Electric Vehicles Have to Get Beyond the High Status Market to Succeed – and That’s Not Looking Promising

March 18, 2024

By Robert Wiedemer

Electric vehicles face a fundamental problem: Why buy them?

Nobody really seems to ask that question. Stock pundits and most of the auto industry just assume it is an inevitable transition that will have to occur in the next five to ten years.

But the reality is that, for consumers, EVs don’t offer any big advantages over gasoline cars. In fact, they have some disadvantages which have been much talked about, including range, difficulty in finding chargers on the road, difficulties in cold weather etc.

But the biggest problem is that they are more expensive than gas cars. If they didn’t have a government subsidy, they would be even more expensive. Plus, there are costs involved in equipping your garage to charge an EV.

Speed is King for EVs

So far, the EV industry has answered the question of why buy an electric vehicle by delivering cars with much higher status. In particular, high speed. Speed has been the key reason EVs have sold so well.

And they are speedy. OMG! A Tesla can easily outperform an ordinary muscle car like a Camaro (which isn’t so muscley anymore) or a Challenger. And they even give the Corvette a decent run. In fact, the Tesla Model S Plaid beats the Corvette with a 0 to 60 run of 2.3 seconds vs 2.9 seconds for a Corvette C-8 (2.6 seconds with the performance package). That’s fast.

In fact, speed has been so important that many of the EVs that have been brought to market are from sports car companies like Porsche.

But the high-speed, high-status market is only so big. And it looks like EVs may be hitting that limit. The high high-speed F-150 Lighting EV truck saw falling sales not long after it was introduced.

Non-Status EVs Simply Don’t Sell

If the car companies had to rely on regular cars for EV sales, what would it look like? Well, let’s take a look at sales of the EV Chevy Bolt. It has a six-year sales track record. It started in 2017 with sales of 23,000 cars and four years later it had sales of 22,000 cars in 2021. Sales dropped to 11,000 in 2022 and it was put out of its misery in 2023 when it was discontinued.

So, the non-status driven EV market is not looking good. This isn’t a big surprise since I can only imagine how few people would have paid extra to get pollution controls, like catalytic converters, on their cars and trucks back in the 1970s. Not many. Especially in Texas where I grew up.

And the cost of going electric is much, much higher than pollution controls, even with government subsidies.

And there’s the rub. If the cost of going electric was similar to pollution controls, it might be easier to get adopted. But it’s much higher. And, unlike pollution controls, where you can see an obvious huge improvement in air quality locally – look at Los Angeles now versus in the 1980s – It is quite clear that there will be no similar impact on global warming because it’s… well… global.

So, the future of EVs is clear. Growth in the US will end as soon as the status market is tapped out. That may be happening right now. But, if not, it’s likely to happen fairly soon. The inevitable transition to electric cars is not so inevitable if consumer sentiment is any indication.

PS As I was writing this article Mr. Musk just announced that the new Tesla Roadster will go from 0-60 MPH in less than ONE SECOND. I think it is inevitable that I will have to see that for myself.