Demand dropping / asking price dropping?

Regulus7

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The IRA program seeks to blend geopolitical aims with incentives for EV adoption among other priorities. This aspect of the law likely will make most BEVs ineligible for the full $7500 credit apart from maybe the Bolt and maybe some Tesla cars. The full $7500 tax credit was a big incentive to go EV. I fact I bought 2 EVs over the past two years. Going forward full compliance with IRA sourcing and building requirements means most EVs will not qualify. So this suggests to me that 2023 sales could be lower than 2022 which will then become a big political problem going into the 2024 elections requiring probably some new incentives which they won’t be able to pass anyhow. I just hope they revoke the income limits before my 4 year options program expires
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voxel

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The IRA program seeks to blend geopolitical aims with incentives for EV adoption among other priorities. This aspect of the law likely will make most BEVs ineligible for the full $7500 credit apart from maybe the Bolt and maybe some Tesla cars. The full $7500 tax credit was a big incentive to go EV. I fact I bought 2 EVs over the past two years. Going forward full compliance with IRA sourcing and building requirements means most EVs will not qualify. So this suggests to me that 2023 sales could be lower than 2022 which will then become a big political problem going into the 2024 elections requiring probably some new incentives which they won’t be able to pass anyhow. I just hope they revoke the income limits before my 4 year options program expires
I don’t see Taycan or BMW i4 demand dropping due to lack of tax credit. Both are well over the vehicle class price limits so income limits are moot.

Polestar 2 and German made ID.4 struggle to sell for sure. Different class of buyer that could be affected by income limits.

The IRA will achieve it’s goal in moving EV production to the US.
 

Rpgonzalez

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so many battery plants due to come online. They wouldn't be investing $billions in those plants without high confidence they have the raw materials locked in for them.
That’s a very interesting point. Guess we’ll see. I’m happy I cashed in my model 3 while prices were skyrocketing, “only” a 5k markup, $7500 rebate and 2022 prices. There are zero chances I could afford a 2023 in 6 months from now. I would need at least $10k off MSRP!
 

dbsb3233

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Battery prices are a product of supply and demand like everything else. And will adjust like everything else. There's periods where demand exceeds supply, then they build more plants to make more, and it'll reverse. Tends to go back and forth in waves.

With the unexpected popularity of the Mach-E when it came out 2 years ago (and some other models, but the MME was the posterchild), we hit a period of higher BEV production than expected, and the battery suppliers weren't fully ready for that much growth. So battery prices rose. Then automakers announced huge investments into building new battery plants, most set to open in 2025. At that point we should see that supply-demand dynamic flip. Supply-demand nearly always goes in cycles with one falling behind the other, then correcting. The most classic case of that is the oil market, but it happens for many other products too.

I mostly agree on the power grid, although there's room for a lot of EV growth *IF* charging at night. If we get a lot of people trying to charge their cars during the day (and especially early evening during highest summer demand), I agree that will be a big problem for the grid. We should highly discourage that. Road trippers have no choice, and maybe transport companies that have to charge multiple times a day. But like 90% of all EV charging needs to take place overnight during the lowest demand period. There are ways to accomplish that, probably the biggest being time-of-use rates.

It'll also take education and proper messaging. Like for instance, "Don't buy a BEV if you don't have dependable overnight charging where you live!".
 

Rpgonzalez

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no, IMO battery tech will need to be different for 50% sales. Can’t be mining for Lithium and using power to satisfy 100kWh batteries.

ideally I would like to see power consumption for a 300 mile crossover be closer to 40kwh.
 


dbsb3233

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ideally I would like to see power consumption for a 300 mile crossover be closer to 40kwh.
I don't think that's gonna happen. In fact, I see it going the other direction, at least in the US market. Americans prefer larger vehicles on average (SUVs, CUVs, trucks). Efficiency will likely drift lower, not higher. And avg battery pack sizes will trend higher, not lower.
 

