Renault’s CEO Doesn’t Think EVs Will Be As Cheap As Gas-Powered Cars Anytime Soon

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Renault CEO Luca de Meo has doubts about future EV price parity, Stellantis considers moving manufacturing out of China, Honda kills the base trim of the Civic. All this and more in today’s issue of The Morning Dump.

Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.

Renault Skeptical Of EV Price Parity

Renault Twingo Electric ev price parity
Photo credit: Renault

While some auto analysts have been predicting EV price parity with combustion-powered cars, Automotive News Europe reports that Renault CEO Luca de Meo doesn’t see parity happening soon.

“I do not see this parity getting close,” he told reporters on the sideline of the Paris auto show.

De Meo said that eight years ago the industry was expecting the cost per kilowatt-hour of battery power to fall by $100 within five years, but prices are not there yet.

The CEO said only so much fat can be trimmed from EV pricing when such a large percentage of a car’s cost depends on the battery. From Automotive News Europe:

[The] price of … small EVs will remain considerably higher than combustion models of the same size.

“I can come up with better battery chemistry and better power electronics, but these gains would be erased when the price of cobalt doubles in just six months,” de Meo said.

While he mentioned that it’s possible that electric vehicles may become cheaper as charging networks improve and battery sizes can come down, EVs remain expensive propositions due to heavy reliance on pricey materials — this isn’t particularly surprising. We’ve heard similar sentiments for years. [Editor’s Note: Automotive News Europe also mentions Luca de Meo’s quote: “From an environmental point of view, having vehicles with batteries of 150 kWh to 200 kWh is simply environmental nonsense.” I actually agree with him here. I think cars are too big, and I think hundreds of thousands of EVs carrying around an extra 1,000 pounds of battery that they rarely use is silly. -DT]. Of course, supply chain issues stemming from the COVID-19 pandemic have also played a part in messing with EV price parity predictions, so component costs in the next few years could be anyone’s guess.

Stellantis Considers Moving Manufacturing Out Of China

Jeep Wrangler 4Xe driving through some water
Photo credit: Jeep

Bloomberg reports that Stellantis is thinking of pulling out of Chinese manufacturing altogether. It’s not a surprising move considering the failure of Stellantis’ Jeep joint venture earlier this year, and there is some sound reasoning behind it.

“If we push ahead with this strategy — which is our strategy right now — then we don’t need plants in China,” Tavares told reporters at the Paris auto show, adding that the company could instead import vehicles made in Europe or the US. “I am not sure they are indispensable.”

Stellantis is mulling the potential exit as more established foreign auto brands have struggled to maintain their position in China’s market, raising questions about their long-term future in the country.

An asset-light approach in China sounds like a good plan given how Chinese automakers are really dominating the local market. For instance, look at Buick. It was kept by GM in the great bankruptcy cull due to strong sales in China, yet Chinese-market Buick sales have now been in a death spiral for years. Add in talk of protectionist EV credit policies in Western countries, and the advantage of Chinese manufacturing seems to be vanishing.

Honda Culls The Base-Model Civic

01 2022 Honda Civic Sedan Sport With Hpd Package
Photo credit: Honda

Hey, remember when the Honda Civic was considered a cheap car? Yeah, not anymore. As reported by Motor 1, Honda’s killing the base LX trim of the Civic sedan for 2023, meaning the entry point to the Civic range is the Sport trim costing $25,745 including a $1,095 freight charge. Ouch.

For those keeping track, that’s $2,100 more than the 2022 LX trim cost, and equipment upgrades aren’t exactly grand. While 18-inch wheels, smart key entry, and an eight-speaker stereo are big highlights, that’s about it aside from paddle shifters, sport mode, and some cosmetic bits. While the new Civic is brilliant, it’s just not great value compared to the rest of the compact car field.

This culling of the LX trim fits with Honda’s recent strategy. The CR-V crossover now starts with the Sport trim and costs a bundle more than the old model, while the HR-V subcompact crossover also moved further upmarket with its recent redesign. When production is limited, it makes sense to crank out higher-margin cars for the sake of profit. While it’s theoretically possible that some sort of entry-level Civic below the Sport trim will surface as industry shortages ease, don’t hold your breath.

The 2023 Corolla Hybrid Gets A Price Cut

Corolla Hybrid Le
Photo credit: Toyota

You know what compact car is really great value? The 2023 Toyota Corolla Hybrid. The basic LE Hybrid trim has an MSRP $1,250 cheaper than last year’s model, now costing $23,895 including a $1,095 freight charge. A big price reduction normally indicates decontenting, but the 2023 Corolla LE Hybrid actually offers more equipment than the 2022 model.

For starters, there’s a new eight-inch infotainment system with wireless Apple CarPlay and Android Auto, handy for navigating from your smartphone. What’s more, occupants front and rear can charge devices through any of four USB-C ports. Bigger 16-inch wheels replace the 15-inch wheels on the old car, and owners will get a ten-year free trial of basic telematics. Oh, and output is up 13 horsepower and 10 lb.-ft. to 134 horsepower and 156 lb.-ft. of torque.

