What are the long-term costs of electric vehicles (compared to gas-powered cars)?

Electric Costs vs. Gas

Both gas and electric cars require some math to understand what you are really paying. To be fair, your gas-powered vehicle will feel easier in part because gas stations list the price of gas, and your miles per gallon are easy to track.

The cost to charge your vehicle at home will be mostly dependent upon the price you pay per kilowatt hour. While the amount could literally be listed clearly on your power bill, you can also do a little math and divide the number of kilowatt hours used in a month by the total cost of your electric bill, minus natural gas!

A couple of key things to know here: the average cost per kilowatt per hour in the United States is $0.16. The average electric car uses about three to four kilowatts per mile.

With the average American driver going around 13,000 miles per year, you can expect to spend $60 per month on electrical to power your vehicle.

You should also note that the price to charge on a private, paid network is higher than charging at your own place, and a bit more money to charge faster, often in until 45 minutes. 

Just like gasoline, the amount you’ll pay depends on location. While we like to remain objective when discussing vehicles, it’s clear that based on current gasoline and electric prices, an electric car should carry a lower month-to-month recharging and refueling cost. 

Repairs and Maintenance

While more modern vehicles often required fewer service appointments over the last couple of decades with the formulation of synthetic oil, some drivers feel like they get nickel and dimed by small things over the course of their vehicle’s lifetime with the replacement of spark plugs and anything else that might cause performance issues or an engine light.

Electric vehicles require less maintenance, but, and this is a bit of a big but, the repairs can be more expensive by $100 or more. A key difference here is that the electric vehicle, which doesn’t see the service department as often, is more likely to need a bigger repair, though less frequently.

The battery is one of the biggest questions from both dealers and drivers. Is the battery going to need to be replaced? Will it offer miles over the years? While that article asks questions about the pricing for preowned EVs, it reflects the less-than-predictable nature of the long-term use of batteries.

To be completely fair, gas engines tend to cost more as they age, so this isn’t exactly a new problem!

So what should I do as a car dealer selling electric vehicles?

Educate your customers to the best of your knowledge. Ask the customer questions about their vehicle use and listen for areas where the customer might be concerned about long-term costs.

Help them learn what to look for in terms of when to bring their electric vehicle in for service. While it won’t need many if any fluid checks, you’ll want to keep an eye on the chassis, battery, power steering, electric motors, brakes, and some other items. Filters and suspension are important too!

You can also talk about gas and electric costs in a similar manner to speaking of gas mileage: The range or miles per gallon ratings aren’t guaranteed and are based on normal, calm driving.

Conclusion

Electric and gas-powered vehicles have different costs and ways of measuring costs. Long term, electric vehicles will likely need less frequent but potentially large repairs than gas-powered vehicles. On the plus side, an electric car driver will likely see the service department less, while paying less for electric charging depending on the price of electricity in their area.

The post Evaluating the long-term costs of electric vehicles: pros and cons appeared first on CBT News.

• “The nation’s fully-electric cache is reportedly up by 350 percent this year, with nationwide inventory sitting at over 92,000 vehicles. That translates to a 92-day supply of EVs, which is almost twice the current average for gas-burning cars.” (Jalopnik)
• “Genesis, the Korean luxury brand, sold only 18 of its nearly $82,000 Electrified G80 sedans in the 30 days leading up to June 29, and had 210 in stock nationwide — a 350-day supply, per Cox research.” (Axios)

But when you look closer at what’s buried in these headlines, some trends emerge.

Electric Cars or Luxury Cars?

Many articles use luxury electric car trends to diagnose electric car demand. Frequent mentions include:

• Genesis G80 starting at $82,000 
• GMC Hummer EV starting at $100,000
• Audi’s Q8 e-tron starting at $74,400 

Auto News points out that EV registrations for other high-end brands, such as Lucid ($94,550+) and Porsche ($111,700), are stagnating this year, too. 

In other reports, the numbers are clear. OEMs are increasing their production of luxury vehicles, eliminating budget priced models, and the price of new cars is rising. The same goes with used cars – the lower the price, the less inventory. With soaring interest rates, it’s harder and harder for people to afford cars – even if they want them. 

Overall market data drives home the mismatch between available inventory and increasing sales. According to J.D. Power, in June, EVs were 8.6% of retail sales and 6.7% of available inventory. What this means is that, especially with the shift to direct-to-consumer sales, inventory is not a great representation of overall demand, or even purchases.

