In a pair of diaries right after 45*’s inauguration, I made the case that getting an electric car has now become not only a viable environmental option, but a necessary act of resistance.
It’s the perfect storm for EV expansion: the oil industry becoming the government is happening exactly as the range of affordable and attractive options to buy/lease an EV is reaching critical mass. If pickup trucks and big SUVs are the only vehicles you care about, then you’ll have to wait a few years. But everyone else should probably pay *very* close attention, and even consider swapping that ICE (internal combustion engine) car of yours a few years ahead of plan, and replace it with an electric car this year.
What I’m asking, is that you go beyond pure consumer-side considerations, and add to the equation the fact that by going electric now, you will be actively undercutting the Trump regime by removing your household (or part of it) from the oil economy.
In January I presented available low-budget EV options. In February I followed up with exciting new mid-market offerings.
Time for a mid-year update: with a couple of minor exceptions, things have been getting better and better for the US EV market. The options out there are pretty unbelievable, EV buyers are beginning to respond, and it will get dramatically better over the next few months.
In particular, the two leading stories of summer 2017 are a historic Grand Premiere — and an equally historic deluge of closeout deals.
Details below.
Terminology reminder: EVs are any car that can be charged from a plug. BEVs are “pure” electric-only vehicles (think Nissan Leaf and the Teslas), while PHEV is a catch-all for vehicles that also have some ICE engine or generator “on the side” (think Chevy Volt and BMW i3 REx).
I will start with a quick overview of what’s going on globally with EVs, then focus on the US market where I aim my call for #Resistance by plugging in.
A Quick Global Picture
The global EV market continues to expand, and will almost surely break 1 million unit sold in 2017 alone. EVs, in the sense of “regular” 4-wheel vehicles, are still a Wealthy World phenomenon, with two important exceptions:
- China, far and away the largest EV market by volume, relying almost exclusively on domestic production. China also makes nearly all the world’s electric buses (to the tune of >100k units/year), and deploys >95% of them domestically.
- Ukraine, where ~2000 used EVs from the West (mostly Leafs from California) were imported in 2016, combining together with new sales to ~4% market share (including both brand-new and new-to-the-country vehicles). Ukraine is important, because it shows how even countries with a lousy economy and no auto industry can still participate in the EV revolution. The number of undesirable-in-the-West but awesome-good-value elsewhere used EVs will only grow in the coming years.
The combined global EV market share had passed 1% sometime in 2015 or 2016. The typical Western European country (with the exception of southern Europe) is now closing in on 2% market share, or even higher. Norway, way out front, logged a 42% EV market share last month, with all top 6 selling cars being BEVs. In the US, the EV market has passed 1% around the turn of the year, hopefully never to look back.
The year’s early months have demonstrated, in multiple countries, that EV expansion is still hugely dependent upon government incentives and oversight. When fighting such an entrenched incumbent as ICE and the oil economy, strong and stable government commitment is essential, and is required for longer durations than originally thought. In the US, there has been a longstanding Federal tax credit of up to $7.5k for each automaker’s first 200k EVs, plus at least one quarter’s sales after that. Then there’s a gradual phaseout over the following year. Both Tesla and GM are expected to cross 200k cumulative US sales next year, with Nissan not far behind. It has been pointed out that this scheme will bias the EV market in favor of laggard automakers that have sat back and let Tesla/GM/Nissan bear the brunt of the higher early technology cost, because they will still have nearly 200k subsidized units to sell. To my recollection, Hillary’s platform suggested increasing the incentive to $10k and extending its duration. Trump is likely as clueless and ill-willed on this as on anything else, and folks like Pruitt might actually be gleeful at the prospect of sowing some chaos into the fledgling EV market. So barring a very pleasant surprise, next year, or by 2019 for sure, we might see some crazy EV price distortions in the US.
Tesla Model 3 Grand Premiere
With that caveat noted, we might be on the eve of positive revolution in the auto market. Tesla’s Model 3 (M3) midsize, aimed (approximately?) at the mid-market and sporting both a (still-not-official) 200+ mile range, access to Tesla’s quick-charging network (by far the world’s largest), and most importantly - Tesla’s Cool Factor, has already made history:
- Unless I’m mistaken, this is the first car ever to have had 400,000 eager customers each plunk down a substantial chunk of money ($1k), not only in advance, but a year and a half in advance, sight unseen.