However, things get really interesting if you’re willing to spend an extra $1,400, because then the Corolla LE Hybrid gets all-wheel-drive by virtue of a second motor on the rear axle. Power output stays the same, but this clever reactive electric all-wheel-drive system does more than just help you set off in snow. Toyota claims that it can kick in to power the rear wheels while cornering, reducing understeer. However, it does come with a fuel economy hit. While front-wheel-drive hybrid models are rated at 47 mpg combined, all-wheel-drive models are only good for 44 mpg combined. That’s still excellent, but the front-wheel-drive model’s 47 mpg combined for $23,895 is phenomenal. Either way, kudos to Toyota for keeping things cheap and cheerful.

The Flush

Whelp, time to drop the lid on today’s edition of The Morning Dump. Happy Tuesday, everyone. While automakers seem reluctant to come up with good, logical naming schemes for their EVs, a vichyssoise of alphanumerics isn’t the only way forward. Think of all the dead brands scattered about the corridors of automotive history, wouldn’t some of them make great EV sub-brands? I’m wondering which dead brand you’d bring back for EVs and why.

Lead photo credit: Renault

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27 Responses

  1. At some point we’re going to have to stop blaming COVID (and Russia) for this stuff. At least… we’ll have to stop if we want to actually solve the problem.

    In a free-er market (Certainly not a free market. Those are a myth. Like physicists assuming the chicken is a sphere. Physicists have clearly never thrown a chicken.) the supply curve for EV materials would lag the demand curve by a little, but demand would drive supply increases while the costs tempered the demand growth. We’d have a nice balance.

    There’s a practical limit to how fast we can grow the supply curve though. And it’s not because COVID. It’s just how it is. And to make matters worse, we have regulated the market in a way that impedes supply growth. Simultaneously we have mandated increased demand. The feedback loop between supply generation (read: digging more mines), demand, and market cost is broken. There are really only two ways to fix it. Either we need to mandate and fund more supply creation, or we need to stop mandating adoption. Either way works. Free-er market or more controlled. But we have to pick one.

    We aren’t going to pick either of them though. We will ban the alternatives and subsidize. And blame the resulting inflation on COVID, while using our pitiful failure as an example of why our bad policies are so successful.

  2. Considering that $25k today was $20k ten years ago, this is about right. I’d argue that this is returning to the Civic’s roots. It was the upmarket compact that people got when they wanted to get something compact without being an unreliable piece of Detroit 3 crap.

    I’m in agreement that cars don’t logically need giant 100+ kWh batteries. That said for Americans brainwashed by Big Oil that a Tesla will run out of charge in 50 miles, the security blanket of a big battery is still necessary. 150 miles of winter range combined with fairly rapid fast charging would be enough for a lot of people. Sadly people aren’t logical. So big batteries it is until the Chicken Littles get used to the fact that a modern EV can make do with a smaller one.

    1. I’m all for EVs, but anyone who ever lived in outer metro Detroit can tell you that 150 miles is simply not nearly enough in the winter. Not with the current state of charging networks and speed.

      If you go to a ball game and stop to eat on the way there, you don’t want to have to head straight home when all your friends are headed to the bar in Hamtramck. Or make a 30-45 minute detour to get to the charging station and top up.

      A car with 300 miles range would give about 200 miles in the winter, and that’s the minimum I would consider. I want 400 miles range, because I’m keeping my car far beyond when the loan is paid off, and 10 years of use might bring 400 down to the 300 to 350 range that’s the baseline for acceptable.

      Plug-in hybrids are the next step. It’s time the automakers build more of them, especially now that they’ve mastered the art of building efficient and powerful small displacement engines.

      1. If you go to a ball game and stop to eat on the way there, you don’t want to have to head straight home when all your friends are headed to the bar in Hamtramck. Or make a 30-45 minute detour to get to the charging station and top up.

        Which is exactly why we should have charging stations at all of the above locations. Gas stations are required when gasoline needs to be handled and distributed. Electricity is already wired everywhere.

  3. I’m not in favor of bringing back old nameplates for EVs because as EVs rise, ICE products will fade. Why invest a ton into a new brand, just to lose equity from all the investments already made in the old brand? It makes no sense, unless you’re at corporate headquarters and are looking for a loophole to change your sales model or a cheap way to eliminate large swaths of your dealer network.

    Individual model names are fair game: an EV named Tempest makes sense to me. But even then, I don’t see the point unless there’s a strong connection with the former product.

  4. He complains about Cobalt prices, but batteries are already dropping Cobalt in their formulations.
    Lithium Ferrous (Iron) Phosphate (LiFePo4 or LFP)
    Lithium Titanate (Li4Ti5O12 or LTO)

    100kwhT-200 kwh is a massive range and only the electric Hummer has a 200kwh battery that I can think of. 100Kwh in a Model S and 131 kwh for the big battery lightning.

