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Why EVs Might Never Reach "Price Parity" With Conventional Cars


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True, but I don't think BEV's will have to reach purchase price parity with ICE vehicles.  BEV's will be cheaper to operate, require substantially less maintenance and repair, and last longer.  Resale value should be much better too.  Overall cost-of-ownership will likely be much less than an ICE vehicle.  Also, keep in mind that going forward there may be 'environmental impact' taxes placed on ICE vehicles and fossil fuels.  I completely disagree with those types of taxes, but don't think for a minute they are not being seen as a significant source of increased government revenue.

Edited by 7Mary3
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1 hour ago, 7Mary3 said:

True, but I don't think BEV's will have to reach purchase price parity with ICE vehicles.  BEV's will be cheaper to operate, require substantially less maintenance and repair, and last longer.  Resale value should be much better too.  Overall cost-of-ownership will likely be much less than an ICE vehicle.  Also, keep in mind that going forward there may be 'environmental impact' taxes placed on ICE vehicles and fossil fuels.  I completely disagree with those types of taxes, but don't think for a minute they are not being seen as a significant source of increased government revenue.

 

Good points 7Mary3 sir, particularly what you mentioned about role of taxes and regulations. Even if BEV never reaches initial purchase price parity with ICE powered vehicles, public policy will favor sustainability. That means the cost of owning and operating ICE powered vehicles will go up. Probably dramatically.

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1 hour ago, 7Mary3 said:

True, but I don't think BEV's will have to reach purchase price parity with ICE vehicles.  BEV's will be cheaper to operate, require substantially less maintenance and repair, and last longer.  Resale value should be much better too.  Overall cost-of-ownership will likely be much less than an ICE vehicle.  Also, keep in mind that going forward there may be 'environmental impact' taxes placed on ICE vehicles and fossil fuels.  I completely disagree with those types of taxes, but don't think for a minute they are not being seen as a significant source of increased government revenue.

On the contrary.  I know I can get 300k plus out if an ICE with proper maintenance.  I know buying an EV will bring me declining battery life and half a cost of a new car to replace.  Additionally, the average buyer does not buy a new car for extra money up front based on the fact they may save money in the long run-especially with leases.

10 minutes ago, rperez817 said:

 

Good points 7Mary3 sir, particularly what you mentioned about role of taxes and regulations. Even if BEV never reaches initial purchase price parity with ICE powered vehicles, public policy will favor sustainability. That means the cost of owning and operating ICE powered vehicles will go up. Probably dramatically.

And when a right leaning administration gets elected, those fees will be eradicated. 

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19 minutes ago, Footballfan said:

And when a right leaning administration gets elected, those fees will be eradicated. 

 

In the future, it will become more unlikely that any government official, regardless of partisan affiliation or platform, will get elected at all if they propose policies that favor ICE powered vehicles over ZEV.

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1 hour ago, 7Mary3 said:

True, but I don't think BEV's will have to reach purchase price parity with ICE vehicles.  BEV's will be cheaper to operate, require substantially less maintenance and repair, and last longer.  Resale value should be much better too.  Overall cost-of-ownership will likely be much less than an ICE vehicle.  Also, keep in mind that going forward there may be 'environmental impact' taxes placed on ICE vehicles and fossil fuels.  I completely disagree with those types of taxes, but don't think for a minute they are not being seen as a significant source of increased government revenue.

 

I agree with that except for the bit about resale value.  How much resale value does a 3-year old laptop have?  I think electric cars will fare more like consumer electronics than traditional automobiles because they're built and marketed more like consumer electronics than traditional automobiles.  Once the manufacturer stops supporting the software and subscription and the batteries go weak, an electric car will be worth pretty close to zero, just like an old laptop.  And I don't foresee the timeline being much different than other consumer electronics either, 8-10 years tops.

 

Meanwhile traditional automobiles built 10, 20, 50, 100 years ago can still have substantial residual value depending on condition.

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We will have to see how long successive generations of BEV batteries last, but remember that even when they reach the end of their useful life powering automobiles, they still are useable as home storage batteries for significantly longer.  And what makes you think that with all the software and connectivity in a modern ICE vehicle it will face the same obsolescence?  Personally given the admittedly substantial cost of a BEV I think long term product support will not be an issue.  In fact, updating may actually be easy and cost effective.   

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8 hours ago, Sevensecondsuv said:

 

I agree with that except for the bit about resale value.  How much resale value does a 3-year old laptop have?  I think electric cars will fare more like consumer electronics than traditional automobiles because they're built and marketed more like consumer electronics than traditional automobiles.  Once the manufacturer stops supporting the software and subscription and the batteries go weak, an electric car will be worth pretty close to zero, just like an old laptop.  And I don't foresee the timeline being much different than other consumer electronics either, 8-10 years tops.