Rpgonzalez

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I don't think that's gonna happen. In fact, I see it going the other direction, at least in the US market. Americans prefer larger vehicles on average (SUVs, CUVs, trucks). Efficiency will likely drift lower, not higher. And avg battery pack sizes will trend higher, not lower.
That’s what I think too. I’m just pulling a number out of my ass, but I’m thinking 10+ years down the line… I don’t know anything about solid state batteries or electric motor design, but I think it’s going to have to be a miracle to exceed 50% new electric vehicle sales.
And what about 30 years from now? We might be laughing at BEV’s… but what roll would we be driving???
 

dbsb3233

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That’s what I think too. I’m just pulling a number out of my ass, but I’m thinking 10+ years down the line… I don’t know anything about solid state batteries or electric motor design, but I think it’s going to have to be a miracle to exceed 50% new electric vehicle sales.
And what about 30 years from now? We might be laughing at BEV’s… but what roll would we be driving???
I agree that some of the projections (and the laws) are silly and will probably never be met. Especially the "No ICE sales" ones. While 2035 is still a long way off and a lot of things can change with technology, I put the odds of actually having no ICE sales in 2035 at less than 5%. That's mostly virtue signalling. There will likely be certain needs that will remain ICE for much longer, and that's fine.

The targets also get fuzzy as to whether they count PHEVs as EV or ICE? 50% market share of BEV + PHEV in a decade, I can see. But probably not 50% BEV alone.

It doesn't look like electric motors are likely to improve much. They're already about as efficient as they can get. However, there might be some improvements to be made by adding transmissions, or by creative application of multiple motors. For instance, the Tesla semi has 3 motors, but only 1 is engaged when highway cruising. The other 2 only kick in when extra power is needed. That improves efficiency over leaving all motors engaged full time (like the AWD MME does). So there are some ways to improve efficiency. But at more cost, which is why most passenger cars don't do that.

The biggie is battery tech though. No one really knows how much better batteries will get (energy density, price, charging speed, charging cycles without significant degradation, cold performance, etc), but there's a ton of work being done on that with pretty notable success rates. Like always, there's a lot of vaporware too, but significant improvement with batteries looks likely within a decade, with modest improvement every few years along the way. For the same weight and footprint as the MME's 99 kWh battery today, my guess is that will be maybe 150 kWh by the end of the decade.
 

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It'll also take education and proper messaging. Like for instance, "Don't buy a BEV if you don't have dependable overnight charging where you live!".
Hehe! Like I agree, but tell that to the lady today whom I helped charge her month old MB EQS. She and hubby didn't have charging at the house, so they use EA. Go figure!
 

AhardFSU

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I don't think that's gonna happen. In fact, I see it going the other direction, at least in the US market. Americans prefer larger vehicles on average (SUVs, CUVs, trucks). Efficiency will likely drift lower, not higher. And avg battery pack sizes will trend higher, not lower.
I think that you'll see smaller battery pack options so that the dealer will have a cheaper version to sell. VW is doing that with the TN built ID 4 and Hyundai does or did it with the Kona. This seems to be the route Toyota is going bc they put a -53kw battery in the BZ4. There are people that only need enough battery to move around town, so having a small battery option for some models make sense.
 

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I think that you'll see smaller battery pack options so that the dealer will have a cheaper version to sell. VW is doing that with the TN built ID 4 and Hyundai does or did it with the Kona. This seems to be the route Toyota is going bc they put a -53kw battery in the BZ4. There are people that only need enough battery to move around town, so having a small battery option for some models make sense.
Agree we'll see some of that too. More models with more variety, which will stretch both ends of the spectrum. That will include some short range "commuter" models/trims, as well as more bigger SUVs and trucks. But I suspect the overall average pack size in the US will be drifting higher rather than lower due to the preference for larger vehicles in the US. Vehicles like the Explorer EV, Silverado EV, maybe even the Blazer EV, Aviator EV, etc will probably be sporting 100+ kWh packs I would guess. (The ER packs, anyway, which I assume will sell more.)
 

