This Is A Big Moment For Automakers In The USA – CleanTechnica

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The cleantech news of the month in the USA is clearly that the $7,500 federal tax credit for electric vehicles just expired. Well, it was given a very premature death by Republicans in the House of Representatives, the Senate, and the White House. Why? Because they are under the thumb of Big Oil and don’t care about human health or a livable climate — but those are stories for another day. Now that we’ve gotten through the many EV sales surges from automakers, the big question is: what happens next?

For a little context, fully electric vehicles rose to around 10% of US auto sales as the tax credit expired. In Europe, the figure was at 21% in August. In China, BEVs had 34% market share. Globally, BEVs took 18% of total overall auto sales. These figures keep going up year after year.

EV subsidies have helped to stimulate sales in many markets. However, one thing we’ve seen for much of the past decade is that automakers will not increase their EV production and sales if they are not forced to do so. As soon as governments require that automakers reduce their fleet emissions or meet certain EV targets, they can sell more EVs! All of a sudden, consumers are indeed ready to buy their EVs! Few automakers end up not being able to meet the requirements. So, while there is a mixture of barriers to faster EV adoption, one of those barriers is clearly automakers not trying harder.

Regarding the US market going forward, one question is whether automakers are going to by and large just step back their EV efforts and sell fewer EVs. On the flip side, are some automakers going to work harder to take a leadership position in the EV market, grow EV sales based on word of mouth from happy EV owners and the natural benefits of EVs, and be at the forefront of an ongoing transition in order to get a bigger piece of the overall auto sales pie?

In my opinion, this is a big moment that automakers should be looking to seize. With the surge in EV sales in the 3rd quarter, there’s a lot of momentum out there and opportunity to get more mainstream buyers onboard the EV bandwagon. There’s a lot of opportunity via price cuts to show people that EVs can be smart financial decisions even without the tax credit. There’s a ton of opportunity, as always, to highlight the huge benefits of electric cars in order to excite consumers and inspire sales.

The EV market will rise, and it will eventually take over the auto market. This is a point in time when automakers have the choice of accelerating that and bringing more consumers into the future, or stepping back, delaying, and lagging in order to squeeze a few more drops out of their combustion engine IP and manufacturing inertia. What might seem like a smart decision for the coming quarter or year may not be the smartest decision for 2–5 years down the road. Which automakers are going to have that longer term vision?

Hyundai has gotten a lot of attention for offering price cuts of around $10,000 on the IONIQ 5 (its website currently says up to $11,000, but the initial press release less than a week ago said “price reductions ranging from $7,600 to $9,800”). Though, a footnote not often mentioned is that these offers expire November 3rd. It’s not clear if this is going to be continued beyond that date. Nissan is rolling out a new and much improved LEAF at a stunningly low MSRP of $29,990. Tesla has offered cheaper Model Y and Model 3 trims that are lacking several features and options in order to drop their base prices by $5,000 to $5,500, respectively. Chevrolet’s Equinox EV has a starting MSRP of just $35,100. Of course, most of the EVs on the US market are luxury EVs, which may find sales more easily based on their clear superiority than any financial savings. Cadillac had EVs rise to 40% of its sales in the 3rd quarter, while Audi reached 39%. Those brands should be able to build on that success and sell more EVs in coming quarters, even if it does take a while to return to those high EV share percentages.

Overall, automakers need to do a better job of highlighting and continuously repeating the benefits of EVs — super convenient home charging (never having to go to a gas station again), a smoother and quieter ride, the usefulness and fun of instant torque, better tech integration. If they do this, while taking advantage of long-dropping battery prices, they should be able to continue finding a lot of EV buyers, even more than in the 3rd quarter. If they don’t, sooner or later, other automakers will, and they’ll have their lunch eaten.

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