The New York Times, or one writer paid by the New York Times (one journalistâ€™s take or analysis or opinion doesnâ€™t represent the entire paper, you know), had a piece out a couple days ago claiming the dawn of the EV age is now.
Somehow, I missed this article until now. But letâ€™s a look at its assertions, shall we, and see what is and is not accurate?
The focus here is on Europe, which makes it a bit tricky to see if itâ€™s instructive for the North American market. After all, the U.S. and Canada are more spread out, and European emissions rules are different. Still, if EVs are gaining a foothold in Europe, it could mean that EVs will soon have more of a share of our market than the tiny percent they do now.
The author, Jack Ewing, asserts that while European sales of internal-combustion engine cars have collapsed in the Old World due to the pandemic, electric-vehicle sales have been up. This is, he says, because pricing for EVs has become close to what customers would pay for similar ICE vehicles.
The problem with the assertion comes in the next paragraph: Ewing notes that government subsidies are cutting up to $10,000 off the price of EVs, depending on the country. He also notes that OEMs are cutting some serious deals, in order to help them meet emissions standards.
Not to mention that while the market share for EVs in the U.S. is about 2 percent, itâ€™s only 5 percent in Europe. If hybrids are included, that number rises to 9 percent â€“ and as we all know, hybrids arenâ€™t pure EVs. Hybrids, of course, use internal-combustion engines to some extent (varying by model).
So is the following true? â€śAs electric cars become more mainstream, the automobile industry is rapidly approaching the tipping point when, even without subsidies, it will be as cheap, and maybe cheaper, to own a plug-in vehicle than one that burns fossil fuels. The carmaker that reaches price parity first may be positioned to dominate the segment.â€ť
Well, maybe. The last sentence is probably true â€“ but it ignores factors such as range anxiety, charge time, and charger availability/accessibility. Even accounting for Europeâ€™s dense cities and differences in EV infrastructure, consumers may still have those same concerns on that side of the pond.
As for the tipping point and the speed with which weâ€™re reaching it, thatâ€™s debatable. Europe does have a lot of charge points â€“ 190,000 as of 2019, according to this report â€“ but that same report shows that 76 percent of the charge points are in four countries that make up only 27 percent of the European Union. Even accounting for the fact that not every European country is an EU member, thatâ€™s disproportionate distribution. And not all of those chargers are fast chargers.
Furthermore, there are currently about seven EVs per charge point on the market, and if the EV market is to grow, there will need to be more charge points. The European Automobile Manufacturers Association (ACEA) estimates the number will need to be 2.8 million, at a minimum, by 2030.
Iâ€™m not saying Ewing, or the experts he quotes who estimate the EV tipping point as anywhere from 2023 to 2025, are wrong. They could very well be correct. But theyâ€™re definitely optimistic, and they seem to be focusing on MSRP, since they seem to believe thatâ€™s what will get customers to make the switch.
The logic seems to be that consumers will leap to EVs as soon as they are the same price or cheaper than gasoline- or diesel-powered cars. After all, EVs will also presumably be cheaper to maintain, since they donâ€™t need oil changes. But EVs still will need new brakes and tires and they can still suffer body damage. Theyâ€™ll be cheaper to maintain, perhaps, but not cost-free.
Ewing also asserts that the move to EVs might be â€śvery scaryâ€ť for traditional car companies since basic ICE tech hasnâ€™t changed in major ways but thereâ€™s a race among companies to find the best battery tech that also brings the cost of lithium-ion batteries down. This seems to ignore that a) while changes to ICE tech have been incremental by comparison, there has been a lot of innovation that helps bring emissions down and b) traditional automakers are, in general, also working hard on EVs. Did Ewing forget that Nissan builds the Leaf and General Motors sells the Chevrolet Bolt?
That last one would be understandable â€“ Chevy barely markets the Bolt.
Like other writers, Ewing seems to fall for the narrative that Tesla is just killing the traditional automakers in the EV game. The truth is more complex.
â€śThe California company has been selling electric cars since 2008 and can draw on years of data to calculate how far it can safely push a batteryâ€™s performance without causing overheating or excessive wear. That knowledge allows Tesla to offer better range than competitors who have to be more careful. Teslaâ€™s four models are the only widely available electric cars that can go more than 300 miles on a charge, according toÂ Kelley Blue Bookâ€ť, Ewing writes.
I have no idea what he means about competitors needing to be more careful. Does he mean other startups have fewer resources than Tesla, and thus can not test as extensively? That might make sense. But why would the legacy automakers have to be more careful? They have tons of resources for testing EV tech. And again, several have been selling EVs for years. The big automakers should have plenty of EV data andÂ â€śknowledgeâ€ť to draw on. Tesla may be tops in range for now, but the EVs offered by others arenâ€™t that far off, and are more affordable.
