Tag Archives: Chrysler

Tesla Stock Down! Cheap Gas Kills EV Car Sales, or Does It?

Will lower gas prices have a large effect on EV sales?

To a certain extent but there is a way that car makers could diminish the cheap gas advantage.

The Tesla has never been a car whose sales have been driven by high fuel prices. It’s appeal has been in performance and technology as well as status and muted luxury.

Anybody who has driven an EV loves the real world acceleration. By real world I mean 0-30. The burst of energy to change lanes or get on the freeway.

The average car takes much longer from a full stop to 30 MPH than an EV. From 30-60 it’s about the same time but the gasoline car spend from 30-60 catching up.

0-60 in 4 seconds is nice but in an ICE car that requires tens of thousands of dollars and an average MPG of around 12 MPG everyday to do that the very fews times you need that power. You just don’t need or can’t really enjoy your 700HP vehicle as much as you would like to.

Your 2 seat loud and obnoxious sports cars are the proverbial 12 inch penis. Impressive looking but not to many places that can handle all of it.

The only place cars like those have any use other than getting you a superficial mate are on the track. And they are actually more likely to get you tickets than they are a mate if you are not that good looking anyway that you need to buy the car to have women look at you.

Add to that most people with cars like that never take them to a track like many Jeep or 4×4 owners never take them off road and you have probably explained why most Americans think they are broke and don’t like to pay taxes.

Car makers have to stop only building tiny compact EV’s as well. While they might get the job done they aren’t impressive at all, don’t tell me that size doesn’t matter. Small might be able to fit in any parking spot but only the city dweller sees that as an advantage.  We don’t live in Europe.

Most Americans don’t fit in a Smart EV or Fiat EV.  We are large people. Many of us are over 6 feet tall and many are over 200 pounds. Or both. We need cars we fit in.

In order to get more people into the cars they need to be real world cars. The e-Golf and Mercedes B-Class are a nice start but they are still too expensive for only having 80 miles of range.

The new cars being announced with 200 mile ranges will start selling if you really build enough and sell them outside of the few CARB States.

They will outsell the Chevy Volt which still isn’t a 5 passenger car. The rear leg room is still to small. And the battery down the middle is just as bad as the Ford and their batteries across the truck or cargo bay. They will not find many new buyers. They will just keep many of the buyers they have. Unless they change to a flat battery pack under the floor.

The greatest thing about owning an EV, or even a Hybrid,  is rarely or ever having to stop to buy gas. Even if the price of gas is $1 per gallon. The approximate equilibrium price of gas to electricity as fuel for cars.

It really is nice to come home at night and just plug in your car instead of having to wait in line and pump gas.

The worst part now about driving any car is filling up the gas tank. It’s rare that I ever get the gas station to myself. Then after waiting in line for 5-10 minutes, I have to get out, swipe my card and spend 5 minutes looking at the guy next to me that cut in front or committed some breach of gas station etiquette.

With an EV you just pull into the garage, plug in and walk into the house and go about your normal business. You wouldn’t even think of buying a phone where you had to go to the store and buy new batteries every few days. Then through the dead batteries on the street like the emissions form your tail pipe.

With the advent of the 100 mile plus battery, which is enough for most peoples daily commute, that will be shortly followed by the 200 mile battery, the plug it in at night car that can work for 100% of your daily driving needs will be all you really need.

Add to that, no more oil changes, tune ups and all those other regular maintenance items that an internal combustion engine car has and you will be hooked.

That doesn’t even included all the environmental benefits.

A 200 mile range, 5 seats and a price tag of $30k in a sporty car like a VW Golf or Kia Soul might just be what it takes to get this evolution in transportation to catch on.

It will be interesting to see how Tesla responds to these challengers that are now taking the 200 mile advantage away from Tesla.

I don’t think it will be long before my 12 year old son looks at driving a gasoline powered vehicle like he does someone smoking a cigarette. We know smoking is hazardous to your health and does cause cancer. The same thing is true of ICE vehicles.

We are just not willing to admit it yet as we love our cars.

The automakers are just starting to give us EV’s we can love.

Thanks Elon. You’re the guy who got this party started. Hopefully you keep leading the way and not letting the Big 3 kill the EV like G.M. did in the past.

I don’t think the big automakers are going to rest unless you stumble and fall.

I don’t think Apple and Google will really be a threat to the Big 3 like Tesla. For some reason you’ve got them really scared even though you only build less than 10’000 cars a month.

I might just have to buy Tesla stock now that it back down to the Moon instead of Mars, a place you want to go. Once the price comes back down to Earth people wont think your shooting for the stars.

 

 

 

 

Boy was I wrong says the USA Today

The other day I posted about how Americans wont be fooled again, buying gas guzzling SUV’s because fuel prices are at a relative historic low, as are wages.

But instead of being proven right I read an article just days later that we are not buying hybrids or high gas milage vehicles but once again the sales of SUV’s are on the rise in the  April 22 USA Today “Earth Day or not, hybrids take a hit”.

The article states that many electric or hybrid owners are less likely to trade their current vehicles in for another hybrid but would get an SUV instead.

The article goes on to say that “For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment,” says edmunds.com Director of Industry Analysis.

Although the impact on the environment does have a cost though we choose not to quantify it. It’s an unaccounted for externality that makes the Internal Combustion Engine (ICE) Vehicles look cheaper than they actually are.

I question who the sample size or who these vehicle owners are.  Just a look around the streets and highways of Phoenix, Arizona (where I live) you will see lots of hybrids. And many of those are older cars from the first generation Prius as well.

