I had a long conversation yesterday with David about the sudden-but-expected departure of Volkswagen’s North American CEO. The slowing of the electric car market is causing all sorts of problems for automakers, and I’m not convinced that any 2nd generation electric car that’s not a Tesla is going to be that competitive outside of China. There’s one car I’m into, though, and I think it could be a model for other automakers.
Obviously, Renault doesn’t sell cars here, and the company’s relationship with Nissan is a little iffy so it’s not an obvious next step for the Japanese automaker to sell one of its products here as a rebadged Renault. An Alpine? Maybe. In the interim, I think the new Renault 5 E-Tech gives a great concept for what a “3rd generation” electric car could do to be successful. Ahem, are you paying attention Ford? If anyone at Ford is reading this installment of The Morning Dump please tell us all of your product plans in the comments.
VW’s Pablo Di Si is probably paying attention, though it’s going to be from the sidelines as he’s quickly left Volkswagen amid reports that none of his bosses wanted him there. And speaking of unwanted, VinFast has a new car they’re delivering in California.
And, finally, a quick look at the battery mix that some are predicting for 2030. Spoiler alert: it looks like today’s battery mix.
This Is A Sub-$30k Electric Car And It Seems Just Right
I’m not sure there’s a perfect consensus on what constitutes different generations of electric cars, but when I think of EVs outside of China I divide it this way:
- PROGENITORS: All the small production electric vehicles stretching from the CitiCar to the original Tesla Roadster, including the Nissan Altra EV, GM EV-1, and Ford Ecostar.
- 1ST GEN: These are the early attempts at EVs encompassing the successful Tesla Model S and Nissan Leaf, as well as less successful compliance offerings like the RAV4 EV and B-Class EV.
- 2nd GEN: These are mass-market cars that started with the Tesla Model 3 and now cover almost all of the existing market. They have either LFP or various NCM chemistry batteries, a minimum of 200 miles of range in non-city car applications, and cost more than a comparably sized ICE-powered car or SUV. If they’re sold by a typical OEM they can be found on dealer lots next to comparable ICE-powered cars in the same brand (Equinox EV/Equinox, Blazer/Blazer EV, et cetera)
- 3rd GEN: Not for sale in the United States currently, these are mass-produced vehicles that cost the same or less than comparable ICE vehicles. The range is at least 300 miles for non-city cars and these vehicles are more likely to find grey space in a lineup or replace existing vehicles.
None of this is obvious, and there’s a lot of space in here for cars that bridge two of these generations. Could you argue that the Cadillac Celestiq, in its own unique space and price class, is a 3rd Gen product? You could, but I’d still say it’s 2nd Gen. The same probably goes for the new Chevy Bolt, although I’m open to that being an early 3rd Gen product depending on price/stats.
I say all of this because there are too many 2nd generation cars and not enough buyers. According to Cox Automotive, there were about 60 distinct electric models for sale in the first half of 2024, adding up to total sales of around 599,372 vehicles. That’s an improvement of 7.3% year-over-year, which is not nothing.
Tesla sales cover 304,451 vehicles of those, which is an improvement over last year for the rest of the market, but still means that Tesla still controls a huge part of the market. Subtracting Tesla’s five models, that’s about 50 cars all fighting for the rest of the pie (imagine half a pie cut up 50 ways). The most popular other vehicle in the first half of the year, adding up to 22,234 vehicles, was the money-losing Ford Mustang Mach-E. Put that next to the 198,030 Model Ys that Tesla sold in that same period and it’s not that impressive.
Even if the market continued to grow 10% year-over-year (it probably won’t) it’s just too many cars for not enough buyers.
It will require a 3rd Gen product to be competitive. I assumed, probably incorrectly, that the planned $25,000 Tesla Model 2 would be the original 3rd Gen car for sale. If Tesla CEO Elon Musk is correct then the existence of robotaxis like the Cybercab will change this calculus a bit and that’ll be the true 3rd gen car, but I’m skeptical that it’ll happen as quickly as Musk wants.