Tax Credits Matter

There is evidence that shoppers still want EVs, but are looking for a lower price. Doom and gloom headlines don’t mention that cars like the Model Y, the price of which recently dropped from $67,440 to $49,380, doubled its deliveries so far in 2023. And that the Chevrolet Bolt saw sales grow from 360 in Q1 2022 to 19,700 in 2023 when it became eligible for the federal tax credit and dropped the starting price. In fact, GM reports that most of its EV inventory in-transit is already sold, with the exception of the pricey Hummer EV. 

The effect of the federal tax credit cuts both ways: Kia and Hyundai, which are known as affordable brands, lost access to the $7,500 credit this spring and have seen their sales numbers plummet. However, Hyundai has pivoted its strategy to leasing, which has preserved some of its new-found lead in the EV world. A section of the Inflation Reduction Act allows commercial entities to pass through the $7500 credit to lease customers. 

Cost per Range Mile

The one example that jumps out is a surplus of the once hard-to-find Mustang Mach-E, which has a mid-range sticker price ($42,995 – 59,995) but a relatively high cost per range mile. Cost per range mile is a metric that we use to discuss how much of the purchase price of an EV goes to the range, as opposed to things like speakers, leather seats, and brand recognition.

From what we’ve found in our research, shoppers looking for utility, particularly those new to electric, are likely to prioritize cost per range mile. 

For the Mach-E, the cost per range mile is between $172/mi and $222/mi. For comparison sake, both the Volkswagen ID.4 Pro, the Model Y Long Range, and most Model 3 trims have a lower cost per range mile (around $153/mile) – and also qualify for the federal tax credit. 

Similarly, the entry-level Audi Q4, which starts at $49,800, is also flagged for being stuck on dealer lots. It falls into the same middle ground as the Mustang Mach-E. Although the cost per range mile on the Q4 is $187/mile, Audi is seen as a luxury brand, and many budget shoppers may not even look at the brand. 

A Maturing Used EV Market

I spend a lot of time researching the used EV market in order to produce Recurrent’s Quarterly Market Reports, and what I’m seeing on the ground is that the used cars are already undergoing a much-needed course correction in pricing. Since the used market is not as constrained by MSRP, it can respond to market demand for affordable, entry-priced vehicles. 

Since July 2022, the Recurrent Price Index, which tracks a bundle of common and widely available models, has fallen 28% to $30,330. The share of used EVs priced under $30,000 has risen 200%, with nearly 40% of the used market below that price. As a comparison, the average listing price for a used gas car right now is above $27,000.

My guess is that as supply for high-priced EVs piles up, many traditional OEMs follow in Tesla’s footsteps and slash prices until demand picks up. Ford is already doing so with the F-150 Lightning and the Mustang Mach-E, although CEO Jim Farley worries about accelerating depreciation for those customers who already bought their electric ponies.

Other EV market experts at Recurrent expect prices to balance themselves for the rest of 2023.

“As for pricing, the used market will continue to go down on all EV fronts. No chance it doesn’t. Tesla prices will decrease due to market influences, not brand woes. Other OEMs will continue to see a lack of demand because people don’t want their cars [as compared to cheaper Teslas]. And they won’t become appealing until the prices warrant people’s attention – frankly, that’s what we need to increase adoption at a higher rate in the used market” – Michael Wheatley, Recurrent

What do you think? 

• Should OEMs lower prices, even if it means upsetting customers who may have purchased an EV at a higher price in 2022 or 2023?
• How much do federal tax incentives sway new – and used-car purchases?
• Is price per range mile a good metric when it comes to understanding demand, particularly for economy EV shoppers?

Let me know in the comments or on Twitter/X @recurrentauto. 

The post Are American shoppers really over EVs? appeared first on CBT News.

The automotive industry is evolving once more as artificial intelligence transforms how car dealers and manufacturers conduct business and serve customers. One of the thought leaders at the forefront of this shift is Kevin Frye, marketing director at the Jeff Wyler Automotive Family.

Frye has spent more than 15 years pioneering new technologies in the dealership, supervising the integration of numerous innovations that have boosted sales, increased productivity, and, most importantly, improved the customer experience. But of all the inventions he has encountered throughout his career, artificial intelligence is proving to be one of the most significant and most transformative. On this episode of Inside Automotive, CBT News anchor Shyann Malone sits down with Frye to discuss AI and what it means for the retail automotive sector.

