Well, I mean…there is one reason. Low gas prices. That is, if we’re talking about the U.S. market.
BEV’s are strong economic competitors in places with high gas prices, like Europe or California (where gas prices are about 50% higher than the rest of the U.S.). In that environment, the fuel savings are compelling. But in a nation with sub-$3.00 gallon gas prices? The economics get harder for BEV’s.
It may just be a product that will not have a lot of volume in our domestic market, which is going to make it very difficult for our domestic manufacturers to do well in that arena.
We aren’t dealing with our grandaddy’s free market capitalists. Back then, the majority of FMCs believed the economic system should benefit consumers and the public. Now they think the beneficiaries should be corporations, with a singular focus on shareholder value.
Sure. But the fuel costs are still cheaper. You’ll save roughly twice as much per mile by switching to electric in Europe than you would in the U.S. (ex California and other high gas-price states).
It’s not just gas prices, although high prices will give a turbo boost to the sector, for sure.
EVs are fun! Yes, they’re more fun than gas cars. They’re quicker, they’re quieter, and assuming you can charge at home (over 80 million single family homes out of 95 million families, although not all of those single family homes might be quite right for various reasons) they’re cheaper - even with low gas prices. I’m in one of the lowest electric priced areas of the country (TVA land) and low gas prices too - and it’s still 1/3 the price to charge at home. (Actually free for me, with modest solar, but you get what I mean.)
Story: My brother is having his wife’s car epoxy coated (or something), so he drove it an hour to the big city and they gave him a loaner. A Tesla. He has never had an electric car before (he has ridden in mine once or twice). [Sidebar story below, if you care.] They gave it to him with 25 miles of juice and pointed him to a Tesla supercharger station. In the 3 days he’s owned it, he’s gone back to the charger four times, not because he neeeds the charge but to talk to EV owners. Every one, every single one, when asked the question ‘would you do it again” has answered “I’ll never have another gas car.”
Now I know there are some who don’t/won’t like them, but his experience has also been my overwhelming experience in my two years of ownership. EV owners talk to each other like boat owners or RV owners - we like to gab about them. I have yet to find someone who says “Nah, looking forward to going back.” My brother gives back the Tesla today, and has called me to tell me that his next car will definitely be an EV (but not a Tesla.) He hates the “screen everything” and wants physical buttons, and he hates Musk. But his next will be an EV, for sure.
[The side story: at the auto detail place they handed him the “loaner”, gave him 2 minutes of “this is here and this is here and this is here”, none of which he remembered, so he called me from the charging station. I was pretty useless since I don’t drive a Tesla, but his conversations with other owners has been “a week of intensive figuring out and then it’s fabulous.” This, I’m sure, is why Hertz made such a huge mistake in going full bore with EVs; people take time to adjust to something radically - if not really radically new. I remember my first week: range anxiety, where is the A/C, how do I work the navigation, etc.
[Getting into a strange, but similar gasmobile, since Detroit is largely derivative in design, is nothing like the first couple days in an EV. But once you make the leap you are unlikely to go back, Dr.Bob’s constant posting of some poll or another notwithstanding. Hertz made the mistake of pushing customers into unfamiliar cars, without training, and when charging stations were fewer and farther between.]
EVs are going to take market share simply because they’re better. They won’t be cheaper for a while unless battery prices collapse or something, and gas and diesel will continue to have a prominent place, especially in the heartland, but EV ownership is here. Detroit knows it even if they won’t publicly admit it.
I think Detroit knows, and will cheerfully admit, that EV’s will be in the mix. I think they lost a ton of money because they assumed that U.S. consumers would buy a lot more EV’s, and a lot faster, than turned out to be the case - not because it turned out that no U.S. consumers will ever buy EV’s.
Because gas prices in the U.S. are so low, it’s going to be hard for EV’s to break out of being a mostly niche product for a while. They’re under 10% today, and will probably remain below 10% for a while - especially once volumes drop again this year with the full year of tax credit rescission. We’re just not going to see rapid uptake here in the U.S. for a bit.
Here’s the thing - if EV’s end up being a mostly niche product in the U.S., but a much more mainstream product in overseas markets, then U.S. automakers are going to have a very hard time competing. Because all their global competitors will have large domestic markets for their EV’s to spread their development costs over, enabling them to thrive in a niche U.S. market. Meanwhile, U.S. automakers will have a very small domestic market for EV’s, hampering their ability to export to (or develop for) the larger markets abroad. Not impossible, but harder, if your domestic market demand doesn’t match up with global demand.
What new regulations? Where? In the U.S.? That seems incredibly unlikely. The federal gas tax hasn’t been raised in more than three decades - even through Democratic “trifectas” where they controlled the entire federal government, and even though taxes are something that can be included in reconciliation bills (which can’t be blocked by filibuster).
If anything, the reverse seems more on offer, with California and Oregon dipping their toe into the idea of moving away from gas taxes and towards mileage taxes. Granted, even those initial efforts were as dismally unpopular as gas taxes are, and the CA proposal ignited massive pushback:
How long do you anticipate gas prices being low? I know we probably aren’t at Peak Oil. But I’m thinking that these low prices can’t last. And all these chasing/stopping “shadow” tankers would only decrease supply (I would think).
Fracking was a massive technological breakthrough that enabled viable economic access to an awful lot of oil, and there’s no reason to suspect right now that the expansion of recoverable resources caused by that is getting used up any time soon. Sure, at some point you brush up against supply constraints again (perhaps many years from now) - but then again, at some point you reach the end of Russia sanctions due to Ukraine, also.
Plus, we are seeing uptake of EVs and hybrids in markets like Europe and China, which will provide some downward pressure on oil prices for the near future. That’s why some argue we’ve hit “Peak Demand,” which will help soften oil prices.
Oil prices are very volatile - they’ll spike and crash, dramatically at times. But there’s a lot of potential capacity to add in U.S. oil resources (and others around the world) that just isn’t being extracted right now because oil prices are fairly low and we’re awash in the stuff. And we now have the ability to quickly ratchet up hybrids, PHEV’s, BEV’s, and other oil-avoidant technologies, if need be. So you would think that anything that pushed up oil prices in something more than the short term would generate a response to take us back down to equilibrium - to stimulate some of that extra capacity to be developed or get consumers to prioritize fuel economy again.
There are only a few states with high state gasoline and diesel taxes. These states with low gasoline taxes are missing out on these taxes to help fight climate change from burning of gasoline and diesel. The new regulations will be climate change related regulations. As climate change and pollution effects keep getting worse for people to cope with, they will start demanding more state taxes on gasoline and diesel like California has done and also demanding higher federal gasoline and diesel tax dedicated toward climate change and pollution mitigation. These taxes will not happen before 2030.
There is currently a glut of oil in the world, and this glut will linger because EV and Hybrids are not consuming oil as fast as oil is brought to market.
Another EV re-evaluation, this one from the luxury marketplace. It’s that flat s-curve again.
In an interview with the Sunday Times CEO Stephan Winkelmann confirmed the SUV-like EV, dubbed the Lanzador, will no longer join the Lamborghini lineup. The car was initially slated for a 2028 release but had been pushed back numerous times.
“Investing heavily in full-EV development when the market and customer base are not ready would be an expensive hobby, and financially irresponsible toward shareholders, customers, [and] to our employees and their families," Winkelmann said, adding that the “acceptance curve” for pure EVs in Lamborghini’s target market was flattening and “close to zero,” per the Times.