Automakers may have completely overestimated how many people want electric cars.

[balthazar]

What I've been saying here probably over a year's time now. The numbers aren't adding up.

• https://finance.yahoo.com/news/automakers-may-completely-overestimated-many-211928833.html •

 

Quote

Tesla was right. The electric-car maker proved that hundreds of thousands of people will buy sleek, luxury electric cars over models from BMW to Mercedes. As the legacy brands’ market shares have slipped amid the electric onslaught, automakers are making massive investments in the electric future. Volkswagen has its $50 billion EV push. Daimler just placed a $23 billion battery order for EVs.  GM and Ford are both undergoing massive restructuring to keep pace.

While the transition to electric vehicles is virtually certain, the timing is anyone's guess.  Plug-in electric cars still represent just under 2% of the US market, and 2.2% worldwide.  Despite exponential growth, with a record 2 million or so EVs sold worldwide last year, only one in 250 cars on the road is electric. Only Norway, which has lavished subsidies and perks on EVs, has seen the EV share of new car sales rise to around 30%.

The consulting firm Deloitte studied the dilemma this presents for the auto industry. How fast can carmakers invest in new electric technology while generating profits to make the transition? The firm expects 21 million battery electric vehicles to roll off assembly lines over the next decade as EV prices fall below comparable gasoline and diesel models by 2024.

But the rush to expand EV manufacturing capacity is predicted to produce a glut of EVs, undermining automakers’ bottom lines. “Our projections suggest that supply will vastly outweigh consumer demand by approximately 14 million units over the next decade,” states Deloitte. With every major manufacturer intending to mass-produce EVs, alongside more than a dozen new carmakers around the world, “Deloitte’s research suggests that the number of manufacturers is unsustainable.”

 

David Keith, an engineer and professor at the MIT Sloan School of Management, says it’s possible the appeal of EVs won’t spread fast enough beyond “techies and greenies” who fueled the early days of the market. “Arguably, for most consumers in the US today, there’s not a problem that an EV solves for them,” says Keith. He predicted EVs could struggle to break 5% of the US market in the near future.

Sven Beiker, a former BMW engineer who now runs the consulting firm Silicon Valley Mobility, shared those concerns. Even as prices come down, crucial government subsidies for EVs will phase out for Ford, Nissan, GM, and Tesla. That could deter price-sensitive buyers. “Tesla is impressive,” Beiker said. “The Model 3 is at the top of the list for 2018 car sales. But the question is to what extent that is because it is an EV and to what extent that is because it is a cool and new car?”

 

Of course, China and Europe, wielding legislative mandates and generous subsidies, are powering ahead with EV adoption. Fossil-fuel vehicles may have already peaked in China (where carbon-free vehicles already represent 4% of total sales) and diesel-loving Volkswagen now plans for a quarter of its cars to be electric by 2025. Unless the US follows suit, it may not be enough to absorb the wave of new EVs that’s cresting.

 

~ Michael J. Coren

Quartz
January 25, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Edited January 27, 2019 by balthazar

[A Horse With No Name]

I agree. Same thing happened with hybrids. Only a major oil shock will change that.

[ocnblu]

Of course, the article is spot-on.  Those who come here on a regular basis may have heard me say something to this effect, a time or two.  Or three.  Or 300.  ?

[oldshurst442]

I think its just an opinion piece like every other...

EVs could very well be selling because its the "cool" thing to have. 

The Chevy Bolts are doing quite well in the market place, but not as well as  their "cooler" brethren, the Tesla Model 3. 

Why is that?

a) is it because the Model 3 is cooler than the Bolt?

or

b) is it because the Model 3 is actually easier to live with as its a bigger car/appliance.  

Notice I said appliance as we really do not know if EVs are considered appliances yet as how Toyota Corollas are perceived or just because the Model 3 as a car and sedan does a better job of hauling than the Bolt does. 

We already do know that Tesla DOES have that cool factor.  

We will find out soon enough when all these EVs from these several brands come strolling in and then we will see what the market place says and does.

I do know why though, all these manufacturers are building all these EVs.  So they dont miss out on the next big thing. So they dont get caught with their pants down.

Throughout Detroit History, this is a common theme amongst automakers.  They dont want to be the one to lag on a hot market and they want to be first to offer a product in that new hot market because the one that enters that market first is usually the one to get all the recognition and benefits. 

The Ford Mustang and the Chrysler Minivan come to mind.  These two products  still reap the benefits of being the first ones . I know of several other models but I currently do not remember which ones and I do not know right now where to start to get info to  mention more models.  Bummer!   I got another, the Corvette.  

 But there have been failures too.  Ford, when they heard that Chevrolet might do a midengined  Corvette in the 1970s, Ford rushed the Pantera just to be the first one to market a domestic, mass produced midengined car.  (Because the GT40 was more of a British entry than it was an American one, and it was only a race car at that with a limited production run) 

But yeah, I gather its the fear of being left out that is driving this need for EVs more so than the actual market place. 

I still feel that the switch to EVs will happen sooner than most, because I feel that the want for EVs is there. Its just that the RIGHT TYPE of EV has not been given to the people yet.  The Bolt and the Leaf are not exactly prom King and Queen here. And some of their hauling capabilities (interior qualities for hauling) as cars are not exactly ideal...

The Golf EV is too expensive within comparison to its gasoline and Diesel brother. And so on and so on.