Key takeaways

1. Artificial intelligence, especially in the form of generative AI, offers users the ability to analyze data in a short period of time. As software developers create AI tools tailored specifically for car dealers, Frye foresees the technology being used to create daily reports for managers and store owners.

2. AI has the potential to drastically improve efficiency across departments in ways dealers may have yet to consider. Frye suggests that artificial intelligence could be used to track car dealer inventories and automatically bid for used vehicles at auction.

3. The adoption of artificial intelligence is also likely to change the way customers interact with car dealers. Since many AI platforms can provide results similar to a search engine, Frye believes that dealerships will need to adopt new SEO techniques to begin appearing in computer-generated responses to user queries, similar to how websites appear in Google search results.

4. Artificial intelligence could significantly change how CRM (customer relation management) and CDP (customer data platform) software identify leads and track information. Car dealers may soon be able to see the buyer journey in real-time with software that can recommend the best option based on a consumer’s preferences.

5. Artificial intelligence will be especially beneficial for smaller car dealers who lack the resources of larger auto groups. Since AI platforms reduce labor on many fronts, managers may also be able to invest more time into growing their business and attracting new customers.

The post The future of artificial intelligence in the dealership — Kevin Frye | Jeff Wyler Automotive Family appeared first on CBT News.

The unfolding drama between the United Auto Workers (UAW) and the Detroit 3 is not so different—possibly spectacular in its intensity but with ramifications that echo throughout the American economic landscape. This isn’t a mere corporate face-off—it’s an epic clash with some potentially damaging results.

The UAW’s Crusade: An Uprising or a Last Gasp?

Enter Shawn Fain, whose rise to the UAW president seems scripted for the big screen—it probably was. Barely securing his leadership, Fain has since been relentless, verging on the militant.

Admittedly, I’ve seen unions as market saboteurs. Yet the simmering discontent among workers staring into the maw of an AI-dominated future is hard to ignore. Fain’s take on the EV paradigm shift? Less a warning, more a battle cry. Automation isn’t a specter on the horizon; it’s a pressing threat. The wage disparity at the Ultium Cells LLC factory? It’s not just numbers—it has the sound of a declaration of war.

The whopping $10-$16 less per hour wage chasm at the Ultium Cells LLC factory compared to other GM work sites? More than a concern—it’s an outright insult. While the boardroom elites whine over vintage wines, it’s the ground troops, the workers, who bear the brunt of corporate decisions while facing potential annihilation on the altar of ‘progress’.

The Automakers: Visionaries or Profiteers?

Conversely, the automakers seem more entangled by the future than shaping it. A pivot to EVs? It’s a Herculean feat, especially when it seems 94% of their dwindling customer base not only didn’t ask for them, but they’re also not signing up to purchase them.

Their cries of hardship might evoke sympathy if not for the audacity of the UAW’s 46% wage increase demand. It’s audacious, but isn’t it time the behemoths got a wake-up call?

And the CEOs? Their eye-watering salaries, while perhaps a testament to the risks they bear, also smell of corporate gluttony and imbalance. With a nearly $29 million paycheck like Ms. Barra has, couldn’t the collective OEM C-suite not spare a bit to address workers’ demands? One wonders.

The Presidential Meddling: Savior or Opportunist?

And then there’s the $58 million net worth ‘everyman’ President Biden, leaping into the fray. He’s reminiscent of a character seeking to mediate cosmic battles. His calls for unity? Perhaps they’re more about the ballot box than genuine economic concerns.

His romantic “win-win” vision? Think of what “win-win” has meant in your work life. Now you see why that idea seems as elusive as peace in a fictional universe torn by conflict. Is this heartfelt diplomacy or mere shallow political theater?

And can the Biden administration really help? Or should we remember these words from Ronald Reagan, who reminded us that “the nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’”

The Inferno Ahead: Who’ll Emerge from the Ashes?

What’s unraveling is not a mere disagreement—it has all the marks of a cataclysmic uprising. A reflection, perhaps, of the greater societal chasms that underpin our society.

Unions, once the guardians of the working class, now teeter on the edge of obsolescence. Yet their passionate outcry in our digital age is impossible to ignore.

Automakers, despite their grandiose claims, appear caught in a storm largely of their own making, enabled by a short-sighted government.

As the climax nears, there’s a critical takeaway: Much like the innocent bystanders in Transformers and The Avengers, it’s the American taxpayer who might bear the heaviest burden from the fallout of this corporate clash.