From the looks of things, hybrid owners don’t replace their cars that often. In the last year, as well, I have seen many new model (2014+) hybrids on the road. My mother just bought one, a 2015 Prius V. So in my opinion, any car company that forgoes hybrids and BEV’s or PHEV’s and builds lots of SUV’s is doomed to repeat the mistakes of the past that allowed Japanese car makers to take much of the US market share that they retain to this day.

As long as car makers let fuel prices decide what they build instead of sound long term strategies the shortsighted idea of current fuel prices staying low forever will lead car makers off the cliff of bankruptcy over and over.

Efficient cars should lead fuel prices lower instead of low fuel prices leading to cars that consume more fuel which has historically lead to higher fuel prices.

Innovation leads to success. Henry Ford was an auto industry innovator. Maybe the last one. Why? Because many of the innovations of the auto industry in the last 50 years were forced on them by regulation. Seat Belts, MPG requirements just to name a couple biggies. For the most part the auto industry is like your grand parents. Dragged into the next century kicking and screaming if they don’t die first.

The article also states that GM has temporarily halted production of the Volt. Well, considering they announced that next year they will have the Volt 2.0 that’s going to be significantly better, who’s going to pay full price for last years technology. They might as well keep dropping the price till the last buyer wants it so cheap it makes more sense to donate them to a charity for the tax break.

People who can pay full price for an iPhone don’t go running out once the timeframe for the new iPhone is near. Which is why Steve Jobs kept the next big thing a big secret till it was ready for sale.

And while car dealers give rebates and incentives on last years model all the time cars like the Volt will be much more sensitive to new model announcements. Many of the people buying these cars want the latest and greatest tech. This will also become more common on all cars as things like blind spot monitoring, adaptive cruise control and a host of many other technologies become more prevalent in cars of all trim levels.

The USA Today article also talks about dismal sales of Plug in Toyota hybrids being down 61%. That might have something to do with the fact that it’s hard to find one on a dealers lot if you don’t live in a CARB State.

Toyota only sold their Rav4 EV in California. Yet I personally know 3 people who bought one and brought it back to Arizona. They love that SUV. Even though it’s sort of a bastardized RAV4.

Honda only sold their Fit EV in AZ for a very short time and then only leased them. And then discontinued making then shortly there after.

I’m not sure car dealers like EV’s much, especially BEV’s as they require so little maintenance. A large profit center for dealers.

When I was car shopping with my mother earlier this year their were no plug in Prius’s to be found in Arizona. How can someone buy one when dealers don’t have them to sell?

And when I went shopping for my Ford Focus Electric (FFE), you couldn’t find any of those in Arizona either. At least  The dealers sold them all 20 minutes after they hit the lot. I had to go to California to buy mine. And the economics made sense. And they still make sense as gas prices are actually 15% higher than the day I bought it. The price of gas would have to go to 70 cents a gallon to equal the price of electricity per mile. And since most of the electricity produced at night is from nuclear the amount of carbon per mile is much lower.

The tags in AZ for the equivalent Ford Focus are $500 for the first year. The cost of the tags for my Focus, $60 for 5 years. Access to the HOV lane. I would say you can’t put a price on that but you actually can. There are people who can no longer get a HOV access plate with a new hybrid car who are leasing plates from prior Prius owners for $1000 per year.

If people are buying SUV’s and trading in their hybrids it has nothing to do with the economics. It has more to do with the emotions.

Hybrids for the most part are pretty boring and very utilitarian. The Toyota Prius does make a great Taxicab though. It has a very large back seat with lots of legroom.

The fact that hybrids are so boring is why Tesla is so successful. Their cars, while quite expensive are actually fun to drive. They don’t handle like a box truck. They aren’t the bottom of the line trim levels. But the VW Golf E, The Kia Soul E and Ford Focus E are actually very nice cars as well and at the top trim levels can be had for less than 30k after the tax credit.

Had Ford not dropped the price of the FFE to 32k and the dealer not also dropped another 2k off the price I would have probably bought a Volkswagen Golf Electric. Another car maker who chose to go top of the line trim instead of bottom of the line trim. Just like the FFE. That’s what swayed me away from the Leaf. In order to have the price make sense the only Leaf would have been the S or bottom trim level.

One other thing car makers need to do, not just in their EV vehicles but all vehicles is stop selling expensive Nav packages with old useless tech. Almost everybody today has a smartphone. All they need to do is put the necessary interfaces for people to use their smartphones. At least Tesla chose to make their tech an improvement on current display tech vs using 3 or 4 year old tech in the average new car.

Like 15 or 20 years ago nobody new they wanted let alone needed a smartphone and that they would become as ubiquitous as watches were just 20-70 years ago. In 10-20 years the Electric Vehicle that primarily drives itself, will be the new iPhone. All it takes is some leadership and vision from an industry that has a dismal track record of predicting the future.

Elon Musk will be seen as the next Steve Jobs but just like Apple it took companies like Google, Samsung and LG to join in on the road to the future we now know. Maybe it’s time those companies take their huge stockpiles of cash and start building cars while the current car companies fade into the sunset and stop perpetuating the myth that bring hydrocarbons is good for the planet.

While GM got it’s bailout, like Chrysler before it, this will probably not be the last time we see a big automaker in need of a financial lifeline. It’s time they stopped being pretending to be experts. The last thing they need to do is build the next Hummer. If they can’t lead they need to follow or just get the hell out of the way.

This time if we support innovators with the bailout money instead we can transform our society into the future sooner rather than later.