- It is Tesla’s 4th product, and in sharp contrast to the previous three (Roadster, S, X) which rolled out after years of delay, M3 is clocking in pretty close to the schedule originally announced when reservations opened.
- Last and definitely not least, M3 production is slated to ramp up at a dizzying speed. This quarter, only a few thousand Tesla employees will get M3’s, and will serve as “beta testers”. Then if all goes well, Q4 will see rapid ramping-up, reaching 20k units per month in December. For reference, only this year Tesla crossed 20k units/quarter for its two current models (S+X) combined. The world’s most common EV, the Nissan Leaf, reached a peak of 60k units/year in 2014, across 3 factories. At some point in 2018, Tesla plans to reach 10k M3 units/week. At this pace they will have blown through the entire historic reservation list before 2018 is over.
If the M3 sells ~400k units in 2018, it might become America’s best-selling passenger car (leaving mainstays such as the Corolla, the Civic and the Camry in the dust) - in its first full year on the market! Even half that number will be a real earthquake.
The ceremonial first M3 deliveries will take place July 28. The biggest two caveats to look for are
- Any show-stopping quality issues emerging during the first few months.
- Price. After a decade in the auto business, Elon Musk has made it pretty clear his strategy is not about selling at cutthroat low margins. While M3 is officially mid-market, the smart money is on it grazing the upper end of that definition. Prices will be announced July 28, but expect the lowest bare-bones trim to be around $40k, quickly escalating towards $50+k with the kind of options Tesla fans love. That said, the first 100-200k units will still enjoy the $7.5k Fed rebate, and in the hottest EV states there are additional incentives amounting to thousands of dollars. Plus, most people knew what they were signing up for when making the reservation, right? We will learn pretty soon…
But Tesla isn’t the only game in EV town, which is great, because most of us don’t have an M3 reservation, and many of us love to save a buck when we can. So…
The Mother of All EV Closeouts
There are some 300,000 Nissan Leafs buzzing around the globe, all of them still in the same funky shape and form as first ones delivered almost 7 years ago. The Leaf has had its ups and downs, but those in the know have long ago realized that it offers excellent value, in particular as a family car. If you’re a household with kids, have more than one car, and are able to plug in overnight — then you can replace one of your cars with a Leaf right now, with zero inconvenience. That was true even for the original 2011-2 Leaf, with 73 miles average range and substantial battery-degradation issues in warm climates. It is easily true now, with 107-mile average range, better weather resilience, and an 8-year/100k-mile battery warranty. You can also have the Leaf as your only car, but in most American households that does require a bit of craziness, of the good kind though. Crazy like us; it’s been our only car since early 2015.
Moneywise, since late 2012 when Nissan started offering killer lease deals, the Leaf offered roughly similar cost-of-ownership to the ICE cars it would replace. Depending on the particular deal, on gas prices, on the particular ICE car and on the amount of driving, you could actually save quite a bit of money by switching to a Leaf. But the vast majority of the many millions of potentially Leaf-compatible American households have not realized this; or they heard about the Leaf, but for some reason — whether concrete or psychological — decided against it.
Well, now is a great time to revisit that decision. Why?
- #Resist. I will keep harping on that. If it’s a close call, it should go towards undermining the Trump-Oil regime and all that it signifies. And yes, voting with your wheels to EV-exit the oil economy does make a difference. Walk the walk, people.
- The price. The Leaf situation now is the diametric opposite of the Tesla situation: Nissan Leaf is in full closeout mode.
From Hawaii to Oklahoma and beyond, deals of $10k off MSRP are routinely offered. Sometimes they cover certain large employers or universities. Other times, it’s offered to all customers of the regional utility, or just one local dealer decides to go haywire. With $10k off, plus the $7.5k Fed incentive which is still fully in effect, the bare-bones Leaf comes down to ~$13k (fully loaded, ~$20k). And many states offer another few thousand of incentives. Sell the ICE you’re replacing on Craigslist, shop around Nissan dealerships and bargain a bit more — and you’ll be getting a brand-new car for the amount you’ll save on it in the first 0-3 years via the lower operating cost.
