By on November 16, 2016

2017 Chevrolet Bolt EV

Politicians walk back policy promises as frequently as Ram announces special edition 1500s, so it’s not unwise to take campaign pronouncements with a big grain of salt.

Environmentalists and those close to the electric car sphere aren’t happy right now, as Donald Trump’s ascendancy to the Oval Office could put the kibosh on green ambitions. There’s talk of a rollback of fuel economy targets, of California no longer being allowed to be “special” (at least, when it comes to auto industry regulation) — basically, the sky could be falling, but they aren’t sure if it is yet.

Let’s take that frenzied speculation to its natural conclusion. Say the sky falls, environmental regulations are left gutted like tuna on a wharf, and the government incentives to buy an electric vehicle dry up.

Can EVs stand on their own?

John Voelcker, writing in Green Car Reports, claims we could be on the cusp of learning whether they can or can’t. Admitting there’s nothing but uncertainty surrounding the issue, Voelcker says a worst-case scenario would be a “genuine market test for the appeal of plug-in electric cars.”

Certainly, for almost their whole existence (this century, anyway), EVs have rolled off dealer lots with varying amounts of MSRP-lowering government cash hiding in the glove box. This isn’t just an American problem, if you choose to call it a “problem”. Governments everywhere have used taxpayer money to spur the adoption of EVs, and consumer take-up has always fallen short of predictions.

That’s not to say people aren’t buying them. Year-to-date sales of battery electric vehicles in the U.S. are up 12.6 percent compared to the same period in 2015, but still we’re talking less than one half of one percent of market share. Still, ever-increasing ranges have helped grow an image of viability, and a looming crop of affordable models with 200-plus-mile ranges seem capable of attracting wider interest and busting the “niche” label.

The first of those models — the 2017 Chevrolet Bolt — should trickle onto lots by the end of the year. Perfect timing, if indeed the doomsayers are correct.

“Advocates have long said that when electric cars with 200 miles or more of range enter the market at affordable prices, their obvious advantages will produce a large natural buyer base and sales will increase,” Voelker writes, adding that a Trump administration could “test the truth of some advocates’ assertions.”

Even in the absence of pro-green regulations, logic states that EVs could still find fans if they’re practical, affordable, and have the infrastructure to support them. (A sharp and lengthy rise in fuel prices could help, too.) The infrastructure has been slow to roll out, despite recent efforts by the federal government to make long-distance EV driving practical.

Actually, you needn’t take logic’s word for it. A study published earlier this year quizzed Northeastern and California drivers on the topic of plug-in electric vehicles. When asked how likely they were to consider a battery electric vehicle as their next car purchase, 45.23 percent of Northeastern respondents said it was “very unlikely.” Another 14.41 percent it would be somewhat unlikely. Just over 8 percent of respondents said an EV purchase was very likely.

California respondents seemed more favorable to the idea, but roughly 46 percent still classified an EV purchase as somewhat or very unlikely.

When asked what attributes would make them more likely to purchase one, respondents on both coasts listed a lower purchase price as No. 1. Coming in second was increased range, followed by more plug-in points.

Interestingly, a slim majority of Northeastern drivers (55.07 percent) wanted government policies to make it easier to own an EV. More Californians (60.32 percent) felt this way. With price being consumers’ biggest consideration, that likely means tax credits or other subsidies.

EVs seem poised to enter that Goldilocks zone of acceptable price, range and (to a lesser degree) infrastructure support, so we’ll soon know whether the new crop sinks or swims in the domestic market. As for the sky falling, time will tell if we get that “genuine market test.”

[Image: General Motors]

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53 Comments on “A Worst-case Scenario for Green Types Would Put EV Sales Predictions to the Test...”


  • avatar
    RobertRyan

    Can EV’s stand on their own? Short answer no. Technology developed would end up in other areas,

    • 0 avatar

      I’ve never thought they could. To become mainstream they would have to have the range of a gasoline vehicle and some kind of reasonably quick recharging. I personally don’t count an hour or more as quick.

      These companies all rely on the US and State Governments for their very existence.

      The Senate Finance Committee and the House Ways and Means Committee just today launched a probe into some of the necessary supporting companies. Solarcity being the most notable.

      Age and capacity of the existing electric grid makes increasing market share unsupportable. And that probe is aimed at solar companies. I expect the outcome to be less or no more support from the government at a minimum.

      Add in a supposed new era of austerity. I expect the tax incentive for buyers to vaporize.

      I can’t imagine much of an expansion of the industry is going to occur.

