes, trains, and ships will rely on diesel
Actually, subsidies to the petroleum industry far outweigh those to EVs. Without subsidies, you'd be paying ten or fifteen dollars a gallon... and thinking seriously about buying an EV.
Average household spends $3,000 a year on gas for 1 car.
An EV would be less than $300 a year for the same driver.
You sound like the people in 1902 who argued cars would never replace horses.
The future is coming even if Greg doesn't come with it.
The ocean shipping industry is working on reducing its carbon footprint and it's being led by Maersk Shipping, (the world's largest container carrier).
The airlines are doing the same.
They have a LONG way to go. Ammonia is a possibility for big ships. I know of no serious solution for airliners. Blimps, maybe?
There are several short-haut electrics close to operational, and air-taxis... But I see no viable path for long-haul. Hydrogen tanks are too big, and electrolysis is expensive. Cracking methane is a face-palm.
there are now 8 models of cars with solar roof panels.
I believe Lightyear has a Solar hood and decklid as well.
The commercial Tesla Semi currently doesn't come with a trailer but
Tesla has recently announced solar kits for trailers whether they are doing long haul or
just for camper attached to an EV.
The developments just keep coming.
Sure, Tesla, a solar trailer | TechCrunch
A car's roof is too small for enough solar panels to be significant.
I thought they were trying to make solar paint. I heard about it once and never heard about it again.
They need to make like windows on office buildings some how solar generated.
15 to 21 feet of solar panels is significantly more then zero solar panels.
The coming Lightyear models have 58 sq feet providing a constat 15% recharge while driving on a sunny day.
I believe one of their examples is a person in Spain driving an average of 21 miles a day not needing to recharge for 7 months.
And this technology is essentially in its infancy.
It's certainly something that should and will be followed up. If someone makes a breakthrough on this, they'll be rolling in money.
It's not here yet, though. Lightyear looks to me like vaporware.
People mocked Fulton and Ford too.
Lightyear might be following the path of the Tucker Torpedo but that
shouldn't keep them from trying.
Oh, indeed! I wish them success. I think their product is far too expensive for anything but homeopathic diffusion... but I'll be happy to be wrong.
Did you watch it?
He pretty much talks himself into being optimistic about the possibilities of free miles
while charging on the go or parking in the sun.
This one followed that one.
Solar Panels on a Tesla - YouTube
I believe one or the other referred to it as a useful supplement
better in Texas or Spain...
Solar panels are around 22-23% efficient. So there's a LOT of room for improvement. Wait and see....
As long as I am selling my excess production back into the grid
why should I care about the efficiency of my panels.
That only means when the lease is up they replace the existing 63 with a much lower number of panels.
It is all a very well choregraphed dance with the grid owners.
My Comment was in relation to solar power on cars.
Here, LOL.
Perfect for Phoenix or Texas
There's certainly a market if they can keep their promises. Citroën recently began selling a cheap electric urban runabout.
Anywhere there are sunny retirement communities in a fixed income?
Sun City here we come.
There are people who have only a golf cart. That's all they need -they don't go or carry heavy loads. Even a small hatchback is overkill.
... yeah, but it won't go five hundred miles on a charge....
Do a little searching. There's lots to be found. Tons on YouTube.
They already are . IMNAAHO, this is another case where people need to change their ways a little bit... and "a little bit" is way too much for some people. Some people will simply refuse any change. That's their problem.
Sorry, but I'm going to disagree on this.
We're going to see increases in range, decreases in cost, and a huge boost in charging infrastructure over the next few years.
People pay that much for a truck now.
I am waiting for two things.
First is to see what will happen in ten or twenty years when we have a bunch of used ones. I read an article that insurance companies are just writing off some Teslas. One car would have been 50k to fix it.
Second would be the inevitable fight over the government getting less tax money as less people use gas. You know they will have to make up that loss somewhere. Rep Issa just introduced a bill that would make it illegal for the feds to tax for miles driven.
Exactly.
That will be 3-5 years, as soon as they start coming off their leases. You've already got PHEVs on the used market everywhere.
Well spotted. That's going to be interesting.
From what I gather it was the Obama administration that first floated the mileage tax.
That got kind of creepy with some suggesting a device that tracks how far you have driven.
All cars have GPS. It would be s-o-o-o easy to know how far a car has gone, each time it refuels (regardless of the fuel).
I think I recently read WI said they look at an increase for the licensing and annual tab fees for EVs to make up the difference in the gas tax.
A mileage tax is going to be incredibly regressive in most places, so I don't see Democrats supporting it if anybody bothers to do the math.
Quite a few companies are developing processes for recycling EV batteries. They should be operational when needed.
The tax problem is real. And VERY complicated, with subsidies making it even more complicated. But of course, I am totally confident that our politicians will find appropriate and equitable solutions
.
I have read some of the objections - all by people who have never probably owned or even had a ride in an EV
We rented one in Seattle. It took about ten minutes to get used to the acceleration.
It took longer to get used to front wheel drive 30 plus years ago.
Some of the assumptions simply do not apply to the 2 million Prius owners.
There are already over 6 million evs on the road.
Toyota already has a state of the art battery recycling center and almost every
EV has an outrageous battery warranty
so far out as to encourage a trade in after 10 years - Toyota has generous allowances for their dealers refurbishing a decent used car.
Mazda is similar 8 years or 100,000 miles.
All of the objections can be overcome except for those people who cannot change, because...
I have been in a hybrid. Never a full EV. Imo for it to be feasible it would have to get to the point where poor people could buy one for five to ten grand.
There are no new cars of any kind at that price point.
It will take a few years for the used-car market to get there.
That was my point. It will take a while to get there yet I wonder if it will. What kind of shape would a 5k EV be in. Would it hold a charge because it would be at least ten years old.
The cars are usually covered by some kind of generous warranty or after the fact
A Mazda dealership servicing a battery on a trade in gets a sweetheart deal from Mazda provided the original battery is returned properly for a core.
The other nightmares are being addressed. Here is a good read.
When an out-of-warranty EV fails, who you gonna call? | Electrek
It still cost him five grand to fix it, if I read that right.
The math still doesn't add up. A car that is only worth 5k yet needs a 5k fix.
It was $5K to ship it to someone that could fix it for an unknown amount,
certainly less than $12K.
Those B Class mini vans are still worth $30 to $45K.
I still don't see it as feasible. So some car that won't even drive 100 miles is still 30k....
Also the people that can only afford at the most 10k are still not going to be able to afford repairs.
For a couple or a single, class Bs are perfect. And parkable!
EVs are simpler than ICE. When the dust settles, EV maintenence will be cheaper.