America Has an Answer to the Biggest Problem with EVs(theatlantic.com) |
America Has an Answer to the Biggest Problem with EVs(theatlantic.com) |
I feel what this article fails to mention is how the depreciation of EVs compares to depreciation of gas cars. Apparently, based on google searches, cars depreciate 15% when driven off the lot, and then a further 15% per year after that. So it looks like EVs are depreciating quicker.
This would definitely be a good deal, as they also have lower operating costs.
Nissan Leaf (one of the oldest BEVs) launched with 24kWh batteries. Now it has 40kWh for the same price (even less if counting inflation), and 64kWh upgrade options.
Batteries tend to degrade 1%-2% per year, and there's no breaking point when you have to replace. In the Model S's (another old EV model with over a decade of data available) the cooling system tends to die sooner than the battery it cools.
BEV battery recycling is still in infancy, because EV batteries are lasting longer than expected.
FWIW I drive a Toyota ICE and fully expect it to last to 200K+ miles and 20 years. If I decide to trade it, it would keep a heck of a lot of its value vs a Tesla. Those things depreciate like produce.
I think these stats are biases towards junky brands with high turnovers.
The unstated bit is American new-EV sales.
> Electric vehicles made up about 8 percent of new car sales in the United States last year, compared with more than a quarter in China, where new EVs can go for about $10,000 or less.
Except, we've also made those unaffordable by
> Biden has quadrupled tariffs on electric vehicles from China — from 25% to an eye-watering 100% — in a move designed to bolster U.S. jobs and manufacturing.[1]
If it was all about new-EV sales, we could set the EV tariff to 0%. A $10k vehicle would indeed increase sales in a way that's congruent to a climate agenda that's all about new-EV sales.
The real story is that agendas are a function of politics, but we kind of already know that. The difference in outcomes ie: the differential gain in EVs being driven between these two scenarios is traded away in return for votes.
1. https://www.npr.org/2024/05/14/1251096758/biden-china-tariff...
Otherwise, you’re just using regulatory capture to protect legacy auto profits and overly expensive vehicles. Protect US labor (within reason considering the value of a domestic manufacturing base and supply chain), but don’t protect the profits.
The problem is that they've already proven themselves unable or unwilling to produce affordable EVs any time this decade, so allowing Chinese competition at any reasonable tariff level will almost definitely doom them. For the government, it's a "damned if you do, damned if you don't". And the automakers are clearly betting that the government will protect them no matter what, even if they're suicidal. When companies like GM or Boeing play chicken with the government, they know the government will swerve first.
That said, my own policy would result in even more extreme trade restrictions for completely different reasons.
I think it is absurd to impose extensive regulations on some players but not all players. It makes no sense to me that I can walk or click into a store where two identical products are offered but the rules imposed on each producer are so different. One is regulated in the age of employees, the safety requirements for employees, the working conditions of employees, environmental protections, and so forth. The other is allowed to ignore all those considerations. When the US government imposes all those regulations on US players it is essentially making a rule that US companies are not allowed to compete.
I think that USians like to complain about government interference but actually support most of the restrictions they suffer. They don't want to see 10-year-olds in factories, or toxic effluent flowing into waterways. We may not all agree on all the regulations but we generally agree on most of them. Yet we are not willing to impose those restrictions across the board on all participants in US markets.
A company that plays by USA rules inside the USA cannot escape the costs imposed by those rules. So two identical products show up on the same shelf with drastically different price tags. It's no surprise that the higher-priced item does not sell. So if you want to sell your products inside the USA you are forced to move your production outside the USA and damage the labor force and ecology of some other part of the world.
There are two obvious alternatives to the existing status quo. One is to remove restrictions from producers within the USA. I do not advocate for this and don't think most USians would tolerate this. The other obvious choice is to impose USA regulations on the production of any product sold inside the USA. I do advocate for this but I don't think most USians would tolerate this either. The obvious effect on prices would be untenable for most USians. It would be political suicide to support such an action.
Yet, as the parent comment highlights, we see arbitrary trade restrictions for politically powerful industries despite the effect on prices. Clever appeals to nationalism and other hideous ideologies can sometimes produce public support for good policies for terribly wrong reasons.
In the case of EVs you have a very interesting conflict of choosing to allow irresponsible companies to do irresponsible things in order to create cheaper products that might save the environment. Or do you force companies to be environmentally responsible even if it makes environmentally safer products more expensive. (This ignores, of course, the whole debate about whether EVs are, in fact, environmentally safer. It also ignores other price factors like labor which might have a greater effect on prices than environmental protections. But it makes interesting conversation.)
If a non-USA producer can play by the same environmental protections and most of the same labor protections as the USA producers and still put a less expensive product on store shelves in the USA, I don't mind allowing their product into the USA. Of course, if that ever came to be the general case we could start worrying about the rest of those labor rules. But right now we are so far away from a level playing field that an abrupt leveling would cause too great of a shock. I wonder if USians could agree on what constitutes low-hanging fruit in any effort to level the playing field.
