EVs will be around, just like the late 1800s, early 1900s and on thru the 2000s. And likely not much more.
Elon Musk announced recently that if he doesn’t get a 25% share in Tesla (up from a reported 13%) he is going to pull the company’s AI development operations out and create a separate company. Many are confused by this demand. But as a rabid news hound of the automotive world, I may have figured this out. And it is both simple and another step in Elon Musk’s brilliant, quirky plan.
Let’s face it. Mr. Musk has made moves that leave one in wonderment. This is a man born in South Africa, went to college in Canada then UPenn where he has degrees in physics and economics. It all makes one shake their head. Oh, and he is also the wealthiest man in the world. The list could go on about what he has achieved. His interests currently include Tesla, SpaceX, XCorp, the Boring Company and xAI, cofounder of Neuralink and OpenAI. He’s a guy to watch and listen to when he speaks.
Now, we’ll really shift gears. Think back about January and something called the Polar Vortex and how nearly the entire country was colder, snowier and icier than normal. And if you were up north you’ll remember all of the reporting on long lines of dead EVs. Seems their ability to charge and operate is not so great when cold. People reported ranges less than 50% of indicated and when they finally managed to get themselves hand pushed up to a charger it didn’t work very well. Many hours for a charge to make it home. Then there were the Uber drivers in New York City whose cars were dying left and right.
FLO, a maker of EV chargers, addressed the 18 most popular EV brands and they told the owners that when it gets cold they need to double the range needed for a drive. And to use the heated seats and steering wheels to stay warm and lessen use of the cabin heater.
Then, there was the precipitation and winds that took out many power grids all over the country. No grid, no charger, no juice. And no car. Same on the other end of the spectrum where heat also taxed the grids. Any temperature over 80 degrees causes loss of range. At 100 degrees you lose 31% of your range according to reports. So, sorry Arizona, Texas, Nevada and others.
Shifting gears again, we’ll talk economics. Ford has reported losing $36,000 on every EV sold in the third quarter of 2023. They and virtually every automaker around the globe have drastically cut their EV plans. They are cancelling new plants and battery operations while at the same time retooling what were to be EV plants to be hybrid and ICE plants.
The year 2022 was the “high” in the EV rage. As 2023 went on the magic went away. The buyers were still the classic early adopters who are wealthy and all about virtue signaling who live primarily on the West Coast or in the lower Northeast and mid-Atlantic regions. As long as they keep buying, it seems there is a niche for EVs. A very small, unprofitable niche for all so far, besides Tesla and the Chinese.
Adding to the problems for EVs, Hertz dumped a third of their EV fleet. Ford is cutting the F150 EV production by 50%. And as for the used EV market, given reports and tests with 79% more reliability problems than ICE engine vehicles, the rush of consumers may be very hard to find. Whether new or used, we have but to ask our dealer friends how many forlorn EVs they have sitting on their lots.
So let’s go back to the beginning. Why is Mr. Musk drawing the line and demanding what is basically a doubling of his Tesla ownership or he’ll peel the AI projects into their own companies? Simple, really. He sees the EV market coming off of the rails as much as VW, Toyota, GM, Honda and all of the rest. He has felt the pricing pressures and loss of volume as Chinese EV makers go global. Especially in Europe. He must also realize the money down the road is in AI, space travel and medicine and other projects. He is currently discussing thoughts to cancel future Tesla plants. So, adding 2+2 gives us the answer.
Given the nation’s debt and the current “project of the month club” political activities and geopolitical issues, the government will sooner than later run out of money to fund this foolishness. State programs as well will drift away. The big news about forecasting doom for ice powered vehicles is waning. There are few left broadcasting big pronouncements of all EVs by 2030 or some other ridiculous date. In the biggest state for EVs, California, it seems they might be cutting themselves out of a working distribution grid with their insistence on electric trucks. So, I think it’s safe to put a fork into this one. EVs will be around, just like the late 1800s, early 1900s and on thru the 2000s. And likely not much more.
Mr. Musk provides us with a brilliant look at the future. There is a reason he is the world’s richest man. Have to watch what he does next. But, he’s not betting his wealth on EVs alone it would seem.
P.S. — Hey shop owners you may want to consider a possible money maker. With the original swarm of EVs making their way to the used car market there will be a need for someone to test the batteries to see what state they are in. That greatly affects the value of the vehicle. It takes a special battery degradation test. That way buyers and/or owners know how far the capacity, and thus range, have degraded. Thar may be some money in them there hills after all!
At a young age, industry veteran Tom Langer started detailing cars for his family’s dealerships, which then led to work in the jobber and warehouse business, along with a machine shop and auto body shop. He held a variety of positions with an auto parts manufacturer for 10 years, and remained in the industry working with shops, warehouses and manufacturers in research and more.
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