The WSJ is out with a story saying that dealers are begging GM 0.00%↑ to expand their line of hybrid vehicles.
I don’t remember the exact date the Toyota TM 0.66%↑ Prius came out, but we still have 2008 as a “station car,” and it runs like a top. Even though it’s not great for a long trip, I still take it sometimes. Our BMW X5 costs about $100 to fill up, and the old Prius is about $15. Sure, it’s not close in terms of the “driving experience,” but with headphones on listening to earnings reports, does it really matter?
EV Absorption
Lots of ink is spilling on the “slowdown” in EV growth in the US. The numbers say it’s not slowing down, but there are way more players now than a few years ago when Tesla TSLA 0.00%↑ was the only game in town.
A natural “absorption rate” for new things varies greatly and depends on consumer behavior, replacement cycles, technology advances, etc. In the case of electric vehicles, we also have meaningful subsidies in place to spur adoption.
I drove an EV pickup truck in 2008, and it was fantastic. I’m closer to buying one now than I was then, but still not there.
They are getting close, but many tradeoffs are too big to go with an EV. First of all, charging infrastructure is sorely lacking. It will keep improving, but we’re accustomed to not worrying about filling up and never waiting online. If you travel around where you live and have a home charger, you are fine, but if you drive longer distances, it won’t work as well.
Hybrid Deniers?
Hybrid vehicles have long been among the few “everybody wins” technologies. Yes, even the oil companies because they always find a way to win.
Full power and range - check!
Great gas mileage - check!
Drives massive scale in batteries - check!
Consumers love them - check!
Imagine how much gasoline and energy we would save if passenger calls all got 2x of their gas mileage.
For whatever reason, almost every major auto manufacturer went from steadfast EV denial to being “all in” on electric vehicles. The transition from ICE to electric is on with no pausing at ICE/Hybrid in between.
The company with the most experience and best technology in the sector, Toyota, has not taken this approach.
Famously, Hertz invested in a pile of Teslas to be ready for EV rental demand that never came. (Does Hertz know most people want to rent cars for longer trips?) Now, they are dumping them on the market at depressed prices.
Will we fix it?
Automakers could sell many hybrid vehicles now but don’t have nearly enough. Toyota is still a leader, but demand is high, and state regulations in California have resulted in many new hybrid deliveries being diverted there, where “pure ICE” vehicles are being phased out.
It’s not easy to shift design and production over quickly in the automobile business. If anyone sees fit to do it they stand to gain a lot of share and enjoy strong stock performance, especially relative to their peers who stay stuck in EV only mode.
On the flip side - China
Even Elon Musk commented last week that China is by far and away superior to the rest of the world in EV production.
They are not blind to hybrid technology either. Some high-end EV models have a built-in ICE engine, but it’s not linked to the drivetrain, which is fully electric. But it is available to kick in and run to charge the batteries to extend the range of the vehicle.
They get it; many people will not invest in a vehicle that can turn into a brick if they find themselves without electricity to power it up.
I’ll keep scratching my head.
As an outsider in the auto industry but one who understands entrenched interests I’m sure there is some reason all these huge corporations chose to ignore a giant elephant sitting in the parking lot.
Oil companies spend a lot on lobbying, and so do car makers. But they sell directly to consumers who are ready, willing, and able to tell you what they want. Self-interest alone would seem to be a decent driver of product strategy for these automakers.
We want to buy another hybrid or two this year; maybe we’ll be able to do it once supply ramps up. Meanwhile, the old Prius keeps plodding along, and the X5 speeds along, eating up gas money at a frightful pace.
I’ll put this alongside my question of why a team like the Detroit Lions would turn away from the run (working great) to the pass (working like crap) during the second half of a division championship game. There’s always next year.