O come, all ye faithful, and get your hot car news from The Autopian because we’re not slacking off even though we’re only a few days from Christmas and a week from New Year’s Eve. Reading material for your morning constitutional today includes rare discounts on the Tesla Model 3 and Model Y, some bad end-of-year news for CarMax, and an update on solid-state batteries at BMW. Let’s ride.
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.
Merry Teslathon? Happy Tesla Days? A Tesla Decemba To Rememba?
Yeah, we need a better name for Tesla’s very rare end-of-year discount celebration, and I haven’t had enough coffee yet to figure it out. But if you’ve been eyeing a Tesla Model 3 or Model Y this month—or what’s left of this month, I suppose—you’re in luck.
Reuters reports Tesla is offering $7,500 discounts on both of its top-selling EVs this month. That’s an increase from the $3,750 credit Tesla was already offering on those cars. And as we reported yesterday, this new bigger discount comes just weeks before Tesla stands to get its full $7,500 federal EV tax credit back under new rules implemented by the Biden Administration’s Inflation Reduction Act.
(By the way, the new EV tax credit rules for 2023 are extremely confusing; Mercedes wrote a guide that may help you, and so did I; the always-great Consumer Reports has a useful one, too. The point is, forget what you think you’ve known over the past 10 years or so because the full tax credit is aimed at EVs built in North America now, and it gets even more complicated when we start talking about batteries.)
Why is Tesla doing this now, on Dec. 21? Reuters says it’s all about orders and showing those EOY sales/delivery figures; apparently “customers have canceled their orders and held off their purchases until the new credits take effect in January, weighing on Tesla demand.” That’s not going to look good when Tesla already said it would miss its delivery target this year. Basically, offering the $7,500 discount now instead of in January is a way to drive up those numbers a bit.
Here’s more, plus good news for our pals in Canada and China:
“The fact they seem to be cutting price to increase deliveries volumes doesn’t raise confidence, particularly at a time where we see increasing competition,” Craig Irwin, a senior analyst at ROTH Capital Partners, said.
The rare discounts follow a series of price hikes over the past couple of years by the automaker, which blamed supply chain disruption and inflation.
Tesla is also offering $5,000 credit in Canada on Model 3 and Model Y vehicles delivered before the end of the year. The U.S. automaker has also given a discount of 6,000 yuan ($860) on some models in China to the end of 2022.
Anyway, if you were going to buy a Tesla in January, you can do it now instead. Elon could use a little pick-me-up, I’m sure.
CarMax Is Far From Merry This Holiday Season
Photo credit CarMax
I’ll tell you who’s probably very eager for this year to be over: CarMax, everyone’s favorite supplier of unlimited-warranty Land Rovers. America’s entire supply of used cars has been utterly depleted by the supply chain issues that disrupted new car production, as well as rising interest rates and cuts in overall consumer spending.
As a result, CarMax’s quarterly profit is down 86% vs. the previous year. Woof. The company is now even pausing a share buyback
The Richmond, Va., used-car retailer said net profit for the three months ended Nov. 30 was $37.6 million, down from $269.4 million a year earlier.
Earnings were 24 cents a share, compared with $1.63 a share a year earlier. Analysts polled by FactSet were expecting adjusted earnings of 65 cents a share.
Revenue fell 23.7% to $6.51 billion from a year earlier. Analysts were expecting sales of $7.16 billion, according to FactSet.
Combined retail and wholesale unit sales fell by 28%. Retail used car unit sales fell 20.8%, with the company citing “vehicle affordability challenges” that weighed on consumers, who are already challenged by rampant inflation, rising interest rates and low confidence in the economy.
I say again: woof. And it’s hard to see any end in sight to this. My professional opinion remains that it’s kind of a garbage time to buy a car, even while some good deals are to be had here and there.
Solid-State Batteries V: The Phantom Pain
Photo credit BMW
Solid-state batteries—EV batteries that contain a solid material as an electrolyte inside the battery cell instead of the usual liquid—remain the White Whale of the car industry. If anyone’s able to deliver on them, they could in theory promise significantly greater energy density, faster charging times, less real estate in the car and fewer of those pesky fires. They have proven quite elusive to develop thus far.
The last time I talked to a top BMW engineer working on this technology, he said it’s at least 10 years away from viability, and any number of years after that from production and implementation at scale. But BMW and Ford are both invested in Colorado company Solid Power, hoping that company could be the one that makes the breakthrough.
Now, BMW says that it will produce Solid Power batteries on its own lines. Here’s Reuters once more via Automotive News:
Solid Power said it will offer some intellectual property rights related to its solid-state batteries to BMW and allow production of the battery cells at the automaker’s facilities in Germany.
Colorado-based Solid Power will license the cell design and manufacturing processes to BMW, which will pay the company $20 million through June 2024, subject to certain conditions.
BMW intends to duplicate Solid Power’s pilot production lines at its own plant in Germany and produce prototype cells based on Solid Power’s proprietary technology.
“Subject to certain conditions” means meeting certain performance development milestones, but basically if solid-state batteries from this company work out, BMW wants to be at the forefront. “We expect this agreement to accelerate the installation of our solid-state prototype line and our companies’ mutual goal of commercializing this promising cell technology,” BMW management board member Frank Weber said in a statement.
Remember, Henrik Fisker completely gave up on this stuff a year ago. Maybe BMW and Solid Power will have more luck.
Are you considering buying an EV next year? Or even before we close out 2022? What would you consider?
I would really love to (though I see myself running a gas car concurrently, at least for a while) but man, the costs are through the roof and the inventory is terrible.
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Top photo credit Tesla
I’m in for a plug in hybrid, if one ever becomes available.
I’m OK carrying just enough battery for a day, and an engine for longer drives and winter heat.
Just being associated with one of biggest billionaire douche-nozzles ever keeps me from ever considering a Tesla.
Regarding Tesla… sounds like great news! The availability is such that they are starting to offer discounts. I’m looking forward to cheaper BEVs in the future!
“Are you considering buying an EV next year?”
If my Honda Fit dies next year, then I’ll consider buying a BEV next year. But realistically, as much as I’d love to have a Tesla, they are over my budget… even the oldest and most used Tesla still costs more than CAD$30,000
Same deal with other *good* BEVs like the Chevy Bolt.
So my next car is likely to be either another Honda Fit or a regular non-plug-in hybrid.
But I think I will buy a BEV eventually… but probably closer to the end of the decade when they become much more common and much cheaper.
No thanks on the portable fire starters. Seems more EVs are catching on fire and even Calufornia is backing away from electricity generation from solar so expensive and erratic supply issues.
I am considering buying an EV in the coming year. It’s a hard sell to my wife who has become a three-pedal fanatic. We realize the next commuter is probably not going to have a clutch, and the top runners are the Prius Prime (when the new one comes out), or an Ioniq 5.
I’d feel fine with 300 miles of range. That would allow for even a slow, frozen crawl home. No need for a 5 minute charge. Typical commute is less than 60 miles a day. I’m pretty sure a wall outlet could top that up overnight. If I’m covering more than 300 miles in a day for work, I have more than 5 minutes worth of email / voicemail / texts to get caught up on. If I’m covering the distance on a personal road trip, I can kill more than 20 minutes in a truck stop. I love truck stops.