 

Meanwhile traditional automobiles built 10, 20, 50, 100 years ago can still have substantial residual value depending on condition.

Good point.  I hadn’t thought of the planned obsolescence route for manufacturers to be pushing for electric cars.  Looking at lithium ion cells, they are rated for 250-500 cycles.  That can be extended by not fully charging or discharging them.  Based on 12000 miles per year and a 300 mile range, that puts the life expectancy in the 5-10 year range.  Factor in the obsolete hardware and software updates and your 8-10 year life cycle seems like a pretty good bet.  
 

average age of a car in the US is approaching 12 years with 25% over 16 years old.  https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiahZHn6L3uAhVWAZ0JHfsFAJkQFjAJegQIGxAC&url=https%3A%2F%2Fwww.cnbc.com%2F2020%2F07%2F28%2F25percent-of-cars-in-us-are-at-least-sixteen-years-old----record-high.html&usg=AOvVaw0a7PKd0EAh0Xqq3ftuaBHe

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18 hours ago, slemke said:

Good point.  I hadn’t thought of the planned obsolescence route for manufacturers to be pushing for electric cars.  Looking at lithium ion cells, they are rated for 250-500 cycles.  That can be extended by not fully charging or discharging them.  Based on 12000 miles per year and a 300 mile range, that puts the life expectancy in the 5-10 year range.  Factor in the obsolete hardware and software updates and your 8-10 year life cycle seems like a pretty good bet.  
 

average age of a car in the US is approaching 12 years with 25% over 16 years old.  https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiahZHn6L3uAhVWAZ0JHfsFAJkQFjAJegQIGxAC&url=https%3A%2F%2Fwww.cnbc.com%2F2020%2F07%2F28%2F25percent-of-cars-in-us-are-at-least-sixteen-years-old----record-high.html&usg=AOvVaw0a7PKd0EAh0Xqq3ftuaBHe

 

I only hope we don't end up disposing of electric cars like we do consumer electronics - namely paying to ship them to "developing" southeast asia nations where they have no fancies about environmental responsibility and are happy to either burn them in huge piles or dump them in the ocean.  At least with traditional automobiles the typical disposal process is stripping for core parts at a junkyard and then recycling the raw material here at home.

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On ‎1‎/‎27‎/‎2021 at 11:53 AM, Sevensecondsuv said:

 

I agree with that except for the bit about resale value.  How much resale value does a 3-year old laptop have?  I think electric cars will fare more like consumer electronics than traditional automobiles because they're built and marketed more like consumer electronics than traditional automobiles.  Once the manufacturer stops supporting the software and subscription and the batteries go weak, an electric car will be worth pretty close to zero, just like an old laptop.  And I don't foresee the timeline being much different than other consumer electronics either, 8-10 years tops.

 

Meanwhile traditional automobiles built 10, 20, 50, 100 years ago can still have substantial residual value depending on condition.

the depreciation and resale and thus resale on Electrics is absolutely abysmal....and manufacturers are fully aware...just check residuals...the Mach Es are even shockingly low... 

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2 hours ago, Deanh said:

the depreciation and resale and thus resale on Electrics is absolutely abysmal....and manufacturers are fully aware...just check residuals...the Mach Es are even shockingly low... 

 

The issue with electronics is that two things happen with them-They are made faster/better and get cheaper to make as time goes on.

I'd assume the same will have with tech that is found in BEVs, with the biggest issue being battery density and materials its made out of. 

 

ICE doesn't have this issue as much because its plateaued and BEVs will get there sooner then later. 

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7 minutes ago, silvrsvt said:

 

The issue with electronics is that two things happen with them-They are made faster/better and get cheaper to make as time goes on.

I'd assume the same will have with tech that is found in BEVs, with the biggest issue being battery density and materials its made out of. 

 

ICE doesn't have this issue as much because its plateaued and BEVs will get there sooner then later. 

And that rapid depreciation will affect lease rates and retail purchases.  Honda and Toyota have staked their reputations on high resale values.  That may go out the window if you are looking at replacing the battery or the system updates stop and you can’t run the latest apps.  The road to bev nirvana is paved with pot holes....thus requiring large government subsidies and mandates to get people to take the drive.

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1 hour ago, rmc523 said:

I can't wait for governments to shift the whole industry to BEVs, and then "suddenly" realize the climate problems mining for battery materials, and outlaw those to push everyone in some new direction.

Start walking....oh wait that emits CO2 also.  So long Fido, your emissions aren’t keeping the household carbon neutral.

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4 minutes ago, slemke said:

And that rapid depreciation will affect lease rates and retail purchases.  Honda and Toyota have staked their reputations on high resale values.  That may go out the window if you are looking at replacing the battery or the system updates stop and you can’t run the latest apps.  

