Where is the EV industry headed in the next 5 years ?

[TomT]

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

Government disincentives: In VA, our government is writing laws to remove the gas tax by taxing everyone with more sales tax AND increase the tax on EVs at the same time. Lunacy if you ask me.

 

[DanCar]

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

ICE should be taxed heavily because they are killing people. https://en.wikipedia.org/wiki/Motor_vehicle_emissions" onclick="window.open(this.href);return false;

 

[johnqh]

I disagree that the battery needs to be bigger.

Yes, 1% to 5% of the trips cannot be covered by Leaf. However, many households have 2+ cars. There is absolutely no reason that one of them cannot be an EV for workday commute. Actually, I think there is a trend toward smaller 2/4 seats commuter EVs, like 500e, Smart ED, i3....

Lighter cars means better e-mileage. They can get same or better mileage as Leaf with a much smaller battery, not larger.

And do realized that EV's need to be charged at home, that means a house and a garage, and that means a family and very likely 2+ cars. The industry just need to focus on this segment and there is no reason why EV cannot take 20%+ market share.

For the family to become a EV-only family (or for singles to consider EV), the 2nd EV will need to be larger and have longer range. It doesn't have to be luxury like Tesla, it does need five seats and big trunk space to hold the kids, their friends and the weekend gears.

For the second car, a good balance between cost and range is 150 miles and 30K after incentives. Now, 150-mile is not enough to satisfy 100% of the driving needs. The rest will be filled by rental cars and car sharing. The auto makers will include some rental car benefits to their sales program. The Fiat 500e is a good example.

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The danger to the EV movement is its own success. As EV becomes more popular, public charging stations will be more difficult to access. Owners will have to depend more on home charging, which makes apartment dwellers more difficult to drive a EV.

 

[TimLee]

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

Government disincentives: In VA, our government is writing laws to remove the gas tax by taxing everyone with more sales tax AND increase the tax on EVs at the same time. Lunacy if you ask me.

Agreed. All highway taxation should become a function of miles traveled and the weight of the vehicle (and therefore its corresponding wear and tear damage and associated maintenance cost for the highways and bridges and funding of the necessary departments of transportation that do the inspections and arrange maintenance and upgrade projects). Unlikely this will happen though, large % in the US want total anonymity and this arrangement would also make heavy haul trucking pay >90% of the cost. They should do that, but they fund politicians heavily and will likely never pay their true cost.

 

[Bicster]

I don't expect dramatic increases in EV sales until Tesla Gen 3.

People buy most EV's today primarily because they're EV's, either for environmental reasons, financial reasons (cost of fuel), political reasons, or geek / early adopter reasons. That trend will continue, particularly in locations with strong financial incentives and/or access to carpool lanes.

On the other hand, people buy the Tesla Model S first and foremost because it's a great car. It's not quirky or compromised (other than the price tag.) It's the Consumer Reports top scoring car. It's magic on wheels.

EV sales will rocket when there is an affordable EV that fits the "great car" category in spite of being an EV, not because of it.

I don't have faith in Nissan or any other manufacturer to wake up to that in the next 5 years. Elon gets it.

 

[GetOffYourGas]

FCEV will miss the parade and Toyota and Honda will play catch-up. Toyota will catch-up before Honda (who, I fear, might be lost for good).

I enjoyed reading your rundown and largely agree. This piece, however, struck me as odd. Yes, I agree with the first sentence. But you predict that Toyota will catch up before Honda. Why is that? Toyota has a meek PHEV offering (although it is selling well right now) compared to Honda's. I have driven both the PHEV Accord and the PHEV Prius. The Accord is a far superior vehicle. The only thing wrong with it is price, but that should resolve itself as battery prices decline.

Then there is the issue of the BEVs. Toyota has the RAV4, for which they purchased the electric drivetrain from Tesla. Presumably in the hopes that they could perfect the FCEV and ditch BEVs altogether. Honda, on the other hand, developed their own drivetrain for the Fit EV (as far as I know). I have not had a chance to drive either one, but from what I've read the Fit EV is more reliable and overall a better ownership/driving experience than the RAV4.

If/when FCEVs don't appear in the next few years, Toyota/Honda will have to continue down the EV paths they have chosen. Both will be playing catch-up no doubt, but it seems to me that Honda is better positioned than Toyota in that regard.

 

[johnqh]

I don't expect dramatic increases in EV sales until Tesla Gen 3.

People buy most EV's today primarily because they're EV's, either for environmental reasons, financial reasons (cost of fuel), political reasons, or geek / early adopter reasons. That trend will continue, particularly in locations with strong financial incentives and/or access to carpool lanes.

On the other hand, people buy the Tesla Model S first and foremost because it's a great car. It's not quirky or compromised (other than the price tag.) It's the Consumer Reports top scoring car. It's magic on wheels.