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I agree that some of the projections (and the laws) are silly and will probably never be met. Especially the "No ICE sales" ones. While 2035 is still a long way off and a lot of things can change with technology, I put the odds of actually having no ICE sales in 2035 at less than 5%. That's mostly virtue signalling. There will likely be certain needs that will remain ICE for much longer, and that's fine.

The targets also get fuzzy as to whether they count PHEVs as EV or ICE? 50% market share of BEV + PHEV in a decade, I can see. But probably not 50% BEV alone.

It doesn't look like electric motors are likely to improve much. They're already about as efficient as they can get. However, there might be some improvements to be made by adding transmissions, or by creative application of multiple motors. For instance, the Tesla semi has 3 motors, but only 1 is engaged when highway cruising. The other 2 only kick in when extra power is needed. That improves efficiency over leaving all motors engaged full time (like the AWD MME does). So there are some ways to improve efficiency. But at more cost, which is why most passenger cars don't do that.

The biggie is battery tech though. No one really knows how much better batteries will get (energy density, price, charging speed, charging cycles without significant degradation, cold performance, etc), but there's a ton of work being done on that with pretty notable success rates. Like always, there's a lot of vaporware too, but significant improvement with batteries looks likely within a decade, with modest improvement every few years along the way. For the same weight and footprint as the MME's 99 kWh battery today, my guess is that will be maybe 150 kWh by the end of the decade.
My MME is my first BEV. When people ask me about it, I am very clear regarding the challenges that face BEV drivers. I basically tell them BEVs are not ready for the typical driver. The charging infrastructure sucks and range is a serious shortcoming, especially in winter. Fans make excuses for these challenges, but most people won't put up with it. IMO, we need 500 mile HIGHWAY range cars before they can really be considered as ICE replacement for most people.

I agree battery technology will improve but we need to double the size of the batteries currently used in cars like the MME to even get close to a 500 mile highway range MME.

To bring this back to the OP, many people are buying BEVs now who are really not ready for them. I expect many will be traded in or sold, replaced with an ICEV. Which will drive down demand for BEVs. When that happens is hard to predict, but I think it will happen within the next few years.
 

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I wonder if the US market will bifurcate for BEVs in the future. With cheap “bolt” like options for city drivers and those who don’t need a lot of range and then high end with avg price $60k + and maybe even higher. The average selling price is already $47k in the USA. But as others have noted most BEV buyers are higher income buyers. luxury brands have all gone downstream in price point to increase sales numbers. Just look at the number of X1 or X3s on the road or base Macans in affluent areas. But the real high end $>100,000 is maybe where the marginal future of luxury BEVs is heading. Profit margins for auto oems is likely much better at these price points and they can pass on the higher lithium/cobalt costs.

I plan to always have at least one BEV in the household but for longer range driving an ICE is going to be hard to beat
 

dbsb3233

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I wonder if the US market will bifurcate for BEVs in the future. With cheap “bolt” like options for city drivers and those who don’t need a lot of range and then high end with avg price $60k + and maybe even higher. The average selling price is already $47k in the USA. But as others have noted most BEV buyers are higher income buyers. luxury brands have all gone downstream in price point to increase sales numbers. Just look at the number of X1 or X3s on the road or base Macans in affluent areas. But the real high end $>100,000 is maybe where the marginal future of luxury BEVs is heading. Profit margins for auto oems is likely much better at these price points and they can pass on the higher lithium/cobalt costs.

I plan to always have at least one BEV in the household but for longer range driving an ICE is going to be hard to beat
There will be some of that (particularly as a 2nd car in the household), but as a general rule, people don't like to be limited like that. Especially when spending big bucks. When a "cheap" EV still costs 30+ grand, buying a BEV with 150 mile range (100 practical) is gonna be a hard sell for many when they can buy a similar ICE or PHEV for the same price that's capable of 400 miles.

PHEVs may become the bigger draw in that lower price range, unless/until batteries get way better/cheaper.
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