      • 0 avatar
        2manycars

        Certainly there might be a market for short-range delivery vehicles. It’s been done in the past successfully, and with no government subsidies:

        https://comeheretome.com/2010/04/26/swastika-laundry-1912-1987/

      • 0 avatar
        George B

        WhiskeyRiver, the main problem with electric vehicles has always been cost. For more than 100 years gasoline powered vehicles have been better and cost less. If electric vehicle price was low enough, many people would consider one within its limitations. In contrast, increasing range at current prices doesn’t help the economics of electric car ownership much. Same deal with quick recharging if it makes expensive battery packs wear out years sooner than with normal charging. Existing grid capacity isn’t much of a limitation in areas where people allow new infrastructure to be built. If selling electricity to charge electric cars is profitable, electric power generation and distribution can be expanded to meet demand.

      • 0 avatar
        kosmo

        Interesting point on the grid capacity. As a geeky engineer, I’d be curious to see whether the grid in various locations could support say 25% EV volume.

  • avatar
    RangerM

    They can if the people who advocate for EV subsidy are willing to put their money where their mouth is.

    But, I don’t think there are enough of them to make the market viable. The technology for quick charge/high range hasn’t advanced far enough at this point.

  • avatar
    hreardon

    Buyers at the high end of the market are relatively price inelastic: Tesla model S buyers will continue to buy without incentives.

    $35k without incentives is a price point where the mainstream can buy – the question is whether the manufacturers can build and sell profitably at that price.

    • 0 avatar
      mcs

      I agree, Tesla and other high end EVs will not be sensitive to the incentives. No matter what happens at the low end, high end EVs will continue to grow and improve. The high end will drive new technologies like Porsches 800VDC 220kW charging. Tesla has said that the cells for the Model 3 are 30% more energy dense than the Model S. Based on that, we might see our first 400+ mile EV if Tesla decides to put those cells into the S and builds a P130D.

      By the way, many of us don’t buy Evs to save the planet or money. We buy them for the way they drive. Once you’ve spent any time driving one, it’s tough to go back to an ICE.

      • 0 avatar
        stuki

        Unless the charging infrastructure is dependent on incentives as well, I’d think the high end should hold up OK. Heck, in SF and LA, Model S’ may even get a boost of the “Snub Trump” kind. Among the younger set, this may well even be true for lower cost models like the 3. It’s not like anyone who can afford to rent an Andy Gump with 4 roommates in San Jose, would notice the difference the subsidy makes.

        A bigger problem would arise if fuel economy standards were gutted to the point where even lower cost ICEs could be sold with Tesla like, or better, power figures. Killing the “Have it all because I’m special” appeal the S currently enjoys.

  • avatar
    RS

    EV technology isn’t the only technology in play. 20 billion barrels of oil recently ‘found’ in West Texas and other significant discoveries make it increasingly harder for EV economics to become attractive. Oil technology seems to be moving faster than EV tech.

    Also, the recent news of bio-butanol sales to consumers in Houston, TX may also be a significant development for gasoline vehicles.

    • 0 avatar
      stuki

      The difference is, while oil tech is making new sources more viable than they previously were, the new ones are still more expensive to exploit than those of the generation preceding it.

      So, over time, break even cost per net energy recovered is trickling upwards. While EV costs are still falling. When, or whether ever, the two will meet is an open question, but developments still point to increased viability of EVs over time.

      And the really big transitional break for EVs have yet to be attempted at any sort of scale: infrastructure/road/rail provided power for the high speed, long distance “freeway” portions of trips, with concurrent charging of shorter range local batteries. Get over that hump, and battery needs/costs/weights drop like a rock, as does all the costs and weights associated with high speed operation over variable quality friction mediated surfaces.

      Along with the vast majority of local pollutants being produced by the tire/pavement interface, assuming either steel on steel or maglev or such on highways. With clean conmbusting newer engines, and more so with EVs, that’s where more and more of air pollution is coming from.

  • avatar
    shaker

    Just tell Trump that EV’s run partially on coal – that’ll keep the incentives in place, as he’d like to reward his constituency.

  • avatar
    whitworth

    No, they can’t stand on their own two feet. And I see much of this corporate welfare ending.

    The whole purpose of these subsidies were never “sold” to us a permanent fixture in the marketplace where you get paid to buy a certain type of car forever. Just a short term “get the ball rolling” kind of thing.

    • 0 avatar
      mcs

      Corporate Welfare? And I thought that getting an EV subsidy was a way for me as an entrepreneur and job creator to keep a little more of my hard earned income. I’m sure you’ll be glad to know that since I own a fair amount of mineral rights in the Permian Basin, the cost of my EV was covered by a portion of the oil subsidies I received.

