EVs in America: Stuck At 7%

Tesla, GM, Northvolt, Charge, AESC, Electrify America, LFP, Wrangler PHEV

Aug 29, 2023

EVs in America: Stuck At 7%

China is rocketing past 30%. Europe has achieved a solid 15%. America, at 7% penetration, is looking like an also-ran in EVs.

What is the holdup?

Product choices are still thin. Just 5 EV models make up 73% of sales.
Quality: Automakers like Ford and GM and VW are experiencing rough ramp ups with batteries and software.
Expensive: New EV stickers average more than $60,000.
Driving habits: Americans like bigger vehicles and drive them further.
Charging infrastructure remains mediocre.
Battery weight: EVs are 700 pounds heavier than their ICE equivalents.
Grid: America can’t handle a sharp rise in EV charging today, anyway.
Culture: “Why buy an EV?” ask my friends in Michigan. “Why not?” say my neighbors in California.
Politics: Does it make sense to buy an EV when batteries are an industry dominated by China?
Environmentalists are bound to slow-walk licenses for mining and refining, which will stall improvements in supply chain efficiency.

Among these, the most important might be No. 4 - Driving Habits. Let’s be honest: Americans are infatuated with large vehicles. And they drive much further than people in Asia and Europe. That means they need a battery that will deliver longer range. And that means bigger and more expensive batteries.

Yes, LFP batteries can help in important niches like commercial vehicles for deliveries and in some drive-around-the-city cars like the Model 3.

But America will have a hard time getting to higher levels of EV penetration until there are technology breakthroughs like solid state batteries that deliver more range at a lower cost.

And that’s okay. Let the market have some say. Joe can buy a gasoline-powered F-150 for hauling stuff. Jane can lease a Prius hybrid. Pete can ride up in that Wrangler PHEV. And Christina can shine in her all-electric Hyundai IONIQ 6.

And all of us can still go to heaven.

Wrangler PHEV engineers are decent people, too.

Future EVs, Batteries, Charging

Electrics

Tesla Model 3 Highland. Today’s Model 3 starts at $37,500 in the US and just over $30,000 in China. The “Project Highland” Model 3 could debut in October at under $30,000. Link

If Tesla goes under $30,000, what does everyone else do?

Batteries

AESC - Don’t Call It Chinese. Ford’s proposal to partner with CATL created a firestorm of political controversy. But another Chinese battery maker is quietly getting entrenched in America. AESC, with operations in South Carolina and Kentucky, began as a Japanese company. In 2018 it was acquired by Envision, a giant Chinese company, and renamed Envision AESC. Now the company has reverted to the name AESC. Hmmm…. Link

Charging

Why Electrify America Gets An F. If you’re wondering why so many automakers joined Tesla’s charging network this year, John Voelcker has answers: “It’s hard to overstate the disgust and anger at Electrify America among virtually every person we interviewed.” Link

That dreaded pair of exclamation points.

Stellantis Adds Charge Enterprises. Maker of Jeeps, Fiats and Ram Trucks is partnering with Charge Enterprises for installations into its dealer network in the US. Never heard of Charge? How about Stellantis’ other charging partners: Vehya, Future Energy and AGI. Link

New Developments / Milestones

Tesla Passes Toyota in California. You read that right. And not just in electric vehicles but in total sales. Folks in Nagoya must be feeling a little bit uncomfortable. Link

Northvolt Gets A Fresh Billion. Europe’s most probing home-grown battery maker secured $1.2 billion in new funding from BlackRock, GIC Singapore and a Canadian pension fund. Total funding since 2017 now stands at $9 billion. Look for some of the new money to go into a plant in Canada. Link

UAW Calls Out Detroit CEO Pay. Union leaders want to know why Detroit 3 executive pay is so high while company share prices remain underwhelming. GM Chairman and CEO Mary Barra made $28 million in 2022. Jim Farley did well, too, earning $21 million. Carlos Tavares split the difference taking in a neat $24 million. Link

=============

Coming Up This Week. Don’t miss this week’s episode of the Driving With Dunne podcast. This will be Part II with my guest Jorge Guajardo, former Mexican Ambassador to China. Jorge will share his views on the why and how behind China’s automotive invasion of Mexico. Arriving Thursday.

=============

And…Your Weekly Modicum of Wisdom

“Summer is the time when it is too hot to do the job it was too cold to do last winter.” – Mark Twain