Today’s developments surrounding EVs are not a surprise. They were predictable, an awakening of sorts, to the realities of personal mobility needs and the true desires of a driving public amid a significant and sustained push toward electrification.
Unsold inventories of battery EVs at dealer lots, significant price cuts to move metal, and a rethinking of strategies are just part of today’s electric vehicle universe. We are seeing this new reality across the automotive spectrum as companies previously committed to being “all-in” for EVs – from Ford and GM to Volkswagen and Volvo – reassess the way forward.
Yes, interest in battery electric vehicles has grown substantially in recent years. EV sales have captured a larger slice of the new car market than might have been imagined in just the recent past and that percentage has been growing faster than before. This should rightfully be celebrated by EV enthusiasts. An impressive expansion of the zero-emission EV market should also be celebrated because of the considerable impact this has on decreasing carbon emissions, though it’s becoming increasingly clear that the hoped-for wholesale move toward battery EVs will not resolve our carbon challenges.
After more than three decades of documenting the commercialization of electric vehicles, I feel compelled to point out that EVs still represent a fraction of the overall automotive market and there remains great interest in more familiar options. Battery electric vehicles simply do not meet everyone's needs at this time. Barring significant breakthroughs in technology, cost, and convenience – the latter bolstered by an expansive and reliable national charging network and a resilient electrical grid to support it – there’s a possibility they may not meet all motorists’ needs for some years in the future. To our collective detriment, that has not stopped the powers-that-be from forcing an EV-first agenda.
Force-Feeding EVs Chokes the Market
The assumption that government can severely restrict consumer vehicle choices without alienating huge numbers of car buyers, creating financial havoc and uncertainties within the auto industry, and bringing an array of unintended consequences in coming years is simply an act of hubris. I've witnessed other examples of this over the years. Ultimately, the outcomes have not favored those in power who overstep and assume they know more about the needs and desires of car buyers than buyers themselves.
There are many reasons for this, but fundamentally let’s remember that a motor vehicle – beyond serving as a social conveyance for projecting image, status, values, or nuances of all sorts – is a crucial tool to get folks safely and reliably to work, school, the market, or wherever they need to be, regardless of distance or driving conditions. And lest we forget, a new car typically represents the second largest consumer purchase after a home. That makes buying a car an important financial decision beyond just being a very personal choice.
The battery EV’s rather eye-opening depreciation, identified by car search engine and research firm iSeeCars as averaging 49.1 percent over the first five years, isn’t very comforting from the standpoint of a financial strategy. It’s worth noting that iSeeCars doesn't see this same kind of depreciation across the board for electrification, identifying hybrids as having a nearly 12 percentage point advantage over EVs in value retention over a five year period, slightly better than the depreciation rate for all types of cars.
Analysis from a Dozen Years Back
How much has changed for electric cars over the years? A lot…and too little. To share some perspective, I’d like to offer up a Green Car Journal editorial I wrote in 2012, Curb Your (EV) Enthusiasm. It seems prescient today. In it, a dozen years ago, I pointed out that:
– After decades of battery development, the expectation that battery breakthroughs would come to make EVs cost competitive with internal combustion vehicles had not materialized.
– Battery electric cars still required significant federal subsidies to encourage sales because of their high battery cost and retail price.
– In a normal world, a compact electric SUV should not cost $50,000, a four-door electric sedan $40,000, or a small electric hatchback over $30,000.
– A small number of electric vehicles might be available under $30,000, but comparable internal combustion models would typically be priced many thousands of dollars less while offering greater functionality.
– Government agencies viewed EVs as a panacea for decreasing CO2 emissions, improving air pollution, and enhancing energy security.
- States embraced electric vehicles in their State Implementation Plans as a strategy for showing how they would meet air quality standards mandated by the Clean Air Act.
– Automakers recognized electric propulsion as a strategy for meeting increasingly higher fleet fuel economy targets.
– Electric utilities viewed EVs as a pathway to selling electricity as a motor fuel.
Battery EVs are One Part of the Solution
The conclusion about the way forward a dozen years ago? Battery electric vehicles are one part of the solution along with advanced combustion vehicles, hybrids, plug-in hybrids, and extended-range electric vehicles that create on-board electricity to provide full functionality.
It appears there’s a growing consensus today that we’ve come full circle to this way of thinking. As electric vehicle sales cool, multiple automakers have shared they are backing off from previously-announced timelines for EV model introductions, new EV assembly lines, and greenfield battery plants. There’s also a new emphasis on producing an expanding lineup of hybrid and plug-in hybrid models that consumers increasingly desire, even on the part of major automakers that have previously announced plans to exclusively build battery electric vehicles and have shown little interest in hybrid power.
All this underscores that as much as we’re enamored with modern battery electric vehicles and their ability to address carbon emissions, they are not the singular answer to future mobility. They are a choice among other vehicles and technologies that also speak to individual needs, desires, and environmental sensibilities. And that’s the way it should be.