And here’s another inconvenient truth: Robots and AI don’t pay taxes or buy cars, houses, food, and clothing to support the economy.

So, we’re at a pivotal juncture. This time, the tectonic clash of industry and labor isn’t just a skirmish, and we’re not mere spectators; the aftermath of this epic battle has the frightening potential to damage the very foundations of our economy.

The post Opinion | Rethinking the UAW and the Detroit 3 Saga: An Avengers level showdown with real-world stakes appeared first on CBT News.

What do electric car buyers want to know?

Range

As you might suspect, the vehicle’s electric operating range is among the chief concerns for electric car buyers. Most American drivers have been in a routine since they are old enough to remember, that gas stations are frequently located off the exits of most highways big or small. Filling up takes just a few minutes unless you have a big truck, a boat, or both at the same time.

So especially for people who commute every day, knowing the range of the vehicle is very important. Also important is how weather impacts the vehicle’s electric power range. Since colder and hotter weather does impact the range, they want to know how much range is taken off when they want to use the heater.

For such a big purchase, this is really important – due in part to the lost equity of finding a vehicle that doesn’t fit your lifestyle. Knowledge of charging ranges – and honesty in charging ranges, is something salespeople should be equipped with.

If I were to buy an electric vehicle today, I would want one that exceeds the ability to drive to the nearest metro area and back on one charge. Why? What if I have to commute some day? I don’t want to have to trade my vehicle in just because I moved or started a different job.

Cargo Space

While not the biggest challenge for most electric vehicle buyers to overcome, having cargo space is generally helpful. Should you take on a new hobby or kids’ activities and decide you want more space, having the room to throw a sports bag or two in the area would be rather helpful.

The challenge with cargo space is thinking about all the things you could carry. Consider a roof rack, too.

How to charge

Admittedly, the concept of plugging your vehicle is one that won’t change and won’t be a challenge for even the most technically challenged customers. Understanding where to charge and different levels of chagrin are rather important, though.

Salespeople will want to be informed on what charging options are available in-home or in-garage for customers. They should also be able to explain to a customer how to charge their vehicle at an apartment. Knowing how long a charge will take will also be very helpful – and whether or not the customer can control the charge time!

Available Rebates/Credits

Some of the rebates available for an electric car don’t actually come from the dealership, but as tax credits when you complete your yearly report to Uncle Sam. Note that in most cases, salespeople aren’t expected to have extensive knowledge of individual tax situations, but should know which vehicles qualify for a tax credit, how much, and how long those credits last.

This is a bit different from the discounts people (used to?) received on cars, trucks, and SUVs in that they aren’t automatically subtracted in the dealership or within the finance office.

Conclusion

Electric vehicles represent a change, and often a positive one, to most electric vehicle buyers. By showcasing your EV knowledge, you can help electric car buyers have a more pleasant and effective experience on your sales floor.

The post What do electric car buyers want to know before the purchase? appeared first on CBT News.

Powering Performance: Battery Management Systems

A surprisingly concerning McKinsey report flagged a possible 40% drop in aftermarket parts revenue for traditional Internal Combustion Engines due to electrification’s surge. This shift illuminates the urgent need for dealerships to deepen their understanding of EVs.

Central to this is the Battery Management System (BMS), ensuring optimal battery performance, range, and safety. Yet, the susceptibility of Lithium-Ion batteries to overheating is a concern. Dealers must therefore gear up to address safety concerns and the importance of regular battery maintenance checks.

Steering the Future: Autonomous Driving Features

The automobile dream of the 21st century, autonomous vehicles, is rapidly transitioning from the realm of fantasy to everyday reality because of software. OEMs like Tesla and Ford—with its top-rated Blue Cruise— are leading the charge, hoping to make self-driving features accessible to everyone.

As these technologies advance, occasional hiccups are inevitable. Recognizing this, dealers must proactively arm themselves with information to answer questions about safety, operational functionalities, and possible system upgrades.

The Infotainment Battleground: Google, Apple, and OEMs

Today’s vehicles offer more than just transportation; they promise an immersive experience. Partnerships like that of Google and Mercedes and Apple’s renewed focus on CarPlay are setting the stage for an intense showdown with Original Equipment Manufacturers’ (OEM) in-house systems. The Wall Street Journal aptly called it “a battle for the car’s soul.”