2024 Chevrolet Blazer EV RS. Photo: Chevrolet
My guess is that it might be Ford with its unnamed Skunk Works car line. These are sub-$25k vehicles that are supposed to be exciting and draw lessons from cars like the Xiaomi SU7. If there’s any inspiration to be taken from the present I don’t think you’ll beat Tesla by trying to copy Tesla (no one has, thus far). I think you need to do something different.
The Renault 5 E-Tech, with all of its quirky details, reasonable performance, good size, and extremely good looks might be a model. Renault is one of the few companies doing well in Europe and the 5 E-Tech has the makings of a hit. For one, its price is excellent. Order books open next month and the base 5 with a 40 kWh battery and a 190-mile WLTP range will cost just £22,995 after all taxes/feeds/delivery in England or a little under $30,000. Cars are more expensive in the UK, so to put that in perspective the cheapest Model Y for sale in the UK costs £39,990, or about $50,000. That’s a bigger car with more range, but that’s the point.
Even the smaller 2024 Fiat 500e is about £2,000 more expensive for a car with a comparable range. Even the top-of-the-line version with a range closer to 248 miles is just £28,995, which is still £10,000 less than a Model 3 and it looks way more interesting.
I think that’s the key. Again, you’re not going to out-Tesla Tesla and it’ll take you generations to even catch up. I guess you can argue that GM has begun to catch up with its Ultium-platform cars starting to break even, but the removal of the IRA tax credit might reverse that quickly. If the IRA does go away it’s an even bigger deal to have a cheaper, highly differentiated product. Pay attention Ford!
[Ed Note: I think a 190mi range small EV could be a tough volume-sell in the U.S. I’d make the Renault a bit bigger, keep the battery size at 40 kWh, and offer a small range extender for the range-anxious. -DT].
Volkswagen Group Of America CEO Replaced
If you read the Volkswagen press release about its new North American CEO you might assume that the old North American CEO made the choice to leave. In fact, that’s what it says:
The Volkswagen Group appoints Kjell Gruner as CEO of Volkswagen Group of America effective December 12. Gruner succeeds Pablo Di Si, who has stepped down from his position last week at his own request.
“At his request” is an interesting phrase, especially since we’ve known this was probably coming for weeks. Someone in the main office did all they could to make it clear that Di Si wasn’t long for this world, with quotes like the following from Der Spiegel:
More than a billion euros of expected earnings from North America will be missing by 2025, with Thomas Schäfer, the CEO of VW’s passenger car operations, having to scrounge up that money elsewhere. Chairman of the Board Oliver Blume, who declared success in North America to be a company priority, now has to begin looking around for a new executive for the region after just two years.
[…]
The new executive awakened expectations back in Wolfsburg that the pandemic-era profits would continue to pour in. A mistake. “You get such a job when you make big promises,” says a company executive who asked not to be identified. “And you lose it again because you are unable to fulfill them.”
As with Carlos Tavares at Stellantis, things were fine when the pandemic encouraged automakers to choose price over volume. Pretending that those billions would still be pouring into Europe makes no sense given that Volkswagen’s future was built on 2nd generation vehicles like the ID.4 that, ultimately, were not particularly competitive.
Di Si will be replaced by Kjell Gruner, who spent many years in the Volkswagen family at Porsche, including a stint as CEO of the brand’s American operations. What’s he been doing lately? Heading up sales at Rivian, which is interesting timing given VW’s even bigger investment in that company.
VinFast Delivers VF9 Electric Three-Row To… Someone
Amazingly, we did not get invited to the press launch of the three-row VinFast VF9. Could it be that our review of the VinFast VF8 basically told people to not buy one of the company’s cars until some basic issues were resolved? Maybe. It also might be that VinFast doesn’t seem to have given the car to any major outlets.
Oh well, the company has seemingly decided to skip the press and go straight for customers and delivered cars recently.
