The concept that Americans would suddenly buy more electric cars on a steepening curve was one that made little sense when considered alongside the realistic limits on EV ownership. This problem was made worse by the hype, which encouraged automakers to launch a bunch of overlapping models. It’s a water-water-everywhere situation, with a market that’s been flooded by electric cars that few people want to drink/buy. At the same time, there’s surprisingly little choice in the electric car space.
AAA released another annual survey of buyers, and fewer people are interested in electric cars than at any point in the last few years. Some of the reasons why are entirely reasonable, though the biggest concern doesn’t make as much sense to me.
Would you like a hybrid? The Morning Dump will continue to bang the hybrid drum. Both the specter of tariffs and the desirability of hybrid vehicles have propelled Hyundai and Kia to a strong May. You know who did even better? Ford! Ford sales were up massively year-over-year. Will tariffs imperil those gains? Will Ford shy away from electric vehicles? Maybe. The company’s Vice Chairman John Lawler gave a long interview last week and he says the company has a plan for both.
The ascendency of YouTubers continues, this time with a rumor that a certain YouTube celebrity might go racing full-time for the potential RAM return to NASCAR. That would be cool.
62% Of Americans Are Worried About High Battery Repair Costs
There are so many practical reasons why many Americans would not want to own an electric car, but battery repair costs aren’t something that I considered to be a huge issue. Is it expensive to replace a battery pack? Absolutely. Is it something most EV purchasers will have to do frequently? Probably not.
AAA is out with its latest survey measuring EV purchasing intent, and the interest in buying new electric cars is starting to fall as consumers take a look at what’s actually available for purchase. This is a bad sign for EVs. Usually, when more car models in a particular class hit the market, it’s a sign that demand is rising quickly. While it’s possible more EVs are sold again this year, it’s not likely to be a huge increase unless gas prices rise dramatically.
According to AAA’s survey, only 16% of potential consumers are either “likely” or “very likely” to purchase an EV, the lowest rate since 2019. Maybe equally as bad, 63% of respondents now say they’re either “unlikely” or “very unlikely” to buy an electric car.
What’s going on?
High battery repair costs (62%) and purchase price (59%) are cited as key barriers to go fully electric. Other top concerns identified in this year’s survey were the perceived unsuitability of EVs for long-distance travel (57%), a lack of convenient public charging stations (56%), and fear of running out of charge while driving (55%). Thirty-one percent of those undecided or unlikely to buy an EV have safety concerns, 27 percent reported challenges installing charging stations at their residences, and 12% cited the potential reduction or elimination of tax credits and rebates.
A few things to digest here, and most of them make sense to me.
Electric cars are too expensive. With few exceptions, hybrid or gas cars are generally more affordable than their EV counterparts. Some of this is the underlying costs associated with the development of completely new types of automobiles and battery material/construction costs. A lot of this is the industry’s fault. Rather than focus on offering affordable EVs, car companies clearly hoped to be able to more quickly amortize the development of EVs by appealing to the market that Tesla created. This was the wrong approach.
There are too many expensive two- and three-row crossover premium SUVs and not enough small, affordable electric cars. The success of the Honda Prologue and Chevy Equinox EV, to me, shows that there are customers at the right price point.
All the range-related concerns are legitimate as well. Public charging has gotten much better, and fast-charging has dramatically improved in just the last 18 months. While most people don’t regularly take long road trips, Americans hate to compromise on capability. It’s why so many people own trucks and rarely carry out tasks that couldn’t just as easily be accomplished with a Corolla.
I’d love to have an electric car, and I think roughly half the market could switch over to EVs and be quite happy. The inability to charge at home is real, though, and I live in a place where I cannot easily charge overnight. For me, that’s basically a deal-breaker.
