Month: June 2024

There’s quite a lot to follow lately with used electric vehicle prices dropping, and changeovers taking place at Rivian and Fisker.

For over a dozen years now, automakers have been producing electric vehicles on assembly lines in the U.S. — starting with the Nissan Leaf, Chevrolet Volt, and Tesla Model S. Other EVs had been rolling out in smaller numbers prior to that time, too, including the Mitsubishi i-MiEV and Tesla Roadster. But it would take a few years to see new battery electric and plug-in hybrid models launched from established OEMs and post-startups. EV sales would at first see impressive gains for the Tesla Model 3 and Model Y, and later from competitors.

Some of these models, such as the Chevy Volt and i-MiEV plus several commercial electric trucks and vans, have been pulled from the market. Automaker have had a difficult goal to meet: making EV models profitable and realistically tied to market demand and innovations.

Plug-in electric vehicles only make up about 1% of the total light-duty vehicles on U.S. roads, but the number is large enough to track its impact on used vehicle market values; and other parts of vehicle lifecycle analysis. The number went up to about 3.3 million units at the end of 2023 — up from 2 million in 2022 and 1.3 million in 2021, according to Experian Automotive Market Trends report.

Used electric vehicle values had stayed strong over these years, with limited volume on the market and enough car shoppers fascinated with the new technology to pay more for a used EV than a used gasoline-powered car. Things started changing earlier this year. Hertz announced it would sell 20,000 EVs, mostly the Tesla S. They would be replaced by gasoline-powered cars. The car rental giant also put a hold on an order for 65,000 battery-powered cars made by Polestar.

In February, used EV prices fell below average gasoline-powered cars for the first time ever. That market trend has continued, with car search engine and sales channel iSeeCars analyzing 2.2 million 1- to 5-year-old used cars in May 2023 compared to May 2024. The company recently found that the average used EV price came in at $28,767, or 8.3 percent below the average gas car at $31,424. Compare that to one year earlier when the average used EV cost $40,783 and the average used gasoline-powered car cost $33,469, according to iSeeCars data.

What are some of the factors impacting used EV prices? “It’s clear used car shoppers will no longer pay a premium for electric vehicles and, in fact, consider electric powertrains a detractor, making them less desirable – and less valuable – than traditional models,” said Karl Brauer, executive analyst at iSeeCars.

Comparing Tesla Model 3 prices the BMW 3 Series sheds some light on this issues, according toe iSeeCars. A used Tesla Model 3 was priced $2,635 above a BMW 3 Series in June 2023. By May 2024 the Model 3 was priced $4,806 below the 3 Series.
The Tesla Model Y had a $4,570 price premium over the X3 in January 2024, but that difference fell to only $175 by May 2024.

Some of the other factors impacting used EV valuation includes consumer concern over EV battery life; the growing volume of used EVs coming to market; and consumer showing less willingness to pay a premium for EVs. It’s also taking place during a time when the overall U.S. used vehicle market has been seeing a downturn since late 2023.

What’s happening with EV makers?
As we’ve been observing over the past dozen-plus years, the auto market is a very tough one to break into — with EVs and their expensive battery packs being part of the challenge in being viable and profitable. Incentives like federal tax credits and state rebates have helped drive demand for these vehicles, but they’ve reached a mass-production level that’s typical of all segments of new and used vehicles on American roads.

Here’s some new developments that have come up for three significant players in the EV market…….

Rivian: Volkswagen is putting about $5 billion into Rivian in exchange for stock and the right to use Rivian’s EV and software technology through a joint venture. The startup company had paused plans in March to open up a new manufacturing plant in Georgia. Rivian had taken losses of about $39,000 per vehicle built last quarter.

