I’m now back in the United States and I’ve got a cache of stories from Goodwood I’m excited to share, but there’s plenty of news here worth talking about so I’ll get to those in a bit. First up, a new study is out about electric car ownership and it turns out that it’s cheaper than owning a gas-powered car for just about everyone. I’m curious about the two places where it’s still more expensive.
Incentives are a big reason why the cost of ownership of electric cars is currently lower, though no one expects those to last forever. Eventually, prices have to come down by reducing the cost of batteries. That requires investment and investment in critical mineral mining is starting to look a little sketchy.
Is Stellantis boned? They’re highly profitable, so the assumption is they are de-boned like a nice rainbow trout, though I have some concerns. The first half of the year was bad for Stellantis, with Honda replacing them as the 5th biggest automaker by sales in the United States.
And, finally, the UAW continues to be in hot water as the new guy is starting to act a little like the old guys.
It’s Still Cheaper To Own An ICE Vehicle In West Virginia And Maine
What do Maine and West Virginia have in common? Both are more rural, more mountainous, and wilder places adjacent to more suburban/urban states. In some ways, Maine is the West Virginia of the Northeast, or vice versa.
I’m talking about these states because Automotive News commissioned a study from J.D. Power to determine how much cheaper/more expensive an electric vehicle is than a comparable gas-powered vehicle over five years. Nationwide, if you buy an electric car you’re going to pay more upfront (by about $13,000) but save enough in fuel, incentives, and other costs to make up the difference and net about $3,100.
The variability from state to state is huge, however.
If you live in New Jersey, those savings are more than $10,000 over five years, which leads the nation (some of this is due to a statewide sales tax break that’s going away), followed by places like Illinois, Nevada, and Colorado.
What’s the flip side of this? In Maine, you’re going to spend about $1,600 more over five years. It’s even worse in West Virginia, where that cost rises to almost $1,800. You could argue that swapping for a more advanced vehicle for less than $400 is a good deal, but try telling that to someone pay a lot more for an EV than a comparable hybrid or ICE vehicle.
So why Maine? Let’s look at the methodology, according to Automotive News:
Untangling the cost of owning a car is a complicated but essential exercise for buyers considering an EV over a gasoline-powered vehicle. J.D. Power analyzed many factors, including transaction prices, taxes, regional gasoline prices and electricity rates, and zero-emission vehicle incentives. The data suggests that long-term cost outweighs EV sticker shock for comparable vehicles.
The most obvious factor might be the cost of gasoline versus the cost of electricity. So let’s look at Maine first. According to AAA, Maine’s average $3.50 gas cost is pretty much bang on at the national average. West Virginia, too, is close at $3.45. So neither state seems to enjoy a big advantage or disadvantage when it comes to gas prices. The cost of electricity? According to this CNET article, West Virginia has average electricity rates but higher than average electricity bills (the 7th highest in the nation). Maine, as well, is in the top ten.
Maine “de-regulated” its energy sector in 2000, leading to much higher rates, as deregulation of power companies has handed a ton of money and monopolies to private companies in exchange for… I’m not sure what. Just ask Houstonians how they feel about turning a public utility into a private profit funnel.
Maine, at least, has EV incentives that help counter some of this negative cost differential. According to Hannah Lutz, the reporter who wrote the story, WV offers no state or utility incentives to support EV sales. Big shock: Only about 261 EVs were sold in the state in Q1 of this year.
All of this is to say that, with our current incentive regime, you’re better off getting an EV from a cost perspective almost everywhere.
“There Is A Lot Of Doubt Right Now” That EV Mandates Will Stick
The World Materials Forum was held in Paris last week and the big discussion at the conference, which focuses on mining/natural resources, was just how fast the transition to electric cars would happen.
The conclusion? Not as fast as government mandates might have you believe according to this Reuters report from the forum.
“I think there is a lot of doubt right now that this will happen,” Mathias Miedreich, former CEO of Belgium recycling and battery materials group Umicore, told the conference. “That makes it very difficult to invest.”
In May Miedreich stepped down from Umicore, which lowered its 2024 profit forecast the following month due to weak demand projections for battery materials due to a slowing EV market.
If you follow the money, players in the space say it’s still possible to get financing for projects focused on the minerals critical to EV battery production, but it’s not as easy as it once was.
Obviously, projections for cheaper EVs were partially premised on the idea of having cheaper raw materials. If we don’t get cheaper materials fast enough then that’s going to slow down and, as you can see above, cost is a big driver of acceptance.