Car battery replacement? It’s strange to me that this is the biggest issue. Yes, a battery pack is usually the single most expensive part of an electric car, but so is an engine. While early electric cars did have battery pack degradation issues, many owners got free batteries under extended warranties. With smarter charging protocols and improved battery health monitoring, it seems like batteries are keeping a decent percentage of their total range as they age. For instance, Recurrent says only about 1.5% of EVs they monitor have needed a replacement:
Car batteries are the same sort of battery as those found in your phone or laptop, but they are designed, built, and maintained so that they last. We generally see 1-2% range degradation per year, with slightly faster degradation over the first 50,000 miles as the car settles into its long term state.
Even at the more extreme 2% end of the spectrum, that’s a vehicle with 80% of its capacity after 10 years.
The other irony of electric car demand is that the more people buy electric cars and hybrids, the lower the demand for gasoline. The lower the demand for gasoline, historically, the lower the prices. The lower gasoline prices get, the less attractive EVs and hybrids seem to people.
Ford Sales Up 16.3%, Hyundai/Kia Up As May Was Another Strong Month For Car Sales
I was all ready to write about how Hyundai and Kia continue to have strong months by selling affordable cars with a mix of powertrains (ICE, EV, BEV, PHEV), and then Ford plopped a huge number on the table. This May, Ford’s sales increased by a whopping 16.3% compared to last May.
What moved? The full roll-out of the F-150 certainly helped, with an improvement of 14.9% compared to last May (or more than 10,000 more trucks). Ford continues to sell Broncos at a rate that implies the purchase of one of the SUVs will make all the hair relocate from your lower torso back up to the top of your head. The new Expedition and redesigned Ranger helped, also.
Hybrids? Yup. Hybrids are still popular, with sales up 28.9% year-over-year, presumably led by the Escape, Maverick, and F-150 hybrids. Electric cars are mostly down, although the Mach-E had another good month. The Lincoln brand continues to grow as well, jumping by 39% thanks to a new Navigator (that frankly looks amazing).
This isn’t to slight Kia. The brand was already high-fiving angels last year, and this May’s increase of 5% is as much a measure of the current product mix as the ongoing popularity of the brand. Personally, I would credit the success of the Carnival Hybrid for all of the brand’s growth, but it’s the attractive and reasonably priced K5 that makes up most of the increase. The EV9 took a massive hit from 2200 vehicles to just… 37. Why? The guess around here is that the switchover from CCS to NACS charging ports might be a part of the delay, especially since the SUV is built in the United States.
Hyundai was also up, and the single biggest sales winner was the Hyundai Venue. Sales for the affordable little Hyundai were up 74% year-over-year, which makes sense as it’s one of the cheapest cars for sale right now (about $23k out the door).
Is there a tariff impact? Probably. Ford has been doing employee pricing alongside Stellantis, trying to quickly move cars that are not impacted by the tariffs as it hopes to make up some market share. Will this negatively impact the company’s bottom line, though? I think so. Ford’s Q1 revenue dropped about 5% while its net income dropped from $1.3 billion to just $500 million. Obviously, May sales are in Q2, but heavy discounting doesn’t usually correspond with an increase in margin.
Eventually, though, all of these companies will face varying tariff impacts. Buyers, being thoughtful, are rushing to get deals before cars get potentially a lot more expensive.
Hyundai and Kia kept prices static in May as well, but we’ll see what happens later this month.
Ford Thinks It Has An Idea Of How To Lessen Tariff Impacts
Of all the automakers selling cars in the United States with any volume, Ford is probably the best positioned to weather tariffs. About 80% of the cars it sells in the United States are built here, and more are built within the USMCA zone. Still, the company today said it expects a $1.5 billion earnings decline due to tariffs and suspended its own guidance for the year.
Vice Chairman of the company John Lawler talked to analyst Daniel Roeska at a conference, and I thought this was interesting, via the Detroit Free Press:
“We’re continuing to leverage our competitive advantage in our footprint to try to identify opportunities for us over the next 12 to 24 months where we can take advantage of the shifting environment,” Lawler said.
Lawler did not provide specifics on what Ford is doing to leverage its competitive advantage, but when asked whether he believed Ford could take action that would reduce the impact tariffs will have on the company’s costs, Lawler said yes.