 

Most BEVs are leased-at least from what I understand. Its still a new tech, so people who can afford them rather lease them and get a tax break on top of it if they can too and then upgrade if there is one around. Not to mention most higher end cars are leased anyways.

Batteries are already guaranteed to 80% capacity for 10 years. 

 

As for system updates-MFT hasn't had an update in a longtime and works perfectly fine with my iPhone 12....when the iPhone 5S was the latest thing out in 2013. I'm sure that software updates in BEV will stop after 5-7 years of being on the road, as an incentive to get a newer car, but will be still perfectly able to be driven. 

 

If the day comes that AVs are actually practical for every day use, that is a whole another ball of wax. 

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4 minutes ago, silvrsvt said:

 

Most BEVs are leased-at least from what I understand. Its still a new tech, so people who can afford them rather lease them and get a tax break on top of it if they can too and then upgrade if there is one around. Not to mention most higher end cars are leased anyways.

Batteries are already guaranteed to 80% capacity for 10 years. 

 

As for system updates-MFT hasn't had an update in a longtime and works perfectly fine with my iPhone 12....when the iPhone 5S was the latest thing out in 2013. I'm sure that software updates in BEV will stop after 5-7 years of being on the road, as an incentive to get a newer car, but will be still perfectly able to be driven. 

 

If the day comes that AVs are actually practical for every day use, that is a whole another ball of wax. 

Finance companies aren’t going to take a bath on bevs.  Ford set some really low residuals on the Mach e.  That makes the cost of leasing unattractive to more folks.

 

We’ll find out in 5-8 years how those batteries hold up based on warranty costs.  Customer usage patterns might be much different than what engineering is assuming in their models for predicting life expectancy.

 

I was thinking more of the driver assistance features and self driving electronics than simply the entertainment system.  Nav systems start to become bricks after a couple years.  The updates aren’t worth the price, new roads and points of interest can change appreciably in 5 years.  With rapid advancements in automotive electronics,  there will be more churn.  Probably not like the 50s and 60s when new style trends changed every few years, but more than what we have had in recent memory.  Then there will be those hanging on to their old cars for the rest of their lives to avoid learning the new technology.

 

I’ll hold off on buying any bev until there is more real world data on life expectancy of the battery and resale value.

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3 hours ago, rmc523 said:

I can't wait for governments to shift the whole industry to BEVs, and then "suddenly" realize the climate problems mining for battery materials, and outlaw those to push everyone in some new direction.

Or better yet, what if the earth cools?  Are we to burn more carbon to keep off at the "ideal" temperature?  ?

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Thanks for the chart AKirby.  That's my whole beef right there.  The US can do all the right things and the world will still be hosed if China doesn't change.  Only the US and EU are making substantial decreases.

That's what gets my goat about activists like Gretta T.  Comes to our country, chastises us for ruining her future.  And yet we're not the ones with the biggest problems.  Why doesn't she go over to China and preach to them???   Oh wait...  ?

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3 minutes ago, 92merc said:

Thanks for the chart AKirby.  That's my whole beef right there.  The US can do all the right things and the world will still be hosed if China doesn't change.  Only the US and EU are making substantial decreases.

That's what gets my goat about activists like Gretta T.  Comes to our country, chastises us for ruining her future.  And yet we're not the ones with the biggest problems.  Why doesn't she go over to China and preach to them???   Oh wait...  ?


There is a large contingent of people who love doing things that make them feel better even if what they’re doing doesn’t actually solve the problem. And mostly what they love to do is pass laws and regulations because it’s easy and doesn’t require any hard work.  Like outlawing AR-15s.  The problem isn’t AR-15s, the problem is somebody wants to kill large numbers of innocent people and they can do that just as easily with a handgun, a bomb or a vehicle.  But stopping those people is difficult so they try to outlaw assault rifles.  So let’s say we outlaw them and the next day somebody kills 10 people with a homemade bomb or driving a van into a crowd.  Then what?  But they will pat themselves on the back when they pass the law and feel really good about themselves for “doing something”. 
 

We have to stop doing ineffective things just because it feels good.

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1 hour ago, pig9r said:

What is interesting is Toyota’s continued push toward hydrogen fuel cells.

 

Yes sir. For light vehicles sold to retail consumers, continuing to pursue development of hydrogen fuel cell propulsion systems is foolish ("fool cells"). Remains to be seen Toyota will come to its senses soon and get serious about BEV.

 

For heavy duty commercial vehicles, fuel cells may be more practical. Like GM and Navistar, Toyota with its subsidiary Hino announced recently that its developing a fuel-cell based Class7/8 truck.

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