Fisker: Fisker filed for bankruptcy protection last week, as the EV maker began selling assets and restructuring its debt. That was after burning through cash in an attempt to ramp up production of its Fisker Ocean SUV model. Other EV makers have gone through BK protection in the the past two years as well, including Proterra, Lordstown and Electric Last Mile Solutions. Demand had been lower than expected, and finding investment backers became difficult along with having its supply chain needs met during a disruptive period. Henrik Fisker and team were unable to secure an investment from a major automaker, which lead to filing for BK.

BYD: Berkshire Hathaway is reducing its share in Chinese EV giant BYD — from a little bit over 7% to a little under 6%. Owning shares of the company started for BH in 2008 with $230 million for about 225 million shares, which came out to around a 10% stake. Last year, the automaker beat Tesla for the first time ever in global EV sales. Tesla took the title back in the Q1 of this year.

And in other news………

Ford in Long Beach: Ford Motor Co. is setting up a research-and-development team to work on the company’s next generation of electric vehicles. It will soon be headquartered in Douglas Park, adjacent to Long Beach Airport, Mayor Rex Richardson and Ford announced yesterday. “Long Beach is a key part of our broader strategy to attract top talent to develop future vehicles and experiences for our customers,” Doug Field, Ford’s chief EV, digital and design officer, said in a statement.

The automaker said that campus will open up in early 2025. It will include two buildings and eventually accommodate up to 450 employees working on designing “a low-cost, flexible electric vehicle platform.” Led by former Tesla executive Alan Clarke, this R&D center had already gained attention from scooping up engineering talent from other electric car manufacturers like Rivian. Ford’s history in the area goes way to 1930, when the Ford Long Beach Assembly Plant began building Model A’s on a plot of land just north of Terminal Island.

BYD school bus: The Creator, the BYD RIDE’s newest zero-emission Type C school bus, will be rolling out at the STN Reno event July 12-17. The Creator is backed by a 12-year battery warranty and offers a seating capacity of up to 78 students. The Type C has a range of up to 208 miles and has the option to include up to two wheelchair positions.

Taking a good look at news coverage illustrates the credibility and growing presence of clean transportation. Plug-in vehicles, fuel economy and emission standards, reducing urban traffic and air pollution, corporate sustainability, BYD continues getting global brand recognition, and more about Elon Musk and Tesla, were all given serious attention this week.

EV lifecycle longevity: As car buffs brag about being able to drive their electric vehicles well over a million miles, is that such a good thing for those making the cars and parts? EVs and their batteries are expected to see continued improvements for longevity, performance, and efficiency. But this will bring an even bigger challenge to global automakers. Can you make them like Apple’s iPhones, where users have to upgrade to a new phone every few years?

New CAFE standards are not enough: While the federal government’s corporate average fuel economy standards have been valuable since first starting during the 1973-74 oil embargo, the National Highway Transportation Safety Administration could do a better job of supporting zero-emission vehicles. That comes from Zero Emission Transportation Association’s Executive Director Albert Gore on NHTSA’s CAFE standards just being raised to 50.4 miles per gallon by model year 2031. Electric vehicles are doing much better than gasoline-powered vehicles. Proof of this statement: the Fueleconomy.gov Top Ten for model year 2024 are all EVs and average more than 122 MPGe.

What about congestion pricing? New York City, Boston, Los Angeles and Washington, D.C., have all been exploring tactics to reduce traffic congestion and air pollution. They’d like to follow the leads of several international cities that have banned cars on certain streets at certain times. New York was preparing to launch a fee that would be charged to drivers in parts of Manhattan; and that revenue would be used to better fund public transportation. New York Gov. Kathy Hochul has postponed the implementation of the city’s congestion pricing plan indefinitely, citing economic concerns. Congestion pricing remains stuck in New York and the other U.S. cities for now.

Tree planting to save the planet: Hyundai Motor North America is doing a great job of illustrating why corporate sustainability should be a priority — saving the planet. The automaker has added to its partnership with nonprofit organization, One Tree Planted, to plant an additional 300,000 trees this year throughout the U.S., Canada, and Mexico. This year’s contribution will result in a total of 650,000 trees planted since the start of the partnership in 2022. One Tree Planted’s goal is to restore forests around the world, supporting efforts to restore the earth’s habitat for biodiversity and to help fellow humans survive and thrive well into the future.