In this tech-dominated era, dealerships must excel at demonstrating and educating customers on these integrated technologies and options as they become available. Especially if it means bringing a car in for a software upgrade. A customer’s drive isn’t just about reaching a destination; it’s about the journey enriched with entertainment, information, and unparalleled connectivity.

Unlocking Potential 

Tesla’s flexible battery and performance upgrades are redefining the boundaries of vehicle ownership. Should other OEMs hop on this trend, dealerships will need to adapt swiftly. Letting customers know about potential software boosts could bolster the dealership’s bottom line.

Cybersecurity: Safeguarding the Smart Vehicle

As vehicles transition into intelligent, connected hubs, they become enticing targets for potential cyber-attacks. However, every challenge can be flipped into an opportunity.

Dealers can pivot by guaranteeing and promoting top-tier cybersecurity measures as a unique selling proposition. Add-ons like Elo GPS and LoJack could further enhance a vehicle’s security footprint, offering customers much-needed peace of mind.

Continuous Evolution: Over-the-Air Updates

The near future may witness cars that upgrade themselves without a pit stop at a service center. While OTA updates spell convenience for customers, they also disrupt traditional dealership service models.

The antidote? Dealerships can emphasize routine physical maintenance’s undying importance, from brake servicing to tire check-ups.

Navigating the Digital Drive

The intricate dance between EVs and software is crafting a new narrative in the automotive industry. Dealerships, at this pivotal juncture, can transform challenges into substantial opportunities.

By offering a tailored in-store experience, detailed insights on the total cost of ownership, and unmatched post-sales support, they can retain a competitive edge. Forward-thinking dealerships can pave the way in our electrifying and hyper-connected automotive marketplace by merging the best of both digital and traditional worlds.

The post The role of software in EVs: opportunities and challenges appeared first on CBT News.

For dealerships, with the help of OEMs, this means more than just updating inventory—it’s about reimagining the entire showroom experience. Let’s dive into how dealerships can redesign their spaces to cater to the new era of electric vehicles (EVs) and meet consumer expectations.

Charging Infrastructure: More Than Just a Power Point

The most apparent change for an EV-ready dealership is the installation of charging stations. If you’re not supporting EVs, why should your customer? But consider this: rather than a simple plug-and-charge station, what if the charging space was a lounge? We’re not suggesting an Audi-sized charging lounge. However, dealerships can adopt some of their ideas.

Picture an expanded, comfortable seating area with Wi-Fi, coffee, and workstations. Lincoln is adopting some of these ideas at their Experience Centers that could be put into their dealerships. Customers can relax or catch up on work while waiting for their vehicles to charge. It’s about selling a branded experience, not just electricity.

Interactive Displays: Bringing Tech to the Forefront

Buying an EV is as much about the technology as the vehicle. Dealerships, with the help of OEMs, can leverage this by setting up interactive displays. These kiosks can educate customers about battery technology, range, charging infrastructure, and the environmental benefits of EVs. A well-informed customer is more likely to make a confident purchase.

Test Drive Routes: Showcase EV Strengths

One of EVs’ most significant selling points is their smooth acceleration and near-silent operation. When setting up test drive routes, ensure they allow potential buyers to experience these qualities.

Include a mix of city and highway driving and, when possible, a hill or two to demonstrate regenerative braking. Every test drive should make the EV’s benefits palpably clear.

Service Areas: Transparent and Educational

Of course, EVs come with a different set of maintenance needs compared to ICE. However, regardless of the type of vehicle sold, establishing transparent service areas where customers can see technicians at work would be an excellent idea.

Offer tours or workshops where buyers can learn about essential EV maintenance and care. By demystifying the process, dealerships can alleviate some consumers’ apprehensions about EV upkeep.

Green Building Design: Walking the Talk

Consider the power of a statement when your dealership not only sells EVs but is also a beacon of sustainability. Incorporate green building designs like solar panels, rainwater harvesting, and energy-efficient lighting. It reinforces the message that your dealership is fully invested in the future of sustainable mobility.

Flexible Dealership Design: Anticipating the Future

Under the government timeline, EV purchasing and usage should be rapidly evolving. Today’s charging stations might be obsolete in a few years, replaced by faster and more efficient models.

So, designing dealership spaces to be flexible and adaptable to future technological advancements is essential. Modular designs, which can be easily updated or reconfigured, will ensure your dealership remains ahead of the curve.