“Part of that is when you look at the parts, pushing more of those parts to be USMCA-compliant, that’s a tack that we can take,” Lawler said. “We can onshore parts that aren’t onshored today, although a large percentage of our parts are. So those are different tactics that we can take working with the supply base to minimize some of that impact.”
The USMCA compliance issue is interesting. One of the positive outcomes of the United States-Mexico-Canada Agreement was that for a company to be USMCA compliant, it had to meet certain labor standards, which is an especially important detail with regard to Mexican production. Raising the conditions and costs of labor in Mexico is good for Mexico and good for American workers, as it makes it harder to undercut them on price.
There was also some talk of “top line” adjustments, so expect some price increases as well.
And what of EVs?
Lawler said Ford’s long-term views on EVs has not changed despite any of those possibilities. He said the demand for EVs has softened in the past 12 to 18 months and Ford, along with the rest of the industry, has adjusted to that by reducing the cash it invests in EV development.
Something is brewing in California, and we’ll see it eventually.
Cleetus McFarland To NASCAR Trucks?
YouTube star/internet weirdo (in a good way) Cleetus McFarland already made quite the splash in the ARCA series, which is a first step towards NASCAR for many drivers. With rumors of RAM returning to NASCAR trucks, is it possible that McFarland could be one of the drivers?
According to Sports Business Journal, it’s not that crazy of an idea:
While McFarland has yet to detail his plans for next year, people familiar with the new Ram team’s plans have identified him as one of the potential drivers, suggesting he could graduate to the sport’s third division next year. A document viewed by SBJ listed McFarland as one of the names slated to be part of the program as a driver and brand ambassador. It was unclear if the document was final, and it’s possible that McFarland’s plans could change. It was unclear whether he’d run partially or full time. Nonetheless, the team is expected to lean on celebrity partnerships and potentially ownership to grow its presence quickly.
I mean… hell yeah!
What I’m Listening To While Writing TMD
I love Blondie. Just the way Debbie Harry says “Wall” and “Hall” in the first 20 seconds of this song is insane. It’s so New Jersey, and I absolutely love it. I can’t believe I missed the Talking Heads-Television-Blondie era of CBGB. Also, can you believe that “Heart of Glass” was only like the 5th single released from this album? Crazy. Also, this song was originally recorded by the Nerves, but I can’t imagine it without the Jersey girl accent.
The Big Question
Do you worry about battery degradation?
Top photo: Tesla/Duracell
As long as I work remote, I don’t need a commuter car, and the cars I do have are holding up just fine. Why buy an electric car now while they’re still improving with regularity? If I buy anything it’ll be a “last of the gassers,” because there’s supposedly still a point at which I won’t be able to buy a new one.
Is there a good way for used buyers to access the condition of an EV battery?
It depends on the car. There are some apps that work with OBD readers for specific cars. Some BMW’s can read the health of the battery through some secret menus that can be accessed with special button presses and holds. Some require a dealer. Most of the time it’s about balance of cell voltage and noticing if any cells are low. It’s really vehicle dependent.
As a owner of a MY13 Volt, a little, but more because i’m not sure when a new batt replacement would be due. I bought it for $10k with 95k miles in 2018. I’m driving the wheels off this baby so we’ll see where this gets in age and milage (210k miles rn). It’s definitely had a reduction of ~15-30% range since I’ve owned it.
Depending on the chemistry, there’s studies that say no chemical damage, minimal physical changes (crack formation, dendrite formation) as the Cells age. 50% State of Health (SOH), might start showing signs of wear. With the assumed 1-2% degradation per year, 50% SOH would take 25 years, double if it’s a typical use case.
Regarding new vehicle batt degradation? No. Not at all. I know for a fact an EV will last greater than 15 years of typical use. There’s plenty of anecdotal evidence of that in the Volt sphere. Even some Tesla Roadsters from 2008 are still rocking their original battery packs. There’s only going to be more data going forward backing up that claim.