Honda Is Kicking Stellantis’ Butt
I wrote earlier this year that I was concerned about Stellantis sticking the landing, which is to say that I’m not sure the company has the product mix to maintain the kind of sales volume it needs to remain as profitable as it has been over the past few years.
Those profits were built, in part, on cost-cutting, the continuation of old platforms, layoffs, and a well-timed global supply shortage. New products are coming and maybe it’ll all work out and this hand-wringing over the performance of the company is just everyone focusing on too narrow a point in a company’s transition period.
Or maybe it isn’t. Right now it sucks to be a Stellantis dealer as you’re losing market share to companies like Honda, which has seemingly exactly the right product for consumers.
In the first half of the year, Stellantis shrank to the 6th biggest automaker in the United States behind Honda. I like this analysis from Automotive News as it zeroes in one of the big changes in the market:
Sales of pickups and SUVs declined, while crossovers rose to account for 45 percent of the market. Compact crossovers alone outsold pickups of all sizes.
Although nearly every car segment shrank, strong performances for the Honda Civic, Toyota Corolla and Nissan Sentra helped compact cars to a 24 percent gain.
Stellantis has a bunch of compact crossovers and they’re fine, but hardly competitive with Honda has right now. Pickups are, generally, way more profitable, but companies like Honda can win on volume, especially when RAM truck sales are down 20% year-over-year during the first half of the year. In fact, Honda sold more CR-Vs in the first six months of the year than Ram sold all pickups.
UAW President In Trouble For Alleged Financial Misconduct
The former leaders of the United Auto Workers union were either tossed out of office or tossed into jail after numerous instances of taking money for personal use and otherwise engaging in shifty behavior. A new administration came in, led by Shawn Fain, and the UAW would go on to win historic contracts from the three major Detroit automakers and unionize a plant in the South for the first time ever.
Still, the UAW has a federal monitor in place to make sure there’s no backsliding into illegal activity, and that federal monitor is trying to look into claims that Fain used his position to punish senior leadership for not kicking money to his fiancee and her sister, both who work at the UAW’s National Training Center. The monitor says he’s getting stonewalled and has filed a motion to get access to more information.
From the Detroit Free Press:
The motion, filed by monitor Neil Barofsky, requests that the court confirm the monitor’s authority to receive access to records immediately and compel the UAW to produce documents that the monitor is asking for.
“Despite the monitor’s repeated requests, the union has not provided such access to union documents for these investigations, insisting that the union must engage in what has become a lengthy pre-production review and asserting that it will withhold or redact documents as it deems necessary to protect privilege and confidentiality … by taking that position, the union has effectively stalled the monitor’s work,” the motion said, which was filed in the U.S. District Court in Detroit Monday.
And what does the union have to say about this?
The federal government’s work rooting out the corruption in previous administrations is what allowed our members to take back their union. … We have cooperated and will continue to cooperate with the federal monitor and remain focused on building power for workers.”
A source familiar with the investigation said the benefit in question is not a benefit specific to Fain’s fiancee and her sister, but rather that National Training Center employees have not had a raise in several years and negotiations covering these employees are a routine aspect of negotiations with the Detroit Three automakers.
Time will tell what actually happened here and it’s possible there were no shenanigans. Either way, not cooperating with the federal monitor is a bad look.
What I’m Listening To On The Train While Writing TMD
Yesterday I was on a plane. Today I’m on a train, writing about cars, listening to a song about roads. That’s right, let’s listen to “Take me home, country roads” from John Denver who is, so far as I can tell, the freakin’ best.
The Big Question
How much cheaper does an EV need to be per year for you to consider it? Did you already do that math?
Didn’t we just see this same movie that currently has Stellantis in the lead role? I think the last version was starring Nissan as the company chasing profits via enshittification of the product line.
Too bad that EV study was behind a pay wall. I would of loved to see how they calculated costs. Everything I see says the deprecation of EV’s destroys any possible savings and the actual cost per mile is quite more.
South Carolina here. My shitty and decidedly unsafe 93 GMC truck cost me 10 dollars to register and 200 dollars a year to insure. My 23 Hyundai Kona EV cost me 300 dollars to register and costs 250 a month to insure.
That being said, the truck has a 30 gallon tank and gets like 7 mpg.
I just question sc’s priorities.
insurance is more about the value of the vehicle. if you valued the replacement cost to what the Kona ev is valued the insurance would probably be more on the truck than the Kona.
Yep, replacing my old as beater truck here in bfe s.c. would literally cost me *hundreds*
They use taxes on gas/diesel for roads right? So electric car owners not buying gasoline are getting a free ride on the backs of those buying those fuels. At least that’s how I understand it.
