In Texas we call that “DRT – Dead Right There” – Stu Turley
In the early days of the push for electric vehicles to replace gas-powered vehicles, they were novelties used for virtue signaling. As the push from government leftists ramped up quickly, millions worldwide jumped onboard willingly or reluctantly as it appeared that an EV future was inevitable.
Now that the market has matured, challenges are evident. Electric vehicles are unreliable. They are expensive to repair. The infrastructure to power them is insufficient today even though they only make up a tiny percentage of what’s on the road. Behind all of these roadblocks is an underlying reality: Far fewer people are joining the climate change cult than the powers-that-be had hoped.
Force-feeding us through regulations, incentives, and massive ESG bullying campaigns have failed miserably. Now, the chickens are coming home to roost for a fearmongering industry that couldn’t deliver on any of their promises. Is the “Electric Vehicle Revolution” dying?
No. It was dead before it got here.
Audi is joining U.S. automakers in slashing production of EVs. On the retail side, Ford dealers are backing away from even offering EVs. Reports of coming challenges for EV drivers are making the Christmas news cycle. This isn’t the future that climate change cultists were promised and it’s impacting faith in the movement.
Below is an article highlighting the worst indicator of them all: Lack of used EV enthusiasm. Vehicles with staying power enjoy popularity through all stages of existence. They sell well when they’re bought or leased new. They then sell well again as program vehicles, certified pre-owned, or plain old used cars. Some, particular trucks, enjoy extended usefulness as owners sink money and effort into keeping them on the roads for decades. With EVs, none of those scenarios are panning out. The results have been predictable as EV graveyards have started popping up across the western world. Here is the article generated from corporate media reports by Discern Reporter…
Demand for Used Electric Vehicles Is Even Lower Than for New
The transition away from traditional combustion engine vehicles is encountering a new challenge: reluctance among buyers to purchase used electric vehicles (EVs), thereby undermining the market for both new and pre-owned EVs.
In the $1.2 trillion secondhand market, prices for battery-powered cars are declining more rapidly than their combustion-engine counterparts. Several factors contribute to this trend, including the absence of subsidies, a wait-and-see approach for better technology, and ongoing deficiencies in charging infrastructure. Intense competition, fueled by Tesla Inc. and Chinese models, has triggered a price war, impacting the values of new and used cars alike, thereby jeopardizing profits for companies like Volkswagen AG and Stellantis NV.
As the majority of new vehicles in Europe are leased, automakers and dealers are grappling with plummeting valuations, leading to increased borrowing costs to recoup losses. This strategy, in turn, is dampening demand in European markets that were at the forefront of the shift away from fossil fuel-powered vehicles. In response to declining resale values, major buyers of new cars, including rental firms such as Sixt SE, are scaling back on EV adoption.
The challenges are expected to escalate next year when many of the 1.2 million EVs sold in Europe in 2021, under three-year leasing contracts, enter the secondhand market. How companies address this issue will be crucial for their financial performance, consumer confidence, and the broader goal of decarbonization, aligning with the European Union’s plan to phase out sales of new fuel-burning cars by 2035.
There is a lack of demand for used EVs, posing a hindrance to the overall cost-of-ownership narrative. Companies can divert EVs to mobility offerings and ride-sharing startups, but limited demand from these businesses remains a challenge. Unwanted combustion cars often end up in Africa, but the poor charging infrastructure in that region restricts the market for EVs. The situation in China, where lucrative subsidies led to abandoned EVs, serves as a cautionary tale.
Early signs of trouble emerged when Tesla aggressively reduced prices earlier this year, initiating a price war that eroded profitability for some and exacerbated losses for others. Secondhand EV prices experienced a significant decline, around one-third, in the year through October, compared to a mere 5% decline in the overall used car market.
In Germany, a key auto market, the slowdown in new EV orders is leading to a surplus of used models, impacting the secondhand market. This trend is particularly pronounced for EVs, with more units remaining on lots for extended periods, categorized as “risk inventory.” Prices need substantial reductions to attract customers to consider EVs, creating challenges for dealers and manufacturers.
Handling secondhand EVs presents a unique challenge as there are no standardized tests to determine the quality of a battery, which constitutes around 30% of an EV’s value. Manufacturers are exploring new battery technologies, such as solid-state batteries, to bring down costs, increase range, and facilitate faster charging.
Despite some EVs performing well in the secondhand market, consumer hesitation remains, and manufacturers are actively working on new technologies to address concerns. The uncertainty surrounding EV technology is expected to drive more customers toward leasing rather than purchasing, accelerating the shift from ownership to usage.
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