That’s for buying the Leaf outright. Then there are the leases, still Americans’ favorite way of getting a Leaf. You could find good leases as early as summer 2012 when we got our first one. But now they are ridiculous. If you work for an employer on their discount list, or are already a Nissan customer, or trade-in a 1990s beater, or your local dealer comes up with some other pretext — any combination of 1-2 of these might land you a zero down, $100-150/month Leaf lease (without any discount factor the lease will cost a couple thousand more, still pretty cheap). We were offered such a deal in May, while looking at other EV options — and didn’t think twice, replacing our 84-mile 2014 Leaf with a 107-mile 2017 Leaf literally overnight.
In short: How many ways do I need to spell F-R-E-E- -C-A-R for you?
Again, those are great cars. If they enter a multi-car household, the Leaf will quickly become your first car not the “second” one. And with a quick-charge port and depending upon your lifestyle, they can even be your only car.
So why are they on closeout? Because the Leaf itself is also on the eve of a launch: its long-awaited Gen 2. The official launch is Sep. 6, with actual US deliveries slated for December. It will look different; more like a normal car and apparently larger. Old Carlos Ghosn likes to keep the cards close to his hands, so there are no official details about range/etc. The smart money is that Nissan, following its philosophy of incremental change, fiscal prudence and consumer value, will have both a 200+ mile and a ~150 mile option for the Gen 2 Leaf. For the right price, I could live with a 150-mile BEV as our only car, pretty much forever. Heck, we lived with an 84-mile one for 2.5 years.
In the months leading up to previous, smaller model upgrades (2012-3 and 2015-6), the Leaf suffered dramatic sales slowdown. To pre-empt it this time around, Nissan decided to go all out on the closeout. It’s working: Leaf US sales are higher than last year. I do believe Nissan are still making money on them, because in Year 7, with battery costs plummeting, and an assembly line that’s much simpler than ICE, making them shouldn’t cost that much.
In fact, year-to-date Leaf sales are running neck-and-neck with a brand-new BEV it has no business competing with at the current matchup. A BEV that should have been front and center in this diary, but alas, it is not — because GM marketing has fumbled an EV handoff once again.
What’s Up with the Chevy Bolt?
The Chevy Bolt was supposed to be the Dark Horse that emerges out of nowhere and scoops Tesla’s M3 and everybody else. Indeed, with far less hype than the M3, the first Bolts were delivered in December, right on the ambitious original schedule, giving GM and its vast marketing+distribution network almost a full year head start. The EPA rated the Bolt’s range at an eye-popping 238 miles, auto reviewers sang its praise, early buyers have been ecstatic with no major reliability issues, expansion into all the country’s hot EV market was fairly quick, and…
…
“A spokesman for the company said the [extended — AO] shutdown at Orion [originally planned around July 4th — AO] was “due solely to softening sales of the Sonic” model, adding that its production plan for the Bolt for this year was unchanged.”
...Reuters adds that Bolt inventory is now at 111 selling days, up from 104 in June. That’s way over GM’s target number of around 70 selling days for its vehicles. That 70 target is to be reached by year’s end. At least that’s what GM is telling investors. Across all of its vehicles, GM has an average of 105 days of supply, a 10-year high.
...This shutdown is probably of more concern to those looking for the Opel Ampera-E in Europe, as that car is a badge-engineered version of the Bolt EV, that also runs off the Orion assembly line. Opel has a many thousand vehicle backlog of Europeans who have ordered the Ampera-E, however GM has reportedly decided to artificially limit the number of EVs heading outside the US.
This deserves at least one separate post, but after 7 years of mass-market EVs we know two things:
- GM engineering (both in the US and Korea, where most of the Bolt’s R&D took place) can crank out outstanding EVs on amazingly tight schedule.
- GM product management and marketing+distribution arms, could not sell an EV if their lives depended on it.
