Having failed to lure enough Americans into electric cars, automakers — that is, automakers not named Tesla — have suddenly realized that Americans aren’t really buying cars, in any form. So they’ve unveiled a new strategy: To have any hope of challenging Tesla’s dominance, it’s going to take electric SUVs. Enough SUVs to fill every supermarket parking lot, tailgate party and school-pickup lane in America. And if those SUVs can’t do it alone, there’s always the great American pickup truck.
Yes, the next wave of EVs is coming, from Volkswagen, Ford, Nissan, Mercedes-Benz, Hyundai, Rivian and more. And this time they’re big enough to spot from several miles offshore, just how we Yanks like ‘em. So let’s set aside, for a moment, the relative inefficiency of an electric SUV or pickup, which are unavoidably taller, heavier and less aerodynamic than a conventional car, and typically equipped with energy-sapping AWD. In other words, these electric SUV’s are guaranteed to slurp more total electricity, and travel a shorter distance for every kilowatt of stored battery power, than a comparable electric car.
Clearly, that fact cuts no ice with Americans, as one vehicular survey of those aforementioned supermarket lots would prove.
So the settled science here isn’t man-made climate change — well, at least until all of California goes up in smoke like Cheech and Chong — but the simple fact that Americans prefer to sit way up high, and won’t look twice at anything that doesn’t include a tailgate (powered, of course) and AWD. Now that automakers have figured out the shapes people prefer in automobiles, the only thing left is to stuff those tall boxes with batteries and electric motors, right?
And here’s where I part company with many analysts in the electric space, if for no other reason than the fact that they’ve always been wrong before. To review, analysts have been trotting out the “tipping point” argument for more than a decade now, insisting that the world is “this close” to mass adoption of electrified cars. The reality on the ground, including showroom floors, is that roughly 95 million cars were sold around the world last year, and only 1.3 million of them were battery electric vehicles. Of course those sales are bound to improve, driven in part by strict emissions regulations in Europe and China. Though not here, where California (and states that follow its environmental lead) is feeling equally burned by its battle with the Trump administration over its longstanding right to set its own pollution rules/
Slow sales start for Audi e-tron (pictured) and Jaguar i-Pace may not bode well for electric SUV makers. (Photo: Audi)
Still, global EV sales could triple overnight, and they’d still hold less than five percent of the market. Those kind of facts haven’t stopped analysts and car makers from another round of rosy projections, which again seem heavy on the fertilizer.
Consider one example among the global giants. Volkswagen sold a record 10.8 million vehicles around the world last year. Just 40,000 of those were EV’s. Throw in a piddling 60,000 plug-in hybrids, and fewer than one in 100 VW’s are being powered by electricity. Now, as it looks to move past its debilitating diesel emissions scandal, VW plans to spend $34 billion over five years to add an electric or hybrid version of every car in its lineup. By 2030, VW projects that four of every 10 cars it sells with be electrified in some form. LMC Automotive is among analysts that have been bowled over by the big spending, to the point where I suspect they’ve bumped their heads: LMC projects that VW will become by far the world’s biggest electric car maker by 2025, with annual sales of some 1.4 million electrified cars. That’s 14 times more than it sold in 2018. It’s also more than three times Tesla’s projected worldwide sales in 2025 (roughly 450,000 cars), though the VW number includes plug-in hybrids. Still, good luck with that, especially when plug-in hybrid sales are stalled around the world; American fuel-economy standards are frozen in place; and VW has yet to test the market with the first of its new “ID”-branded EVs.
Besides the fact that no mammoth automaker has ever changed course — and its customers’ buying behavior — so quickly, other analysts’ claims don’t hold up to scrutiny. Max Warburton, an industry analyst at Bernstein, argues the combination of strict regulations, government incentives and falling battery prices have the market on the cusp of a revolution.
“These factors have come together to force the traditional industry to take electrification seriously — faster than we had previously expected,” Warburton told CNN. “This is now really happening.” (As opposed to, apparently, those previous times when it wasn’t really happening).
Volkswagen plans a $34 billion push into the electric space. (Photo: Volkswagen)
But the real shocker was Warburton telling CNN that falling battery prices will allow automakers to sell fully electric vehicles for less money than gasoline or diesel cars as soon as 2022. Those automakers had better hurry, because that’s just two years away, with 2020 cars already rolling into showrooms. And last I checked, those 2020 EV’s still cost thousands of dollars more than any comparable car, such as a $29,990 Nissan Leaf that’s a nearly $12,000 premium over a Nissan Sentra. Or, the electric Kia Niro. It’s a fine example of those newfangled electric SUV’s. It’s also priced from $39,845, or $15,300 more than the gasoline-only Niro, though a $7,500 federal tax credit softens the financial blow. So unless Nissan figures out a way to trim the Leaf’s price by $12,000 over the next 24 months — hold your wallet, but don’t hold your breath — these kind of unsupported claims aren’t worth the digital ink that’s being spilled over them. Equally troubling is the initial sales reception — lukewarm at best, icy at worst — for the electric crossover SUV’s that have reached the market, including the Audi e Tron and Jaguar i Pace. Tesla’s upcoming Model Y crossover seems certain to fare better, but again, Tesla is the only success story so far in terms of sales.
Look, I’m still bullish on electric cars, but there’s a difference between bullish and bullheaded. When automakers or analysts float dubious claims on EV’s, and always have to walk it back, it promotes cynicism and skepticism among consumers who are on the fence. Until some global automaker — Volkswagen, GM, Ford, anyone — delivers its first smash-hit EV, I’ll continue to argue that Americans do want electric cars. But only if they’re made by Tesla.