The first batch of customers received their VF 9s at VinFast’s North American headquarters in Los Angeles on Nov. 18. Following the eight initial deliveries, VinFast said the VF 9 is available at its 15 company-owned stores in California and 36 franchised dealerships in 15 other U.S. states.
The VF 9 was originally scheduled to launch in California last year after the two-row VF 8 crossover went on sale in March 2023. The VF 9 went on sale in Vietnam last year.
“VF 9 is one of the few seven-passenger, three-row electric car models on the market,” said Mike Nolte, vice president of sales at VinFast U.S. “We believe that the VF 9 will be the ideal vehicle for large families, delivering premium quality and a luxurious experience while maintaining excellent value.”
This is another 2nd Gen vehicle but, hey, maybe they’ll figure it out.
Battery Chemistry Should Be The Same For A While
I’ve been waiting for an updated forecast on battery cathode type all year… because I’m a nerd. It’s here! It’s here! It’s truly the best time of the year! Thank you S&P Global Mobility for this early Christmas present.
Right now the batteries used in electric cars can be easily divided by cathode chemistry (almost all batteries use graphite or a graphite silicon mix for the anode). Higher-performance, longer-range vehicles tend to use some kind of NCM-based lithium-ion battery, with NCM standing for Nickel, Cobalt, and Manganese. Lower-range, lower-priced cars, especially in China, use LFP batteries, with LFP standing for Lithium Iron Phosphate.
According to the forecast and the chart above it looks like that’ll stay mostly the case going into the future.
The report from S&P talks about the benefits of various chemistries, but what’s most interesting to me is the forecast for the ratio of NCM batteries, as they explain:
In the first applications of lithium-ion, the cathode chemistry choice was between lithium in combination with oxides of nickel, cobalt or manganese. Nickel was favored for its energy density, cobalt for its reversibility, and manganese for its safety. Now, in lithium-ion batteries of this type, a cathode combining all three in varying ratios — NCM — is favored because of the attribute trade-offs noted above.
Until relatively recently, the NCM ratio was mainly 1:1:1. However, with the desire to reduce cost and improve sustainability (due to environmental concerns over cobalt mining) and energy density, the nickel ratio has been increased to the point that NCM 811 (8:1:1) has reached near ubiquity in the NCM type. The graph below shows the market makeup and forecast for the various NCM combinations.
The NCM811 combination holds sway over the market and will progressively increase its share. The so-called NCM90+, NCMA and HV NCM60 chemistries are also of note. NCM90+ denotes cathodes where the cobalt and manganese content is cut further (typical ratios can be 9:0.5:0.5 hence the 0 in the nomenclature) to improve energy density. NCMA batteries take the basis of the NCM battery and add aluminum to the mix for greater energy density.
A lot of complaints regarding NCM batteries center around the mining of cobalt as well as the chemical separation of manganese, with the anti-EV crowd pointing out that neither is particularly good for the environment. Plus, a lot of cobalt mining is in the Democratic Republic of Congo.
Being able to dramatically reduce the amount of cobalt and manganese in batteries is a big deal, and it seems like that’s where we’re going.
What I’m Listening To While Writing TMD
There’s a great Robert Earl Keen joke about being a bull rider for 15 seconds stretched across five bulls at three seconds per bull. That’s roughly how long my tango career lasted. I was not good at tango. But I found the Gotan Project and got the chance to dance to “Santa Maria” and that’s a decent trade for all the embarrassment.
The Big Question
Do you like my EV generation breakdown? Do you see it a different way?
Gotan Project has been a permanent part of my playlist for quite some time now.
Even though it always sounds slick and smooth, it’s a great refreshment when overwhelmed with music that seems to have been endlessly focus-grouped and carefully factory-processed before release. (Like Bruno Mars, for example.)
Again, EV’s are total trash…I can’t believe how much time people waste talking about junk and driving appliances. I want a REAL car and will never get an ugly garbage EV.
Gasoline forever!