      • 0 avatar
        whitworth

        No, I don’t regard a subsidy the same as lowering everyone’s taxes, nor would any economist.

        Funny how the same people that say we need to sacrifice for Mother Earth scream hysterically if they have to pay a bit more for their electric car.

        • 0 avatar
          mcs

          @whitworth: I didn’t say anything about lowering everyone’s taxes. I was just paraphrasing the philosophy of some conservatives that believe that job creators should be able to keep more of their money. Some conservatives complain about me getting a $7500 EV credit but are perfectly fine giving me a tax break more than 100 times larger.

          Subsidies were scheduled to go away no matter who was elected. Actually, Trump will probably be restoring aid to Tesla by increasing the taxes on their upcoming German EV rivals. So, I think Trump will be a greater benefactor to Tesla than Hillary would have been.

          For me, I don’t care about the subsidy. It wasn’t a lot of money to me. I get far more money in oil subsidies. State officials approached me to get my opinion on the State subsidy and I told them that I didn’t think it should be going to people buying high-end EVs or those of us with higher incomes.

  • avatar
    heavy handle

    Doesn’t it remind you of the Big 3 asking for quotas in the late 1970s? They were convinced that consumers would flock to the Escort and Chevette if Japanese cars weren’t so cheap. Turns out consumers still wanted Japanese cars, and they were willing to pay big bucks for them, which had the knock-on effect of confining the Big 3 to the cheap end of the car market.

    What most people still don’t understand is that the appeal of electric cars, and hybrids before them, isn’t based on savings. People buy them because they are more expensive, just like they bought the Prius because it was 10K more than a Corolla. It’s the exact same sales narrative that sold many a Cadillac back in the day (when they made good cars). It’s telling the world “I can afford it.” What’s more American than that?

    • 0 avatar
      mcs

      @heavy_handle Yeah, I’ve wondered about that. It is a status symbol that not everyone can own. Even some that are wealthy, depending on their circumstances, can’t own one. Go into any poorer urban areas and you’ll find plenty of older (and sometimes newer) BMWs and Mercedes. You probably won’t find any Teslas partially due to charging issues in those areas.

      I own an EV because I like the way they drive. Everyone I know that has one bought it for the same reason I did. But, that’s an extremely small sample and I’ve wondered about the status symbol angle.

  • avatar
    DC Bruce

    A friend of mine who lives in Silicon Valley recently traded his Quattroporte for a Fiat 500E. (He’s now retired and restores cars for fun: on the lift in his custom garage: an E-type and an Alfa). He kind of likes the little Fiat, and it’s the perfect urban runabout, which is how he uses it. His other car is a Lexus hybrid SUV RX350 or whatever.

    I think that, left alone, the EV market might split between suburban runabouts like the Fiat, where massive range isn’t an issue and expensive status mobiles like Tesla. The Leaf could have filled the former category but for some apparent major design fails.

  • avatar
    orenwolf

    Of course they can. The question is, how will they change in such a situation?

    There are buyers, like me, who would purchase an EV because *we want an EV*, not because we’re getting price cuts. If the price of an EV went up by 10-15% I don’t think I’d care overly much.

    Now, of course, not everyone feels that way, or can *afford* to feel that way. The end result of no subsidies would be, IMHO, that EVs would become luxury items for much, much longer than they would be otherwise.

    Tesla’s selling enough cars to come close to some luxury brands currently, and not all model3 buyers would cancel their reservations if the car was suddenly 20% more expensive overnight, but I’d wager a great many would.

    That may or may not kill Tesla depending on how quickly they can adapt to demand changes, of course. But it doesn’t matter – they’ve shown the way and other EVs will fill that demand.

    It may well slow the march of EVs overtaking ICE by decades, but ultimately they would survive in some incarnation. They aren’t going away.

    • 0 avatar
      mcs

      @orenwolf: I think the subsidies for Tesla could be replaced by a tariff firewall against the upcoming German EV competition. The tariffs would be a far greater benefit to Tesla than a $7500 dollar tax credit. In other words, they’ll lose the $7500 (which was going away anyway), but their competitors could have their prices jacked up by $12,000 or more depending on the percentage of the tariff and the price of the car. Trump might be the best thing that could have happened to Tesla.

  • avatar
    SCE to AUX

    Good writeup.

    Tesla has probably thought about the end of consumer subsidies more than most mfrs, due to the pending arrival of the Model 3. Until now, I doubt the subsidies aided their sales dramatically, because their vehicles already cost so much, and perform so much better than other vehicles of that price.