EV sales will rocket when there is an affordable EV that fits the "great car" category in spite of being an EV, not because of it.

I don't have faith in Nissan or any other manufacturer to wake up to that in the next 5 years. Elon gets it.

Fiat 500e is a better car than regular 500. Smart ED is a better car than ICE Smart fortwo

 

[TomT]

I'm not even going to bother to dignify such a ludicrous and poorly-reasoned comment with a response...

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

ICE should be taxed heavily because they are killing people. https://en.wikipedia.org/wiki/Motor_vehicle_emissions" onclick="window.open(this.href);return false;

 

[TomT]

Agreed. I've driven the 500e and actually liked it a lot.

Fiat 500e is a better car than regular 500.

 

[Bicster]

Fiat 500e is a better car than regular 500. Smart ED is a better car than ICE Smart fortwo

Agreed. But neither will make much of a dent in EV adoption. They're not great, mass-market cars. Maybe the 500e could be, but it won't be sold in significant numbers.

We need more EVs that have sex appeal, good range, good utility, good performance, and the potential for good longevity.

 

[DanCar]

Yes, the truth hurts.

I'm not even going to bother to dignify such a ludicrous and poorly-reasoned comment with a response...

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

ICE should be taxed heavily because they are killing people. https://en.wikipedia.org/wiki/Motor_vehicle_emissions" onclick="window.open(this.href);return false;

 

[johnqh]

Fiat 500e is a better car than regular 500. Smart ED is a better car than ICE Smart fortwo

Agreed. But neither will make much of a dent in EV adoption. They're not great, mass-market cars. Maybe the 500e could be, but it won't be sold in significant numbers.

We need more EVs that have sex appeal, good range, good utility, good performance, and the potential for good longevity.

As I said, EV are great commuter cars, as the second car in a multi-car family.

Smart has limited appeal, but 2+2 ones like 500e and i3 will have more appeal than Leaf, targeting specifically as commuter car.

To be a successful family primary car, it needs to be bigger and have longer range than Leaf. Leaf is just a little bit too small for weekend outings.

 

[TomT]

+1

Agreed. All highway taxation should become a function of miles traveled and the weight of the vehicle (and therefore its corresponding wear and tear damage and associated maintenance cost for the highways and bridges and funding of the necessary departments of transportation that do the inspections and arrange maintenance and upgrade projects). Unlikely this will happen though, large % in the US want total anonymity and this arrangement would also make heavy haul trucking pay >90% of the cost. They should do that, but they fund politicians heavily and will likely never pay their true cost.

 

[GetOffYourGas]

Fiat 500e is a better car than regular 500. Smart ED is a better car than ICE Smart fortwo

Agreed. But neither will make much of a dent in EV adoption. They're not great, mass-market cars. Maybe the 500e could be, but it won't be sold in significant numbers.

We need more EVs that have sex appeal, good range, good utility, good performance, and the potential for good longevity.

As I said, EV are great commuter cars, as the second car in a multi-car family.

Smart has limited appeal, but 2+2 ones like 500e and i3 will have more appeal than Leaf, targeting specifically as commuter car.

To be a successful family primary car, it needs to be bigger and have longer range than Leaf. Leaf is just a little bit too small for weekend outings.

Families need cars for during the week, too. Our Leaf is our primary car of our household. It is plenty large enough for our family of 4, and my wife takes it more often than not because she is trucking the kids around to school, play dates and errands, covering far more miles than my commute. We only ever choose the other car when two cars are needed, or we are travelling more than 75 miles in a trip. There are plenty of families that could do the same, most just don't realize it.

 

[LTLFTcomposite]

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

ICE should be taxed heavily because they are killing people. https://en.wikipedia.org/wiki/Motor_vehicle_emissions" onclick="window.open(this.href);return false;

If that's the case, and it may well be, how does taxation help?

 

[LTLFTcomposite]

From a right track/wrong track standpoint my view is anything with a plug is good, with the possible exception of things like the accord that have such puny AER people may not bother plugging them in, and could create a negative impression. Face facts there is a long way to go engineering the consumer, we could have 500 mile batteries cheaper than gas and still have a big segment of the population stuck on stupid. For that reason I see PHEVs playing a big role in the migration, not because they are the future, but because they're potentially more palatable for the present.

To borrow a phrase from Salieri, EV purists make too many demands on the royal ear.

 

[rumpole]

We are now into 3rd year of Plugins on the road (sorry, excluding the uber expensive 2 seater Roadster).

What do you think, say for model year 2018 ?

What I really would like to see would be an option to have emergency power available from your EV, so that after a storm, etc., you had an easy plug you could plug your fridge into, with suitable warnings to the owner about how many amp-hours they could draw, etc. After Superstorm Sandy, I was prepared with an inverter hooked up to the DC/DC converter of my Leaf, and I could have run my fridge for three days off of the car. However, it involved getting under the hood, purchasing cables, a fuse, and the inverter, then learning how to hook them up safely. If it were an option on the car, it would be a great selling point, and be of great utility.