I like the breakdown but I would add that exiting the current stall requires an energy solution. The lower prices, the buttons, stalks and familiar design are all good, but they are incremental. A 50lbs battery cell (hydrogen?) that I can carry around and plug and twist in for another 800mi? Now that’s motivating to move to electric.
We have great progress so far in everything else (motors, electric buses, software, castings etc). We just need the goddamn portable arc reactor.
“A 50lbs battery cell (hydrogen?) that I can carry around and plug and twist in for another 800mi?”
Considering it currently takes 193 lbs of 35 gallon 10,000 psi tanks to contain enough hydrogen for half that range I think you’ve got a better shot at batteries.
I don’t follow: 1 gal of liquid hydrogen is about 0.6lbs. Are you including the weight of the pressurized storage here?
Yes.
Unless you know a weightless and volumeless way to store hydrogen the weight and bulk of the storage will also be part of the equation.
Voulme is not the issue – we’re still taking liquid gallons here. But that is what I said needs to be resolved before we enter something that makes sense and it is clearly better than an expensive car with built-in severe and fast depreciation. If I knew a way, I would sell it to Stark Industries.
Liquid or gas hydrogen has the same problems: its energy to volume ratio is terrible and its oft touted energy to weight advantage ignores the substantial weight of the hardware needed to keep it stored. Volume is an issue if you want range.
The only viable solution I know of is zeolite storage, an additive which effectively shrinks the “bubble” of hydrogen’s molecular electrons and allows for much tighter packing of the gas at much lower pressures. Those have been researched since at least the 1960s and AFAIK to date the problems remain the same, they require too much energy to release the hydrogen and/or they are only good for a handful of cycles. Given this I think batteries are far more likely to show progress than hydrogen.
Gen 1: Crap Era, everything pre roadster
Gen 2: Everything now
Gen 3: Toecutter Era, sub .2Cd fully repairable and swappable batteries <$25k.
I don’t want to own an EV as they are currently. I don’t like the idea of a battery that has a fixed lifespan. At the battery’s end of life, it’s just not worth it to pay to replace it with a new one, you’d just as well dump it and get another vehicle. To me right now, an EV only makes sense to lease.
The non-Tesla challengers should all get together and come up with a standard battery. Think of Ford, GM, VW, etc coming together and agreeing to a modular power unit that fits universally. When the day comes to replace, the swap becomes trivial and they’re widely available. If I know that my EV won’t become virtually worthless someday with a depleted battery then owning an EV becomes more compelling.
They’ll never do that.
Just chiming in to say you don’t have to replace with a new one. You can get used or refurbished packs for reasonable prices
Here is how I see the EV generations;
1st Generation – Low systems integrations, lots of wires and hoses connecting EV components. Most components do one job (coolant pump, onboard charger, DC to DC converter, etc). Also, no frunk. This is the Toyota BZ4X, GM EV1 and outgoing Chevy Bolt. These lose money for each vehicle sold. Manufacturer profitability is through subsidies, emissions credit sales and penalty avoidance.
2nd generation – Moderate systems integration. The components may get more integrated into modules especially with thermal management and power distribution. There are a lot fewer hoses and wires. A modest frunk may be present and vehicles may eek out a small profit. This is the entire Kia/Hyundai EV lineup.
3rd generation – High systems integration with one module doing many things. Few hoses and wires. A usable frunk is present and these are profitable vehicles. This was the Tesla Model Y at launch. It also means that a simple component failure can turn into high repair bills due to an entire module needing to be replaced instead of something simple like a valve, pump or HV contactor.
4th gen – Solid state batteries? Can seamlessly replace ICE cars for most users? Use of large castings for everything structural? Cheaper to build, buy and operate than ICE? Almost certainly to be a disposable and recyclable car.
I’ll take a #1 please, with a frunk.
If Vinfast can move quickly and address gaps and concerns, they may turn out to be a vastly underestimated and formidable entry already in the US market.