Virginia taxes diesel at a higher rate than gasoline, as semi trucks cause more wear on the road than a passenger vehicle. If you have a diesel vehicle under a certain GWVR, they rebate the difference in tax to you.
I don’t know of a better way, short of a “per mile” tax (that is very invasive) to fairly tax people who drive on public roads.
I was commuting 24 miles round trip, and at the time calculated that my fuel-only commuting cost was about $80 a month. I got laid off and my new job is 50 miles round trip, so I would be spending $160 a month in gas. I now drive an EV and almost entirely charge at work. Car was $14k after incentives, and I plan to keep it 2-3 years and hopefully get $10-12k for it. So assuming the worst case I will have paid $166 a month to drive the EV and saved almost $160 a month in gas. Insurance is a bit more than the ICE car, but I now have ventilated seats and other creature comforts I didn’t before. Not bad at all!
I am not confident your depreciation expectations will be realized
I bought the car for $21k at 4 years old and 50k miles. I feel like expecting to get $10k at 6-7 years and 70k miles is pretty conservative. At this point about 8 months into owning the CarVana offer is $17k.
“Maine “de-regulated” its energy sector in 2000, leading to much higher rates…”
Working exactly as intended.
UAW domos seem to go to jail at about the same frequency as Illinois governors. I realize the salary is pocket money these days (roughly a quarter mil) but they all know that when they sign up for the job.
Maine and West Virginia have something else in common. They also were originally parts of other states – West Virginia obviously was part of the Virginia until the Civil War. Maine was part of Massachusetts until 1820. And also like West Virginia, Maine was born of the civil war – it was split as part or the Missouri Compromise: Maine was a compromise to balance the number of slave states when Missouri became a state.
I don’t need a BEV to be cheaper, I need a BEV that I like to be made.
At this point I’d settle for a 2 Door Wrangler 4xe.
Yes. (Not the 4xe I don’t want a hybrid but the whole bev thing I want part… And can afford)
Fair enough. I personally want a BEV Wrangler, but that’s not coming till 2028 if I’m remembering right, which means I’ll have been out of the new automobile market for 2 years by then.
I don’t need an EV to be cheaper to consider it. I need Houston to fix its grid to where I don’t have to worry about being without power for weeks at a time when I need it to power my house and my car.
How do you get power for gas pumps?
Usually a generator.
You can use that to power an ev.
Really very very interested in that methodology. I don’t see how EVs with higher purchase prices, higher insurance, and lower residual values can possibly have a lower 5-year TCO if comparing apples to apples. Depreciation dominates TCO of new vehicles to the point fuel is nearly irrelevant.
You speak with wisdom. Until battery life is well understood, long term costs are difficult to quantify. If I’m still alive, I plan on picking up a 10 yr old Tesla for pocket money as a local grocery getter.
Time to do it! 2014 Tesla Model S are for sale all over. They aren’t going for pocket change though, most likely because of seeming to defy expectations and still have real world (Urban and suburban areas, where 86% of US citizens live) useful battery capacity.
I can’t really differentiate any new “normal” cars on the roads from the other eggs that are ~5 years old but hot damn do I notice every new 10th gen Accord on the road.
Of course the EV mandates were over optimistic. Anyone who knew anything about the car industry could figure that out as soon as they were announced. I believe my stance at the time was that the mandates were political grandstanding by people who knew they wouldn’t still be in office by the time the target date rolled around, and I don’t see any particular reason to change that position today.
Also, Stellantis is screwed. They have almost no desirable product and Tavares doesn’t seem to have a clue what he’s doing. They probably just need to fire back up the Charger and Challenger lines again to hold them over until they can come up with something new that people want to buy, if that’s even possible at this point. I’m not convinced they still have the design and engineering talent to pull it off though.
Compared my Tesla MY LR AWD to a Toyota RAV4 Hybrid AWD. The Tesla is $3000 cheaper to energize over 5 years for me at my gas prices and electricity rates. Having net metered rooftop solar swings the equation further in the EV’s favor. Both vehicles would have been the same out the door after the tax credit is factored in.
That said, it’s really nice not stopping at a gas station and doing most charging at home.
Oil changes? Air filters? Plugs and wires if you go too far past 5 yrs? Trans flush, differential drain and fill…. Grab that RAV4 Owners manual and find more savings to brag about.
How is running my individual numbers and posting about them bragging?
Sorry, not meant to be mean.
Should have said celebrate.
“How much cheaper does an EV need to be per year for you to consider it? Did you already do that math?”