 

[WetEV]

I'm not even going to bother to dignify such a ludicrous and poorly-reasoned comment with a response...

This one I disagree with. EVs and ICEs should be treated the same from a vehicle use tax standpoint since they both use the same roads and contribute to their demise equally... There is really no reason why EVs should be given a free pass...

ICE should be taxed heavily because they are killing people. https://en.wikipedia.org/wiki/Motor_vehicle_emissions" onclick="window.open(this.href);return false;

One reason for taxes is to take externalities into account. The roads are "free", mostly, and it is hard to see how they could be anything but that. Everyone uses the roads, and most of the roads are are "free" to drive on. So then the wear on the roads from driving on them is a fine example of an externality. So a tax on vehicles roughly proportional to the wear and tear on the roads is one way of dealing with the situation that is both reasonably close to fair and doesn't have any perverse incentives. There are other externalities as well. Urban air pollution is a fine example. How to deal with this problem? We might just ignore it, and let the pollution kill people. We might regulate air pollution, by putting tight limits on the total pollution that one car can emit. Or we might tax the pollution.

Ignoring the cost of pollution leads to perverse incentives. A car that is a few dollars cheaper and pollutes a lot more is a "better" deal to the owner, but a far worse deal to everyone that must breath the pollution, suffering perhaps thousands of dollars in damages from health effects for every dollar "saved" by the owner of the car.

Regulating air pollution is the main way that we have dealt with the problem in the past. This can work, but can also lead to perverse incentives. For example, someone in a very rural area may be required to meet the standard needed to get city air clean, and this might not make economic sense as the emitted pollution has little effect in the sparsely populated rural area.

Or we might just tax air pollution. In an ideal case, if we taxed air pollution at the cost to others, and spend the tax collections on treating the sickness and otherwise compensating the harm from pollution, we might have a complete set of "economically fair" incentives. This would lead to higher taxes on ICE cars than electric cars, which isn't ludicrous.

Now, there is no ideal solution. Regulation has real advantages over taxation in some cases, even though it is less economically "fair".

 

[RegGuheert]

One reason for taxes is to take externalities into account.

+1

If the only issue involved was the impact of the vehicles on the roads and how to pay for it, then taxation based only on road use might make sense. But whether we like it or not, taxes also influence what consumers spend their dollars on, and that can make a big difference in many ways.

In addition to the health costs associated with pollution that WetEV and DanCar have mentioned, I will point out that, unlike CA, VA is NOT a producer of fossil fuels, but it IS a producer of EV fuel. Taking that further, a large fraction of the fossil fuels sold here does not even come from within the United States and quite a bit comes from regimes which are unfriendly to our nation and even to our way-of-life.

Before July, VA had a gas tax on fossil fuels AND a $50/annual tax on EVs. The new tax eliminates the gas tax, raises the tax on EVs to $150/year AND raises the sales tax on everything sold in the state by 0.5%.

The bottom line is that our legislators appear to be completely ignorant of the fact that EVs provide an opportunity to build local businesses and jobs by creating in-state electric fuel gneration resources which are not an option with fossil-fueled vehicles. Because of this ignorance, they have CREATED A NEW LAW which creates a disincentive to purchase lower-polluting vehicles which use locally-produced fuel and to instead creates an incentive to purchase higher-polluting vehicles which burn fuels produced in other states and foreign lands.

The end result is obvious: This new law will result in higher pollution in our beautiful state, higher trade imbalances both for VA and the US, and a higher probability of foreign wars. There is no upside for VA taxpayers in this equation. I can only believe that our legislators are somehow financially tied into big oil and/or defense.

 

[sparky]

FCEV will miss the parade and Toyota and Honda will play catch-up. Toyota will catch-up before Honda (who, I fear, might be lost for good).

I enjoyed reading your rundown and largely agree. This piece, however, struck me as odd. Yes, I agree with the first sentence. But you predict that Toyota will catch up before Honda. Why is that? ...Both will be playing catch-up no doubt, but it seems to me that Honda is better positioned than Toyota in that regard.

I hope you're right and I'm wrong as I've always preferred Honda's engineering to Toyota's. But Toyota has a high-selling Prius lineup that will keep them competitive against EREVs.
I was considering the large bets placed by Honda and Toyota on a losing strategy; FCEVs, and the impact on Honda will be greater at a time when they also have to fend off competition from South Korea. Yes, the Fit is Honda-engineered (very well, I hear). They grabbed the motor and electronics from their Clarity and made an interesting battery choice with the Toshiba SCiB. Interesting, because the Toshiba pack is supposedly very rugged in terms of rate of charge and number of cycles. Much more than is needed for a 3 yr lease.
So, maybe Honda has broader EV plans and they'll surprise us. Company leadership doesn't seem to point that way though.