In May we went to see a Bolt. I was surprised by the roomy passenger compartment, roomier than the Leaf (which is a midsize). But the trunk is disproportionately short, a foot shorter than the Leaf. It's just weird to have such a mismatch between the passenger compartment and the trunk.
True, unless you have 5 butts actually taking up all seats, the roomy midsection can easily compensate for the puny trunk by folding some. But surely GM management knows that Americans like big cars, and for the past half-decade have only been trending bigger. The Bolt looks really, really small, especially on a GM dealer lot.
FFS, the Bolt's range clears the magical 200-mile psychological threshold by almost 20%. Surely adding a foot’s length at the back, making the Bolt equivalent to the Leaf/Focus/Civic class - the smallest high-volume-selling class in the US - could be done while staying above 200. Bottom line, for the second straight time, GM management (or whoever is in charge of that) told Engineering to design a flagship EV that targets no specific segment of the US market. They did it with the Gen 1 Volt. Then, too, they had to throttle production pretty early. And of course, their generally unenthusiastic dealer network doesn’t help either.
But for you as a #RESIST-motivated EV buyer... this is a great time to bargain for some Bolt discounts. Those have been popping up everywhere. All you need is one accommodating dealer within a Bolt range’s drive. This site that collects EV buy/lease deals across the country, now shows discounts of ~$4k from dealers in WA, CA, VA and FL. This brings the base Bolt to $33-34k, ~$26k after Fed rebate. And you can surely bargain harder now. If you can afford the Bolt and are ok with the size - then go for it. And meanwhile the Chevy Volt, still the best-value PHEV on the market, continues to sell better than the Bolt, with similar or larger discounts, and is a few thousand $$ cheaper to begin with.
I’m not done with good consumer-side news…
Toyota Seeing Some Light
In sharp contrast to the Bolt’s 111 inventory days, the Toyota Prius Prime PHEV (also launched late last year), and has a US inventory of barely 11 days. Besides outselling the Bolt, The Prime takes up nearly 20% of US Prius sales, despite having only 4 seats while all other Prii have at least 5. After scrapping the first incarnation of a Prius PHEV, which was technically laughable, Toyota went back to the drawing board and returned with the plausible, futurist 25-electric-mile Prime. In Japan it’s a huge hit, so most of Toyota’s output thus far has been gobbled up domestically. Hopefully they will ramp up the Prime production line. They surely have the ability. With this inventory level don’t expect crazy deals on the Prime, but it’s still eligible for a $4.5k Fed incentive, after which its MSRP is as low as $24k, on par with non-plug Prii.
Other Tidbits
Some bad news for big-car fans: production of the Chrysler Pacifica PHEV, the first plug-in minivan in America, has halted at least until next model year. There has been lots of demand, but if GM are masters at EV marketing failures, Fiat-Chrysler repeatedly fails at the basic task of building EVs. All 1,600-odd plug-in Pacificas have been recalled.
Another hot debut, the 124-mile Hyundai Ioniq BEV promised to arrive nationwide by now (the Ioniq is a ridiculously good-looking midsize, and I’m not one who usually swoons over cars), is currently limited to super-small quantities in California, and will expand nationwide only next model year, if that. The Ioniq, like the Prime, is gobbled up by its domestic demand.
Back to the bright side… if used Leafs were crazy cheap in January, you can surely bargain even harder for them now. Keep in mind that for only a few thousand more (after incentives) you might be able to land a 2017. And used Chevy Volts are still a great option, a car that you may keep indefinitely.
Final Plea
The options just keep expanding. There are quite a few I haven’t even mentioned. Look up insideevs’ monthly sales scorecard to see the dozens of new BEV and PHEV models currently available.
Politically and economically, the iron is hot: ICE car sales are languishing, the Trump regime is reeling even as Pruitt is dismantling the EPA. It is up to the grassroots and local action to generate a tidal wave against the regime from yet another direction. Now’s the time to get off the fence and get into the EV world. Whether it’s a modest first step like the Prius Prime; or an essentially-free closeout Leaf to replace one of 2 household ICE cars; or a Tesla M3 to come with a ribbon on your doorstep in a few months; or a more obscure model; or something used; please think about it seriously, ok?
And spread the word. Thank you.