With EV sales finally slowing down a bit, we’re now seeing an avalanche of hit pieces on the electric vehicle market.
This isn’t surprising as the EV market has long had to grow against the backdrop of political and social backlash. This has been true from day one. And anytime something negative happens to the market, the anti-EV zealots come out swinging.
I actually remember when the Chevy Volt first hit the market, and Fox News reporter Eric Bolling decided to drive one into the city, and claimed he “got stuck” in the Lincoln tunnel.
If you know anything about the Volt, you know it’s actually a plug-in hybrid electric vehicle. Which means it runs on electricity until the battery gets close to depletion, then the car’s internal combustion engine takes over.
Bolling knew this, then made sure the battery was close to depletion before driving through the Lincoln tunnel. And while the car wouldn’t have been stuck in the tunnel, because the internal combustion engine would’ve kicked in, he went on a rant about how the car ran out of charge, and was therefore rendered useless.
Then there was the scandal that involved Top Gear journalist Jeremy Clarkson, who fabricated his test drive of the Tesla Roadster to make it look like the vehicle failed.
Uncle Elon wasted no time on setting the record straight by countering Top Gear’s false claims with some inconvenient truths for the dishonest reporter.
Check it out …
Top Gear’s Claim: “The Roadster's true range is only 55 miles per charge. Although Tesla says it will do 200 miles we worked out that on our track it would run out after just 55 miles.”
Fact: The Roadster was certified under the EU regulation for measuring electric vehicle range, at 211 miles. All tests are witnessed and certified by a neutral third party approved by the United Nations Economic Commission for Europe. In Tesla's case, the Department of Road Transport – Netherlands. Of course, a car driven aggressively will get reduced mileage, regardless of whether it's fueled by petrol or electricity, as Top Gear found. At the other end of the spectrum, through mindful driving, a Tesla owner achieved 313 miles on a single charge. To let either of these extremes represent real-world range is an incomplete analysis.
Top Gear’s Claim: One of the Roadsters ran out of charge and had to be pushed into the Top Gear hangar by four men.
Fact: Neither Roadster ran out of charge during Top Gear's tests, or even came close. We know because the Roadster records basic operating information. The show failed to mention that neither Roadster ever went below twenty-five percent charge. They actually staged the stunt of pushing it into the hangar.
Top Gear’s Claim: The Roadster's brakes broke, rendering the car not drivable.
Fact: During Top Gear’s drive on the test track, the fuse for the braking system's electric vacuum pump failed. But the brakes were operational and safe. The result was like driving a car without the convenient power brakes to which we’ve grown accustomed. Tesla's brakes, both with and without the fuse, must pass all safety tests, and they do.
I always thought it was odd when folks would become defiant about electric vehicles. After all, it’s not as if anyone’s being forced to use them.
I can’t tell you how many people have come at me, oftentimes in a hostile manner, about why they hate electric cars.
“The ranges are too short. I can’t drive very far in an electric car”
The average daily commuter doesn’t travel more than 60 miles per day. More than enough range for most of the electric cars on the road today that deliver between 200 miles and 330 miles per charge. Of course, if you do travel more than 200 miles per day, and the range of an electric car doesn’t suit you, then don’t buy one. But no need to get all hot and bothered over a car. It’s just so absurd.
“Charging them is inconvenient.”
You literally plug them in when you get home from work, and the next morning, they’re fully charged. No need to ever stop at a gas station. How that’s inconvenient, I’ll never know.
“The government subsidizes them.”
The government subsidizes everything related to transportation. From fuel to roads to infrastructure. Unless you’re walking, it is impossible to travel without using something that has been paid for by the taxpayer.
While I’d prefer to live in a world where an honest free market dictated what we drive and what we don’t, to criticize electric cars because they’re subsidized, but remain silent on everything else that’s subsidized, is an exercise in foolishness.
A Gift for Tesla (NASDAQ: TSLA)
To be sure, we’re starting to see all this recent pushback against electric cars again because, for the first time in years, EV growth is slowing. But like everything, the devil is in the details.
While EV sales are finally starting to slow down, internal combustion vehicle sales actually peaked years ago.
According to data from Bloomberg, in 2017, global new internal combustion vehicle sales reached 86 million.
That year will end up being the all-time high for deliveries of internal combustion cars. Sales dropped below 82 million in 2019, and in 2020 they plummeted to fewer than 70 million. ICE car sales will probably tick back up, but EVs are the predominant reason total auto sales will get back to where they once were sometime around the middle of the decade.
Of course, with companies such as Ford and Honda pulling back on their aggressive EV plans, this helps feed the rhetoric that EVs are somehow irrelevant now.
But nothing could be further from the truth.
The reality is that legacy automakers are going to have a hard time keeping up with Tesla and the Chinese EV makers because those companies aren’t burdened with union demands and unsustainable labor costs.
This is not a reflection of EV demand. This is a reflection of competition in a free market. And while Ford (NYSE: F), GM (NYSE: GM), and Honda (NYSE: HMC) may be trying to reconfigure their strategies on bringing EVs to market, they’re still going to make and sell them.
That being said, the recent UAW strikes have been a welcomed gift to Tesla, which continues to be the best-selling EV maker in the world.
Worth noting: Tesla’s Model Y became the best-selling vehicle in the world this past summer. Beating out all other internal combstion vehicles. And its Model 3 was ranked in the top 10.
Truth is, while EV sales may be slowing a bit, all the data indicate that the transition to vehicle electrification is still well underway. But this will be a make or break situation for legacy automakers in the U.S. Because if they can’t figure out a way to compete with Tesla and the well-funded Chinese electric car makers, they could be in for a world of hurt.
I don’t think that’ll happen, though.
The data is clear, and carmakers that aren’t able to capture a sizable chunk of the EV market within the next 20 years simply won’t survive. They’re not going to let that happen.