Holistic Customer Experience: Beyond Just Cars

Finally, reshape the dealership into a holistic space that’s a destination. Introduce a café that offers organic goods or a small bookstore that stocks titles on technology, sustainability, and the future of transport. Create a community hub for discussions, workshops, and events centered around EVs and green technology.

It Could be Time for a Makeover

The rise of electric vehicles offers an unprecedented opportunity for OEMs and dealers to redefine dealership design. By creating an environment that’s not just about selling cars but promoting a sustainable and tech-forward lifestyle, dealerships can attract and engage a new generation of eco-conscious, tech-savvy buyers.

As the adage goes: adapt or get left behind. In the EV era, adaptation means embracing the electric revolution, both in the cars you sell and the experience you offer.

The post Rethinking dealership design for electric vehicles appeared first on CBT News.

At first glance, the idea seems straight out of a futuristic novel. PG&E’s proposal involves leveraging the batteries of electric vehicles during their charging cycles to stabilize the grid during peak demand times.

The Ford F-150 already offers bidirectional charging and GMs recent announcements that every GM EV will have this feature by 2026 present an example of how vehicles can act as backup power sources for households during outages. However, PG&E’s vision goes beyond isolated instances—it aims to harness the power of all EV batteries to prevent a grid collapse.

Harnessing the Idle Potential of Owners’ EVs

The logic behind this initiative is grounded in the observation that electric vehicles mostly remain unused for about 95% of the day. During these idle periods, energy stored in EV batteries could be repurposed to supplement the grid’s demands. According to the ABC News report, PG&E CEO Patricia Poppe views this “vehicle-to-grid” energy transfer as an unconventional yet promising strategy to preempt blackouts.

California’s state machinery also supports this innovative proposal. Lawmakers in Sacramento are expediting the legislative framework to make this vision a reality. Under SB 233, all new EVs sold in California by 2030 must come equipped with bidirectional charging, a technology that allows EV batteries to power homes, businesses, or the grid.

More Costs for EV Owners

However, the proposal is not without its challenges and critics. Detractors argue that this proposal would increase expenses for consumers, reduce the longevity of their already high-priced vehicles, and the sole advantage offered to them would be a reimbursement for a fraction of the initial charging costs—costs they’d incur once more when recharging after PG&E depletes the power.

Questions also arise about the consequences of this strategy on electric vehicles. If California’s grid routinely taps into EV batteries, will vehicle owners find their cars frequently drained when they need them the most?

Moreover, the economic ramifications for EV owners are concerning. Although PG&E may compensate users for the electricity drawn from their vehicles, the frequent charge-discharge cycles could reduce the lifespan of their batteries. Batteries, after all, have a limited number of charge cycles before their efficiency wanes. This could result in EV owners shouldering the costs of premature battery replacements—a proposition that is hardly enticing.

A Problem and a Solution No One Asked For

This situation epitomizes the complexities of pushing green energy initiatives without adequate infrastructure. While the intent behind such initiatives is commendable, the execution and broader implications can sometimes lead to more challenges than solutions. In trying to address one issue, another is inadvertently created.

So, while PG&E’s proposal to harness EV batteries is a testament to innovative thinking, it’s essential to consider its long-term viability and impact on EV owners. As California seeks sustainable solutions for its grid challenges, it’s crucial to ensure that the remedies proposed do not exacerbate existing problems or create new ones. After all, innovation, while valuable, must also be pragmatic and sustainable.

The post Opinion | California’s power grid conundrum: are EV batteries the solution? appeared first on CBT News.

Electric Vehicles (EVs) are the future, and we’ve arrived there. The industry brings with it environmental benefits, economic opportunities, and infrastructure development. EVs even have the potential to promote equity and improve community mobility options.

Let’s look closer at those benefits. EVs help reduce greenhouse gas emissions and air pollution, which has positive environmental impacts and contributes to combating climate change. An expanding EV industry brings job growth, innovation, and economic development in areas related to EV manufacturing, infrastructure, and technology, and drives investments in charging infrastructure like public charging stations. EVs can help reduce transportation-related emissions in historically disadvantaged areas and provide cleaner mobility options for those who may not have access to private vehicles.

Benefits notwithstanding, convincing people to buy electric cars is key to the industry’s success, and EV credits – tax rebates provided by the Federal Government – make that possible for more people. According to IRS.gov, “If you bought a new, qualified plug-in electric vehicle (EV) in 2022 or before, you may be eligible for a clean vehicle tax credit up to $7,500 under Internal Revenue Code Section 30D.”