    But Tesla’s future isn’t the Model S or Model X; it’s the Model 3. And the company already knows that the subsidy will evaporate once the company has sold 200k vehicles, a target which will be achieved partway through Model 3 production.

    As an early Model 3 reservist, I’m fairly confident I would be buying the car with the subsidy intact. However, I only took delivery of my former 2012 Leaf because of the subsidy, which was a significant portion of its MSRP. I don’t fit the Model S $$ demographic, shall we say.

    Georgia’s recent elimination of a state EV subsidy virtually wiped out Leaf sales there, which had been booming. I don’t know how Tesla sales fared.

    So with the evaporation of the subsidy already looming for Tesla (and soon after, Nissan, GM, and Ford), the only hope for Tesla is for the Gigafactory to fulfill its promise of substantially lower battery costs. This will allow them to pocket some production savings while keeping prices competitive, and theoretically turning a profit. The other companies can afford to absorb some losses in their EV offerings; Tesla cannot do this forever.

    If the subsidies disappear before I can buy another EV, I *might* still do it. But the price would have to be equivalent to the ‘diesel premium’, meaning a few thousand over a ‘normal’ ICE car.

    As for charging infrastructure, I blame the mfrs and the regulatory agencies of the world – not the governments or the taxpayers. Infrastructure expansion is suffering without a common charging protocol. I credit Tesla for building out the Supercharger, but they’ve only done it to enable their own survival. IMO, the mfrs should all adopt the Tesla protocol in the US and perhaps a different one in Europe. In any case, the endless debate over this issue is shameful:
    https://cleantechnica.com/2016/01/01/ev-charging-time-single-fast-charging-standard-now/

    As for consumer surveys of how likely people are to consider an EV: pffft. On EV fanatics believe those optimistic numbers. The real test is whether a single mom would buy one as her only car.

  • avatar
    HotPotato

    Who knows: EVs are a natural fit for three pet Trump causes, namely America-first (Tesla and GM the world leaders in EVs, and one would think he’d want to strengthen the advantage of American companies), infrastructure building (lotsa chargers needed out there), and coal mining (because EVs don’t care where the electricity comes from).

    Then again, with Myron Ebell heading up the EPA transition, sensible planning may take a back seat to chest-beating about how global warming is all a Chinese hoax, etc.

    But again, who knows what Trump will do. He changes his positions more often than his underwear, seemingly just agreeing with whoever he spoke to last, and with his advisors so far consisting mostly of conspiracy nuts on one hand and black-hat corporate lobbyists on the other, I don’t predict good things.

  • avatar

    Last time I checked (i.e. yesterday) Tesla stock actually went up. IMO, EV sales are vulnerable to tax credits. At least they turn out to be in the Netherlands, where I live. EV makers need to focus on dramatically lighter passenger vehicles. IMO the only type that benefits from a smaller battery pack and/or reduced charging times, and that can have a purchasing price that’s on par with similar ICE cars. I suspect that there will be more interest for the type of propulsion like the one Aquarius Engines is developing. That holds the promise of substantially better energy efficiency (since the ICE is coupled to the generator) -and- low emissions.

  • avatar
    bunkie

    My wife made an interesting observation regarding the Trump presidency: power will devolve to states with liberal bastions like NY and CA becoming even more so. The converse is also likely to be true. In this specific examples, CA and NY are likely to continue (and even increase) EV subsidies as we tend to see EVs as being beneficial even if we, ourselves, don’t drive one.

    I’m no Trump supporter but, from an academic viewpoint, this is going to be a very interesting ride as power shifts. How it will shift remains to be seen.

  • avatar
    ToddAtlasF1

    Compliance cars will go away which will enable the best EVs to command prices in line with costs, sparing people who can’t afford EVs the burden of subsidizing them through taxation and more expensive IC cars. It’ll be a win-win, unlike when the fascists were picking the winners.

    • 0 avatar
      heavy handle

      Not sure I understand how tax rebates on EVs leads to more expensive IC cars. They were always going to be limited to 200,000 per manufacturer, which is nothing in a 10 million car market.

      Are you saying that the relatively few Leafs and Teslas sold increased the price of a Camry? By an actual number (at least a cent)?
      You would expect the lower demand for ICs to lead to lower selling prices.

      • 0 avatar
        ToddAtlasF1

        Someone had to pay for the development and construction of all those compliance cars. It wasn’t people leasing Focus EVs for $99 a month. It was people buying F150s. In California, the transfer payments to Tesla were more overt.