Fuel cost is just one factor in ownership. Electric cars by design require less maintenance than ICE vehicles which is why dealers are not too keen on electric cars as they make their money on service, not car sales.
Do I worry about battery degradation? Not so much degradation, but just failure. I sold my Gen 1 Volt just before it was 8 years old, because if there’s a failure in the pack, the car just becomes unusable, even though it has a gas engine. Yeah, it’s a really good chance it was going to be fine for a long time (it was such a great car!), but also, there’s a risk that your car is going to go from having a value of over $10,000 to scrap value overnight with no warning. I still bought another used PHEV, but I probably won’t keep it past that 8 year mark either, because I don’t know that I want it after the battery warranty is up. My parents traded in their CT6 PHEV at the 8 year mark for the same reason.
I don’t see this being any different than the risk of a high-mileage ICE car blowing the engine. If it happens, the car will be nearly worthless, and getting it replaced will likely cost more than the car is worth.
I guess, but I could do an engine swap myself if I had to and get an engine for far less than the cost of a battery pack. I also currently have some 15-20 year old cars that run great, but I’m not sure an EV is going to make it to 20 years old on the original battery pack. I agree it’s not a lot more risky, but I think on a percentage basis, it it more risky than an ICE experiencing total failure.
The best thing that the car companies could do is come out and guarantee support for the batteries for a decently long period and try to cap some of the prices. When I sold my 2014 Volt back in 2021 there were already no new battery packs available or being made for them, and all the replacements were “refurbished”.
True, but I’m thinking more about the average consumer who would need to have someone else swap the engine. They’d be out at least $5k (likely more for many modern cars), and nine times out of ten, they’d replace the car instead. My personal solution is to lease my EVs. I don’t want any new car for more than a few years anyway, ICE or EV.
I’ll keep my 20-year-old F150 and my Fairlane on the road forever, but they’re simple enough to do that. Most new cars, not so much.
Yep, if I needed new, I’d lease for sure for an EV. I like buying the PHEV’s used, coming off a 2 or 3 year lease, and sell them around year 8.
The recent CARB waiver that the Congress voted to kill required PHEVs and BEVs to have a 15 year battery warranty with 70% of original capacity.
The courts will decide if the rule stands or not but that is where the industry is moving.
I just finished a 2100 mile road trip in a ’19 Bolt. Road trip rules include no interstate highways, so it’s sort of cheating I guess. We use hotels with charging (free charging at hotels isn’t as common as it used to be) and try to plan attractions within about 4-5 hours drive from one another. An earlier trip covered a different 2200 miles the same way. It works really well for us at our leisurely pace and we averaged 4.3 miles/kWh.
On the other hand, if I had to cannonball from, say, Detroit Michigan to Los Angeles California I would probably be very frustrated with lengthy stops for recharging, especially with the Bolts 50Kw max charge rate.
But for in-town use – commuting, errands, entertainment, shuttling our platypus around the Tri State Area – there’s nothing better for me and I won’t go back to gas unless there is no choice.
Hey, where’s perry?
I’m here! Oh yeah, my screen name doesn’t include my first name. Oh well, you’ll have to trust me on that, and that we want YOU for the Agency!
“…shuffling my platypus around…” is a keeper, thanks and thanks for that image.
I will probably get an EV in a couple years as a daily driver but I will still have a gas or hybrid as a second car. I love taking 4 day weekends which require driving from Texas on a Thursday after work to some place 5 to 6 hours away. Then drive the rest of the way on Friday morning. When I come back home on Monday, I drive all 12 to 15 hours straight. I do these types of trips every 2 months to Colorado, New Mexico, or Arizona so it’s not ideal for an EV. There are times when I’ve been worried about running out of gas in some stretches so I wouldn’t dare do it in an EV. Just 2 weeks ago, I caught a flat on the way to Keystone, CO and then almost ran out of gas because I assumed there would be a gas station within 40 miles (basically made it on fumes).