This is the part that hit me. In America we have no idea how much we are overpaying for things. There are plenty of reasons, sure, but at the end of the day things are wildly expensive with little to no acknowledgment from the government.
As far as Teslas go, they seem to follow a similar value curve to German luxury cars -- you can get them very cheaply if they're 5-10 years old, because the parts are so expensive to keep them running, and a lot of the status wears off when they're not visibly the newest model. This I suppose is less true with Teslas where the visual style isn't that different from 9 years ago.
As in, they're finally getting into a sub-$30K range.
Meanwhile, I'm going to drive my 2010 Honda Fit (that I bought for $5K in 2017) practically forever.
I'm making 6 figures as a software engineer, as does my wife. We have no kids.
I have no idea who are these people buying new cars, or who are all these people for whom $30K is "cheap". I can pay that out of pocket, but unless held at gunpoint, I won't.
There are many ways to make EVs marketable, but the key is make them goddamn cheap FFS.
And the answer to that is infrastructure, not technology.
We could make $5K glorified golf carts street-legal, and not requiring a license. For many people, that's enough for their grocery store runs / work / school commute.
Oh, they won't fare well in a collision with F-150? Then maybe we can remove those from the streets outside specific delivery and maintenance hours, and impose a lower speed limit for heavier cars.
That's before we get to the dangerous idea that we could charge the EV's as they go if we put wires into our streets... And perhaps add electronic signaling to make self-driving an easier problem to solve.. Maybe even a guiding rail (or two) to define lanes instead of paint that the weather can strip away...
And if I may dream, this would enable us to replace tyres for traction with higer-efficiency rolling stock, and even link up cars going in the same direction on regular routes to reduce drag (and traffic).
If only! I've lost all hope.
Even thinking about it is tramatizing.
*Based on the current OEM/supplier relationship, network of repair shops, etc. All of the post sales businesses built up to support the initial sale.
This is what the government along with standards bodies and manufacturers should be doing. It shouldn't be a market decision, because the market can't optimize this outcome.
At that point you end up with the government asking the industry to tell them what the standards should be and how to regulate it, likely they ask the industry to regulate itself then as well. Why have the government involved at all?
[1]: https://www.hrw.org/news/2024/07/02/hrw-urges-european-commi...
[2]: https://www.scmp.com/business/article/3232456/your-made-chin...
And for what it worth, China is leading the way in green energy transition. They are pushing it much faster and adopting it way better than anything the US has historically tried. Remember they only have a few decades into their own industrial revolution compared to the West's hundreds of years and they had already exceeded most if not all other countries in terms of progress.
The US doesn't even have a functional high speed rail system yet. Meanwhile, China built its own national rail network in less than 2 decades.
This isn’t even getting into the regulatory capture which prevents foreign products from being used/sold in USA.
If we allowed Chinese autos into the country free of tariffs, prices would almost certainly decline materially in real terms over the next few years.
These are a few issues of goods from China being an issue in the past:
A) Toys with lead paint being recalled.
https://www.sciencedirect.com/science/article/abs/pii/S02697...
B) Dog Food linked to China killing pets.
https://truthaboutpetfood.com/how-many-pets-have-ingredients....
Nor will a sub-$10k Chinese car compare to the build quality of even a $20k American car.
As with Temu, there's a reason Chinese EVs are super cheap.
It's the $5000 Chinese cars that are missing the safety features.
A few things:
1. We should tax vehicles according to their road damage, i.e., O((weight/axles)^4*axles);
2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
My neighbors almost universally run small businesses; and, almost universally, slap their business sticker on their 100k$+ 250s & 350s and then take the whole cost as a "write off" for "tax purposes". If the IRS was doing their jobs, these fuckers wouldn't be on the road — they'd be paying off fines and/or in prison for fraud.
Fair, though keep in mind that EVs and specifically their batteries are damn heavy putting them as sedans right up there with the bigger pickups and SUVs.
Taxes on EVs will also have to compensate for fuel taxes that would not apply to them.
>2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
Here in America we deal in freedom units, not metric.
Also, Americans love their RVs and big muscle trucks (both pickups and 18 wheelers).
>3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
Hope you'll like your groceries and all other shopping becoming quite a bit more expensive to make up for slower transport. 18 wheelers are the life blood of the American economy.
>slap their business sticker on their 100k$+ 250s & 350s and then take the whole cost as a "write off" for "tax purposes".
What they are doing is buying the vehicle using company funds as company equipment and then writing it down as a loss on their Income/Loss sheet. There's nothing wrong with it and you should do so for any company purchases.
You might complain that the line between personal and commercial is being blurred and you would be right, but in the small business world that line is blurry for both practical and "less than justifiable but tolerated" reasons.
Obligatory disclaimer: I'm not a CPA, none of this should be understood as financial advice. Consult a proper CPA or financial advisor for financial advice.
Why the left lane? Isn't the right lane closer to pedestrians? Also, what if you need to do a left turn?