        • 0 avatar
          heavy handle

          You are selectively adding-up one side of the ledger, ignoring the other.

          The CA laws are due to the bad air quality in that state, and the costs that derive from that. Automakers build “compliance cars” so they can access that lucrative market. If you believe that the profits they make there are given back to buyers, you are incurably naive.

          The world in which that happens is also a world where we commute on flying unicorns.

      • 0 avatar
        Pch101

        I can’t believe that I’m going to say this, but Todd has a point.

        If a company is forced to sell a product at a loss, then it would not be surprising to see the company making other efforts to make up for those losses.

        However, given the realities of market competition, it isn’t likely that this would have an impact on vehicle prices. It isn’t possible to just pass on all of the costs arbitrarily by padding the prices of everything else.

        It’s more likely that the net result is a slight reduction in corporate earnings. Since stock prices for mature manufacturing companies should theoretically have some basis in earnings, it is probably the shareholders that are literally paying the price.

    • 0 avatar
      Old Man Pants

      “when the fascists were picking the winners”

      If I didn’t like you so much I’d hope you would meet some actual fascists.

      • 0 avatar
        Pch101

        If he knew what a fascist was, then he would have trouble looking in the mirror.

        It’s funny how the language that he uses to describe liberals is pretty much identical to the language used in Nazi propaganda to describe Jews, the handicapped and other supposed inferiors.

        • 0 avatar
          Old Man Pants

          If one-tenth the time & effort he spends on internet spewing went instead to reading *anything* from the vast ocean of painstakingly researched yet highly accessible popular histories of all that nazi/commie stuff….

          Well, all you can do is carefully pat his pointy little head and put down fresh newspaper.

  • avatar
    kosmo

    I love IC vehicles, but I suspect EVs are the future.

    Maybe the distant future, but somewhat hard to argue with.

    Not to say the road won’t be bumpy on occasion!

  • avatar
    Southerner

    So, a “genuine market test” would be a worst case scenario. Ha,ha,ha,ha!

  • avatar
    walleyeman57

    If all we had available were electric battery powered cars and someone invented the ICE and gasoline to fuel them they would be hailed as one of the greatest inventions ever. Range of up to 600 miles. Fuel up in 5 minutes. Drive across the country whenever you please.
    Don’t get me wrong, I love the idea of electric cars. I love the idea of instant torque. I like the simple motor design. I like that if you charged them with solar or wind, there is no pollution.

    So, the market should decide without our scarce tax dollars being used to pay people extra to buy one. If you want a vehicle that gets 100 MPG or 2 MPG that should be your choice.

    • 0 avatar
      orenwolf

      “So, the market should decide without our scarce tax dollars being used to pay people extra to buy one.”

      I’m really confused by this, so maybe I’m missing a weird US tax issue – these are tax credits, right? They don’t pay out on a refund unless you paid the taxes already, right? Or does it work differently in the US?

      I ask because if it works the way I think it does (that you only get your own money back), why are people up in arms about this versus every other tax credit in the tax code? I mean don’t people get tax credits for everything under the sun already? Do people who advocate against this credit also advocate people shouldn’t ever claim tax credits, period?

      • 0 avatar
        28-Cars-Later

        I’m not sure how it works on EVs but a credit is literally a “credit” if you qualify. For instance, a person qualifies for EITC if they meet the requirements found in the below link.

        https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-eic-or-eitc

        the credit is worth:

        “For tax year 2013, the maximum EITC benefit for a single person or couple filing without qualifying children is $487. The maximum EITC with one qualifying child is $3,250, with two children, it is $5,372, and with three or more qualifying children, it is $6,044.[3][4][5] These amounts are indexed annually for inflation. On December 4, 2014, The Atlantic reported that the EITC will reduce revenue to the federal government by about $70 billion in 2015.”

        https://en.wikipedia.org/wiki/Earned_income_tax_credit

        • 0 avatar
          orenwolf

          Ah, that explains it.

          In Canada, we have the concept of a “non-refundable tax credit”, which is a credit against your own taxes paid, but never paid out beyond your own taxes. I understand if the US doesn’t have that why it might ruffle feathers to give individuals that may have paid no taxes to begin with, other people’s tax money.

          Carry on. :)

    • 0 avatar
      bunkie

      Pardon the obvious hyperbole, but is being poisoned by your neighbor’s vehicle also your choice?

      It’s important to remember that, like it or not, everything affects everything else. It wasn’t too long ago that my hyperbolic statement wasn’t so hyperbolic and the changes brought about to mitigate the harm were fiercely opposed by people making the same argument for freedom of choice.

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