BYD brand becoming better known: According to the latest Kantar BrandZ Most Valuable Global Brands 2024 report, BYD has successfully retained its position within the Top 10 global automotive brands for the second consecutive year, with a brand value exceeding US$10 billion. Kantar BrandZ is based on setting standards for industry-leading brand valuation, combined with research from the world’s largest and most extensive brand equity study: 4.3 million consumers covering 21,000 brands across 525 categories in 54 markets. BYD thinks the fact that it is operating across four major industries — automotive, rail transit, new energy, and electronics — is why it’s been able to establish a strategic presence across six continents. As for new energy vehicles (battery electric and plug-in hybrid electric vehicles), BYD has sold over 7.6 million NEVs.

Sexual harassment at SpaceX: Charges of sexual harassment and blurring the lines between a professional workplace and private lives have come up again for SpaceX and its CEO Elon Musk. While also heading Tesla, X, Boring Co., Neuralink, and xAi, Musk has also found enough time to have a sexual relationship with a former SpaceX intern, who he later hired onto his executive team, according to The Wall Street Journal. There was also another sexual relationship with a second employee; and a third woman employee said that Musk asked her several times to have his children but she refused. He then denied her a raise and complained about her performance, this employee said. It’s been more than just Musk. In 2021, five former SpaceX employees said there was a “culture of sexual harassment” in the company. One of those women described multiple instances of being groped.

Musk’s $56 billion pay: A Tesla shareholder vote this afternoon on whether to reinstate CEO Elon Musk’s $56 billion pay package that was shot down by a Delaware judge will get passed, Musk said. Late on Wednesday, he said that Tesla shareholders have communicated that they’ll re-approve the pay package, which would get a formal vote the next day. Shareholders will address the pay package from 2018 along with moving the car company’s incorporation state to Texas, at the company’s annual meeting.

What’s up with Cybertruck: You may have noticed the futuristic 2024 Tesla Cybertruck parked somewhere near you. It’s a dual-motor, all-wheel-drive model, which starts at about $80,000; there’s a $20,000 package where you can add the “Foundation Series” package with a few extra features. Steering takes place through the steer-by-wire and four-wheel steer, which brings maneuverability features to make the Cybertruck more like a pickup truck than a tank. Body panels are made from stainless steel and buyers will later have the option of buying armored-glass windows. It’s become the most controversial EV ever, which discussions delving into its looks, safety, and credibility as a truck.

Supercharger becoming Ionna?: The Tesla Supercharger had been the big hope for many about a shared fast-charger network. That’s taken a plunge recently with the company cutting out the entire Supercharger team. It doesn’t affect Ionna’s plans to put 30,000 high-power urban and highway-adjacent fast-charging connectors in the U.S. and Canada. The charging network — based in Durham, N.C., and backed by BMW, Honda, General Motors, Hyundai, Kia, Mercedes-Benz, and Stellantis — got the commitment it needed late last year; and now it says that Tesla’s shutdown will not get in its way. The startup joint venture charging network company said that a total of seven “Quarterback Labs” will be placed around the country. These will be designed to help each participating automaker address charging issues following software updates, tackle customer issues closer to the source, and offer interoperability testing. The JV company plans to have a few DC fast chargers up and running by the end of 2024.

And in other news…………

Q1 plug-in sales way up: More than 3.2 million new passenger plug-in electric vehicles were registered globally during the first quarter of 2024, which is about 25% more than a year earlier. BYD Group took the lead with 624,398 units registered (19.4% share). Tesla registered 386,825 units (12% share), Geely-Volvo registered 251,106 units (7.8% share), Volkswagen Group registered 205,652 units (6.4% share), and Chinese automaker SAIC registered 190,409 units (5.9% share). EV-Volumes researcher Jose Pontes, said that these five groups continue to be responsible for more than half of all plug-in car sales.