    I think the biggest problem for EVs in the US is that people are convinced they need giant vehicles and they go on no stop road trips every day.

    1. “people are convinced they […] go on no stop road trips every day”

      This strawman needs to go away. It’s really easy to win this argument, but it’s made up. Nobody thinks they need to go on road trips every day.

      It is absolutely a fact that a low-range EV is good for 70-90% of what a person might do with their vehicle, and if you think the problem is that people think they’re going on a long trip every day then you have absolutely won the pretend argument.

      The real problem is that people want/need a vehicle that can handle 100% of their needs. Not 90%. If you can only afford / have space to park one car, it doesn’t matter if it works for you 320 days of the year. Those other 45 days, you’re fucked. (“But you can rent a car for the other 10%!”… OK. Add that cost and inconvenience to the price of the BEV before comparing.)

      This is why Plug-in Hybrids are the answer (and the eventual future). We just need the damned BEV-or-bust zealots to chill a little.

    2. Do you only buy a vehicle for what you need it for every day?

      I don’t road trip every day, but I need a vehicle capable of doing so.

      I don’t haul things in a truck bed or tow every day, but I need a vehicle capable of doing so.

      I don’t drive on the track every day either, but I enjoy owning a vehicle that’s capable of doing so.

  5. Correction, CR-V starts with the EX, not the Sport (which is hybrid only), but point still stands that the price is up. CR-V differs a little in that the Sport runs sort of in tandem with the EX rather than below it like it does on most other models.

    Canada still gets an LX CR-V, and it looks like they still get an LX Civic too. Theoretically it’s easy to Honda to bring back down the line if they wish.

    HR-V even with the upmarket push still has the LX and is now the cheapest new Honda you can buy, actually…

  6. “Bloomberg reports that Stellantis is thinking of pulling out of Chinese manufacturing altogether. It’s not a surprising move considering the failure of Stellantis’ Jeep joint venture earlier this year, and there is some sound reasoning behind it.”

    And some additional background which isn’t covered here or in the Bloomberg article. Know how FCAtlantis has been having absolutely NIGHTMARES with parts backordering? Part of that has been Chinese suppliers producing unusable junk parts, and some have just up and quit making their parts. And not even remotely strictly due to COVID either. They just up and say “we got more money from X, fuck you.”
    And because they’re in China? Let me explain the legal system in China for you: (insert a drawing of random circles as done by someone with severe tremors and no idea what a circle is here.) Which is to say: even if you can manage to find the correct court, and an actual law to cite, if you are not the Chinese government, then fuck you anyways.

    On top of this, the Chinese government is increasingly putting it’s thumb on the scales to favor domestics over internationals. Both legally and illegally (IP theft is still wildly rampant to say the least.) They are making it harder or outright impossible for foreign companies to compete or even operate in some cases. This has been going on for several years now; there was probably hope that it was just a blip, but it’s clearly not. (See also Buick’s catastrophically dropping sales.)
    Also remember that they can’t legally operate unless agents designated by the Chinese government own a controlling (50%) stake. Without that, they cannot legally exist much less sell cars in China. FCAtlantis’ babysitter is Dongfeng and GAC.

    It’s just not financially viable or strategically sensible for non-Chinese manufacturers to stick it out in China.

    “For those keeping track, that’s $2,100 more than the 2022 LX trim cost, and equipment upgrades aren’t exactly grand. While 18-inch wheels, smart key entry, and an eight-speaker stereo are big highlights, that’s about it aside from paddle shifters, sport mode, and some cosmetic bits. While the new Civic is brilliant, it’s just not great value compared to the rest of the compact car field.”

    “bUt InFlAtIoN!! iT’s NoT uS iT’s tHe EcOnOmY!!”

    Honda’s net profits for 2021 increased by over 7% last year when sales were still down over 8% from the preceding year.
    It’s not inflation. It’s not the economy.
    It’s just pure profiteering.

    “Think of all the dead brands scattered about the corridors of automotive history, wouldn’t some of them make great EV sub-brands? I’m wondering which dead brand you’d bring back for EVs and why.”

    American Electric.
    No, seriously. It was a real marque from 1913 till 1914, the combined efforts of Argo Electric, Borland Electric, and Broc Electric.

  7. I think the folks talking about EV price parity forgot that increasing demand would put pressure on the commodity prices for everything in the battery.

    Still, increasing prices will cause investment in new resource development, so I think it will eventually happen. But instead of projected parity in 2025 it might be 2030 or 2035, depending on how eager governments are to exploit these resources and fast-track approvals.

  8. I don’t necessarily think brands need EV sub-brands, but Scion and Saturn would probably be good. If someone has the rights to well-known classic brands and the willingness to emulate the styles on their skateboard platform, Studebaker or the like might sell well.

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