About those 51 Days…
If your typical IRS income tax liability (not the balance remaining, but how much you’d owe before withholding) is >$7.5k, then a new EV bought in 2018 can claim you a $7.5k rebate in your tax return. Due to this, and also to Americans’ general holiday-heavy shopping tendencies, December is the EV market’s bumper-crop month. Dealers often offer special deals in the run-up to December 31. The Chevy EV siblings (Volt and Bolt) in particular seem to be heavily discounted towards year’s end this year, and by April next year GM’s Fed rebate will be halved. So… it is time to make decisions.
Tesla News (...but of course)
In my last #RbPi I described how the media are totally missing the main Tesla news: earth-shattering EV sales records by the Tesla Model 3. In September more Model 3’s were sold in the US than Toyota Corollas. The same month, the Model 3 set a new monthly EV sales world record; to the US sales were added >1k in Canada, totalling 23.5k. And indeed, a few weeks later the financial news finally followed caught up, after Tesla reported its first-ever, massive quarterly profit.
In the same diary I described how the $7.5k Fed EV rebate will shrink to $3.75k for Teslas sold starting January 2019, and how the majority of the Model 3 waitlist holders who collectively gave Tesla a ~$400M grant back in 2016 (by way of of $1k from each customer) for the promise of a “$35k Tesla” — are now squeezed between this deadline and the fact that right now the cheapest Model 3 is $49k, and the $35k+ versions won’t be offered till spring 2019. I speculated that many waitlisted will fold and buy the more expensive version, because their $35k Tesla will now cost $3.75k more anyway.
But there’s been a positive surprise from Tesla itself: a few weeks ago it has come up with a mid-trim, 260-mile-range version starting at $45k, already in production (which means it can be lowered to $40k eventually, once the currently-mandatory $5k premium package finally becomes optional). So now I’m speculating there will be a lot of those generous compromise Model 3’s ordered for 2018 delivery, and Tesla will have its hands full.
The Global EV Sales Race
There’s little question that the Model 3 will be the world’s best-selling EV in 2018; it has already crossed 100,000 sales for the year. However, what’s less well-known is that we might have no less than 3 EVs surpassing 100k sales in 2018. For perspective, the previous record set only last year by China’s BAIC EC-Series, was 78k sales in one year.
The three are the Model 3, the very same EC-series, which is just emerging from a several-month slump while trying to meet increased government range requirements for EV subsidies (the Chinese government is really riding herd with its EV industry). Now it’s emerging big time. EV Sales Blog’s Jose Pontes reports that the EC-Series actually beat the Model 3 in October, setting its own new record at 21k sales while the Model 3 slid a few thousands to 19k. The EC-Series (an affordable compact) won’t be able to catch up in two months, but barring major mishaps it will cross 100k in 2018.
The third in the trio is the good ol’ Nissan Leaf, which is having its own record year. It currently sits second with 74k sales, clocking nearly 10k/month. However, December is traditionally top month for EV sales, so with a little luck it will cross from the 90s to the 100s. Still, it is likely to slide to third.
The contrast between the Leaf’s previous record year (2014) and 2018 is rather illuminating. Back then, 60k Leafs were sold globally — fully half of them in the US, simultaneously setting a US EV sales record that was only broken this year by the Model 3. But thus far in 2018, out of its global 74k only 12k Leafs were sold Stateside. This is good only for 8th place on the US plug-in sales charts, the lowest the Leaf has ever found itself this late in the year.
Has the Leaf become worse? Ha. The new ones sport a 151-mile range vs. the 2014’s 84 miles, and come with a more mainstream design (you’d have a hard time telling it apart from a Subaru, or even a Ford Focus). It is also substantially more powerful now. Has it become more expensive? The price point is similar to 2014’s. The lease deals may be a tad less attractive than in 2014, but you *are* getting far more range and a much longer battery warranty.
This is all about consumer psychology, and possibly also a shift of marketing focus by Nissan (in the US, not elsewhere). On the consumer side, within EV circles there’s some ongoing disappointment with the pace of progress with the Leaf. There are also the ridiculously cheap lease deals offered in 2016-2017. Hard to go back to more typical prices from that. And there’s the Model 3 framing effect, whereby all other EVs seem unsexy by comparison to the US consumer. My evidence for the latter is that Bolt sales, as well, have been down this year.
On Nissan’s side, AFAIK they are not building much US Leaf inventory, so dealers cannot really push them. It is unclear whether Nissan are throttling due to waiting/switching to the 2019 model which promises 220 miles range, and then doing the big push — or they have decided to put the US market on the back burner for the Leaf in general. The latter would be very unfortunate.
Last but Not Least… The Koreans Are Coming
Outside of Tesla and several Chinese automakers, the Koreans are the ones most aggressively expanding their EV offerings. In particular, there now BEV versions for two popular Korean SUVs: the Hyundai Kona and the Kia Niro. Neither is available in the US yet (you can get a Niro PHEV though) — but the 2019 models should arrive here. And those SUVs are not toy EVs: the Niro’s range is well north of 200 miles, at an expected MSRP under $40k.
I’ll end here. See how my experiment in emulating Yosef 52 pans out.