Critics argue that EV credits benefit higher-income individuals, exacerbating existing socio-economic disparities, and may lead to a loss in tax revenue, potentially burdening taxpayers who don’t benefit from the credits. They claim that the cost of implementing and maintaining these credits could outweigh the economic benefits and that focusing on charging infrastructure may divert resources from other sustainable transportation alternatives, such as public transit or cycling infrastructure. 

So, are EV credits the way to go? Or do we buy ten limes when we only need two? 

Rome wasn’t built in a day. Early adoption of technology is almost always led by those to whom it is most accessible, and credits can open that umbrella wider. EV credits drive adoption, which drives benefits, which drives more adoption. Credits make more EVs more affordable for more consumers by reducing the upfront cost. The greater the adoption, the faster the price drops. And greater adoption leads to increased overall fuel efficiency and decreased reliance on fossil fuels. Before you know it, it’s the year 2030 and, according to the Bureau of Labor Statistics, more than half of us are driving an EV.

Rather than expand the divide, EV credits have the ability to promote equity by making electric vehicles more affordable for lower-income individuals and communities. And expanded charging infrastructure can help address range anxiety and enhance convenience for EV owners, facilitating the transition to cleaner transportation, including public transit.

As for cycling infrastructure, we can bike and EV at the same time. It’s the penny-perfect solution.

The post EV credits – 
Are they worth it? appeared first on CBT News.

The Pricey Aftermath of the Pandemic

The economic turbulence caused by the pandemic brought with it inflated prices. Some dealerships, responding to supply constraints and surging demand, foolishly increased vehicle prices, often significantly.

OEMs aren’t above their own pricing manipulation. GM wants to keep its sales prices closer to MSRP and profit margins high by keeping production low.

While this may be understandable from a short-term business perspective, this move has alienated many loyal customers who feel they’re being taken advantage of in an already challenging time.

The ICE Customer: Forgotten, But Not Gone

There is an incentivized momentum behind electric vehicles. However, amid this manufactured EV enthusiasm, a significant portion of the consumer base – those average-income Americans loyal to affordable ICE vehicles – feels left behind.

Reuters says, “boosting U.S. EV sales above the current 7% market share level will be more costly and difficult than expected, even with federal and state subsidies.”

So there’s a potential 93% of customers who won’t necessarily seek out EVs. How can consumers be loyal if they can’t buy what they want? And there’s growing sentiment that the affordable, and reliable ICE vehicle is being sidelined as if it’s part of a plan to take away the average customer’s personal transportation entirely.

The Perils of Electric Vehicle Volatility

With its notable loyalty figures, Tesla offers a promising view of EVs thanks to the vision of Elon Musk. Yet, the broader EV market has its challenges.

Consumers face not only the typical hurdles associated with adopting new technology but also significant price volatility. While it may be acceptable in consumer electronics, such fluctuations in the automotive realm, like sudden significant price drops, only serve to dishearten and dissuade potential loyalists.

Diversity on the Rise, But Are We Listening?

The auto market’s evolving consumer base, notably with an uptick in ethnic buyers, is not just a footnote. It’s a clarion call for brands to adapt and address diverse needs. Brand loyalty in this age requires more than just lip service and a photo; it demands genuine engagement with varied consumer preferences, from ICE to EV and beyond.

A Plea for Balance in Power Options

Governmental intervention, particularly the pronounced push towards EVs, warrants scrutiny. While the aim of promoting sustainable transportation is commendable, it’s vital to recognize the significance of choice in a market that’s divorced from an agenda.

OEMs should champion a balanced approach, recognizing the value of not just EVs but also alternative technologies like hydrogen and support of biofuels.

Focusing solely on one, at the detriment of others, won’t cultivate loyalty but might rather stifle it. To mindlessly follow a narrative never leads to a good result.

Navigating the Crossroads of Brand Loyalty

The declining brand loyalty statistics are more than numbers; they reflect profound shifts and challenges within the automotive industry. As we steer toward the future, it’s imperative to remember the origins and values that shaped the industry.

A balanced, inclusive, “something for everyone” approach has historically been more than just a wise strategy; it’s a roadmap that caters to all, fostering a stable, dedicated consumer base and paving the way for a more loyal future.

The post Opinion | We need to address declining brand loyalty in the EV era appeared first on CBT News.