New resources for hydrogen and fuel cells: The U.S. Department of Energy’s (DOE’s) Hydrogen and Fuel Cell Technologies Office (HFTO) just launched a new web resource, Clean Hydrogen and Environmental Justice. The new webpage and related links provides a centralized resource that serves both to present HFTO’s environmental justice (EJ) work externally, as well as to solicit input from stakeholders. It covers a wide range of topics, including; common concerns expressed by communities about clean hydrogen; and background on the principles of environmental justice and the Justice40 Initiative. An outline of HFTO’s EJ strategy, with detailed discussion of all aspects of that strategy, is also available.

Claudia Sheinbaum, who begins her six-year Mexican presidential term Oct. 1, has less than four months ahead of her to define her administration’s agenda.

Mexico’s new president, the first woman ever to hold this job in that country, is considered to be a ‘climate scientist’ who gave much attention to detail when she advanced rooftop solar, transit, and bicycle infrastructure as mayor of Mexico City. But like the president of the United States, and presidents and prime ministers of large countries throughout the world, the current realities of transportation and energy complicate the issues.

The U.S. imported over 637 million barrels of heavy crude oil from Mexico in 2022, which was 10% of the country’s total crude oil imports, according to the EIA. In March 2024, the US imported 409,000 barrels of crude oil per day from Mexico, which was the fifth largest source of crude oil imports for the month. State oil company Petróleos Mexicanos (Pemex) has a lot of say in government policies.

Ever since the North American Free Trade Agreement (NAFTA) took effect on January 1, 1994, economic alliances have expanded. Audi, BMW, Fiat (FCA), Ford, General Motors, Honda, Kia, Mazda, Nissan, Toyota, and Volkswagen, all have manufacturing plants in Mexico. Mexico became more viable for these alliances after NAFTA took hold.

The country’s electric vehicle production reached 106,180 units in 2023: 94,436 Ford Mustang Mach-E EVs were produced there as well as 11,744 Chevrolet Blazer EVs, according to Odracir Barquera, CEO of the Mexican Automotive Industry Association (AMIA).

Sheinbaum spent four years at California’s Lawrence Berkeley Lab analyzing energy consumption in Mexico and other industrialized countries, according to a Corporate Knights report. She was also a lead author for the fourth and fifth assessment reports of the Intergovernmental Panel on Climate Change. She’s been part of studies on a number of relevant topics including renewable energy and and carbon dioxide demand analysis.

The new Mexican president will face complicated issues as she takes over from President Andrés Manuel López Obrado. Their country is the world’s 11th-largest oil producer, its 15th-biggest climate polluter, renewable energy financing has declined since 2018, and its the only G20 country without a net-zero target. There’s also the challenge of dealing with Mexican drug cartels being powerful and influential in recent years — and with the U.S. considered to be their largest market for drug sales.

Economically, the NAFTA alliance stays strong. It’s becoming one of the top five largest vehicle producers where U.S.-based technology and parts play a role in carrying out production targets. The country also faces the challenges of where it’s getting its batteries, electronics, and electrical motors for EVs. Much of it is coming from China for assembly in Mexico; but the strong relationship with the U.S. will play a part in whether those deals will be changing in the near future.

And in other news…………
LCFS update: The California Air Resources Board (CARB) will consider approval of the proposed amendments to the Low Carbon Fuel Standard (LCFS) in November. The original date for considering board approval had been March 21, 2024, but that was postponed in February 2024. The board meeting will be held both in-person and virtually. 

ACT Expo highlights: Keynote speaker Ryder System CEO Robert Sanchez had a lot of interesting comments to make last month in Las Vegas. Tesla Semi project lead Dan Priestley and J.B. Hunt President Shelley Simpson had a lot to say as well. Learn more about what they were saying about electrification of the trucking industry and other relevant topics.