>3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
seems like a nightmare to enforce, especially for models with hybrid variants that could do 3g/100mi.
How does this edict apply to roads on which each direction has only one lane (accounting for about half of US traffic volume)?
Those ideas read like poetry.
I also needed the truck, he didn't need his, he just wanted to have what his other buddies had.
They did that: https://www.cato.org/blog/im-government-im-here-give-you-gol... (the article is kind of snarky but 100% accurate).
And I know people who bought those free golf carts (that's how I heard about the program in the first place - if I had a place to park the thing I would have done it myself), drove them around a little and then they broke and that was the end of that.
Nice waste of government money.
You can leave the AC running while you're in a store. You can charge at home on 110v. not that much to maintain. no smog, no oil changes, 125k coolant changes.
you're a well-paid engineer, buy it as an experiment and have some fun with it.
They can get a different color on the license plate. Easiest fine in the world.
But I agree, the massive amounts of cheap solar panels and EVs has and will continue to make a significant impact. It sucks that they're built on such lousy foundations though...
They were a toy basically, and an utter waste of government money.
I think the "fraud" comes from the fact that they use it for personal purposes but fail to declare it on their income tax returns as they should[1]. For the typical case of a general contractor or an electrician using their "work" pickup truck to buy groceries or even to commute, that expense is not tax-deductible and must be declared as a fringe benefit.
[1] https://www.irs.gov/publications/p15b#en_US_2024_publink1000...
As the GP said, the line is very unclear for small businesses. It isn't technically fraud, though, if our current laws allow it. Fight to change the laws if you want to, but until then it can't be fraud.
The linked IRS document specifically says
>For example, a pickup truck qualifies if it is clearly marked with permanently affixed decals, special painting, or other advertising associated with your trade, business, or function and meets either of the following requirements.
(emphasis mine)
Though just to toss some numbers out, if you had to buy a $10k battery every 150k miles that's definitely affordable.
And we're currently talking about cars that are worth significantly more than $5k. An extra 30% to fix it up is very different from an extra 200%.
Well do the math with prices instead of miles.
If you think you need to replace the battery soon, and the EV is $8k cheaper, it's a tempting purchase. Just don't spend the $8k on something else.
If that's impossible because the battery car would have to go below free, then that could be a problem. But that's still way cheaper than EVs are right now. I wish we had that problem! And at that point in the future, the fix is cheaper batteries, and it will happen.
> Some crashes that would be fixable for an older ICE car will require replacing the battery in an EV at a cost far greater than the car would be worth, making it non-viable. The battery is a risk factor that many people already worried about their finances won't want to take on.
I don't think the difference between "4% chance it's totalled in the next few years" and "5% chance it's totalled in the next few years" is a deal breaker. And that math is affected by so many other model-specific things too...
https://www.cnbc.com/2024/04/05/poor-resale-values-of-evs-ar...
Edit:
A recent study from iSeeCars.com showed the average price of a 1- to 5-year-old used EV in the U.S. fell 31.8% over the past 12 months, equating to a value loss of $14,418. In comparison, the average price for a comparably aged internal combustion engine vehicle fell just 3.6%.
https://spectrumnews1.com/ca/la-west/transportation/2023/11/...
The Tesla Model S topped the list of EVs that depreciated most over five years; it lost 55.5% of its value, according to the analysis. Rounding out the top five were the Chevrolet Bolt EV (-51.1%), the Nissan Leaf (-50.8%), Tesla Model X (-49.9%) and Tesla Model 3 (-42.9%).
Overall, the average vehicle lost 38.8% of its value after five years, according to the analysis. Trucks retained the most value (depreciating 34.8% over five years), followed by hybrids and SUVs, which depreciated 37.4% and 41.2% respectively.
Environmental guilt only goes so far in terms of sales. For large adoption, the depreciation problem needs to be solved. Wealthy people (1st buyer) can afford to throw money at EVs over and over again and usually keep their vehicle only 2-3 years. Middle class (2nd buyer) need a dependable car that costs less per month (cost minus sell value) and lower class people (3rd buyer) need a vehicle that will last forever. The current state of EV's only satisfies the first and maybe some of the second buyer market while an ICE satisfies all three.
EV's sure are cool though.
5-year depreciation can be anywhere from 20 to 60 percent depending on model, and that's just looking at gas cars.
Edit: Oh you added a lot more. The wall of all EV prices falling will happen less and less as the tech matures. And even with that factor, they're still not at the bottom of car depreciation lists after 5 years.
You say that the average price of a used EV fell more than the average price of a used ICE as if that was a bad thing. But you do not tell us the corresponding statistic for prices of new vehicles. What if the average price of new EVs fell 50% but the average price of used EVs fell 31.8% while the average price of new ICEs rose 25% and the average price of used ICEs fell 3.6%?
In general I would consider lower EV prices to be a positive development. Your barage of numbers seems aimed at confusing the issue. Can you provide more clarity?