We donâ€™t doubt that KBBâ€™s assertion is accurate. But again, context is ignored. The other automakers have been testing EVs for years, too. And Tesla may have four models that can go over 300 miles on a charge, but the company has been plagued by quality issues, and most Teslas are priced too high to be affordable to the mainstream car buyer. Not to mention that owning a Tesla â€“ or any EV â€“ can be a dicey proposition to the customer who canâ€™t afford a home charger. Or the customer who lives in an urban area and doesnâ€™t have access to his or her own charger. Finally, chargers can be unreliable. I know from experience.
Ewing then goes on to talk about rumors that Tesla will use todayâ€™s Battery Day to announce a battery that can store more juice at a much lower cost as proof that Tesla is far ahead, and he follows by quoting an analyst who once worked for a Tesla supplier as saying that the legacy OEMs are playing catch-up on EVs. To be fair, the analyst does concede that the big automakers will catch up.
Then there is this gem: â€śThe traditional carmakersâ€™ best hope to avoid oblivion will be to exploit their expertise in supply chains and mass production to churn out economical electrical cars by the millions.â€ť
Again, Ewing seems to be operating from the premise that Tesla and other startup EV makers will just decimate the legacy OEMs as soon as price parity is achieved. As if the OEMs havenâ€™t already been working on EV tech alongside the startups. As if the OEMs arenâ€™t better positioned to mass-produce cars at scale with fewer quality problems, regardless of powertrain. As if OEMs donâ€™t already have dealer networks, and supplier networks for the parts that arenâ€™t powertrain dependent (brakes, electronic parts, tires, et cetera). As if OEMs havenâ€™t spent 100 years figuring out how to sell and service cars at a level that most startups havenâ€™t grasped yet. As if legacy automakers havenâ€™t spent decades working on aerodynamics and other aspects of automotive design that EV makers will need to master to be successful.
Hell, two of the three EVs that Ewing lists in his lede as examples of vehicles that could soon be eclipsing ICE vehicles in sales are built by legacy automakers â€“ Volkswagen and Renault. Speaking of VW, Ewing claims the launch of the ID.3 in Europe will be a test of legacy automakerâ€™s ability to build EVs.
Again, as if legacy automakers wonâ€™t know how to build EVs as well as startups, or will be seen as old news by consumers. He then quotes a professor about how the automakers will have a steep learning curve when it comes to building battery-electric vehicles on a mass scale since the tech is so new. Once again ignoring that the OEMs are already building EVs (in small numbers, to be fair) and have plenty of experience with mass production.
Sure, battery tech is new, but automakers have been working on it for years now, and if any group of companies knows how to bring new tech to scale with relative ease, automakers would be that group.
Iâ€™m not arguing that EVs wonâ€™t eventually become dominant. They likely will, although the ICE will perhaps remain for a small part of the market, such as trucks and sports cars. Nor am I arguing that the start-ups havenâ€™t been impressive, in some ways, or havenâ€™t helped drive innovation. The truth is that both startups (Tesla, Lucid, Rivian, et al) and the legacy OEMs have been working to drive EV development. And both will likely be part of the picture moving forward.
Nor do I mean to pick on Ewing or the Times. The Times generally produces good journalism, faceplants from the op-ed department notwithstanding. And Ewing isnâ€™t totally off-base, here. It is true that dropping sticker prices for EVs will help drive adoption, and itâ€™s true that if batteries can store more energy for less cost, that will help. If batteries cost less, EVs will cost less, and if the range increases, consumers will be more interested. Therefore, if cheaper EVs have longer ranges, itâ€™s a win-win for electric vehicles.
But charge times still need to drop (even the half-hour time to 80 percent that Tesla offers is still a lot longer than the empty-to-full time of just a few minutes for gas cars) and charger availability needs to increase. Cheaper sticker prices for EVs isnâ€™t enough, since sticker pricing isnâ€™t the only factor at play.
Is the EV dawn upon us? Possibly. But itâ€™s more likely to be a slow transition that moves in fits in starts over the next few years, maybe even the next decade, than the rosy and seamless transition that Ewing seems to see taking place.
Iâ€™m not anti-EV, I am not in the pocket of legacy automakers or Big Oil, and I donâ€™t think the NYT is fake news. Iâ€™m not even a pessimist or a cynic. I just see a messy, complicated reality where many industry analysts, business writers (many seem to not fully understand the automotive industry, which is, to be fair, quite different than most), and EV proponents (many of whom have a stake in the success of EV startups) see only the best-case scenario.
Again, I believe EVs will, at some point, be dominant for most car buyers. But to borrow language from the COVID vaccine discussion (language thatâ€™s also based on electronics), getting there wonâ€™t be like flipping a switch. It will be more like using a dimmer â€“ a gradual increase. Not only that, but the increase may dim at times before progressing again.
The EV age will dawn in fits and starts. Not overnight.
[Images: Chevrolet, Nissan, Tesla, Volskwagen]