I’ve done the math many times. And you can too:
Go to the EPA’s web site and compare a range of up to 4 PHEVs side by side. Pacifica PHEV, Volt, Accord, RAV4, Prius Prime, Fusion, whatever. Then customize the number to reflect your own situation. That is the best apples to apples comparison of running costs I can get.
I prefer this method as it is a much fairer comparison of energy costs. Trying to compare, say a Tesla 3 to a Civic is very much apples to grapes whereas with a PHEV insurance, leasing, incentives, consumables, luxury, performance and other metrics are exactly the same for the same car using either gasoline or electricity.
For me this shows the break even point even at PG&E’s overnight charging rates is typically higher than the local cost of a gallon of regular. So I really question JD Powah’s methodology here.
That John Denver’s full of shit man.
Did the math for our second car (that we use exclusively city). Compared a used e-golf with a used gti, equivalently equipped. Given that this is used only in the city, performance is about the same. Would be different if I spent all day on the autobahn, but instead I live 3 miles from the center of the city.
Non-financial costs?
For me it was a no-brainer.
Availability: GTI
C’mon VW, bring us a new e-golf. And not some I-whatever crap.
I keep coming up with a used hybrid winning on the numbers, I get mad and don’t buy one. I may follow your example to break out of this loop.
Honestly after 6 years with only a minivan, having a little hatchback again is a blast. I thought the e-golf would be slow and boring but responsible but it honestly feels like driving a go-kart in the best way. It has the same feel of skipping around bumpy corners that my early 90s miata had.
Plus all the torque makes it feel super fast, then you look down and you’re at the speed limit and not actually driving like a knob.
I love my e-golf, and the GTI/Sportwagen comparison vs e-golf is exactly how I ended up with mine too. Last year it cost about $160 to charge at home and travel 6500 miles.
Maine also has an onerous car tax that must be paid annually and is based on the original MSRP. Maybe that’s affecting this study?
https://www.maine.gov/revenue/taxes/property-tax/excise-tax
Virginia also has an annual “personal property tax” on vehicles based on like a KBB value for the car. Sales tax when you buy it; each Fall (just in time for Christmas), a check to write to the city for the privilege of owning my car. It discourages me from buying a more expensive car. Beaters forever, lol.
Listen to the Toots and the Maytals version of Country Roads. Much, much, much better! Much!
Thanks for the tip!
Their version of Louie Louie is also awesome!
Indeed! And let’s not forget Pressure Drop.
*Not safe for an automotive website*
I don’t think Stellantis understands the US market at all. Nothing they have been working towards seems to bode well for the upcoming market. They seem to be abandoning their core market for Dodge, the new Rams seem compelling but I’m not convinced they are what truck buyers want and even the Jeep brand seems to have lost enthusiasm behind it from a few years ago.
The Wrangler used to print money as it was the only vehicle focused on off-road above all else. Now the Bronco and a fleet of new Toyotas are on board to challenge the top dog. They may not be solid-axles but they are really compelling products.
Definitely Jeep is a weird one because I’m just not sure how they messed it up. All they had to do was keep the Wrangler brand strong and then shove enough of those styling cues into CUVs to get people to buy into the jeep brand but they let all of those products languish. Ram and Dodge have told thier customer base for years that a Hemi was the gold standard to aspire to now they won’t even have a v8 to offer.
Killing the Cherokee and therefore an entry-level off-roader was probably not the best move. Maybe at the time but they could have brought it back. The compass should be called the Cherokee and it should have a boxier, masculine presence with a two-speed transfer case. The price and off-road abilities are spot-on. From there, just offer a crap-ton of bolt-on dealer installed accessories and market it with overland youtubers.
If a new EV has lower running costs than ICE, I have to imagine that a 3 year old used EV has MUCH lower running costs than a 3 year old ICE. You have 5 years of powertrain and battery warranty left on most 3 year old EV’s and they depreciated way faster than their ICE equivalents. Plus it’s hard to mess up regular maintenance on a 3 year old EV, so there’s much less to worry about with buying a used one. If my kid’s 2008 ICE died, we would totally be getting him a used Bolt as a replacement.
Yes!
I’d be curious to see their methedology seems to be behind a paywall.
I ran the numbers, and there are too many unknowns in my case to really nail down a number, fuel costs (going forward), electric costs (going forward), insurance, mainteannce, resale value, miles driven per year, and rebates. I put this in a spreadsheet a few years ago and you can fiddle with these variables by realtively small amounts and show EV’s are a bargin even if they are 15k more expensive upfront, or a rip-off even if they are the same price as ice upfront.
Yeah, if you assume you always charge at home, EVs look fantastic. If you assume you’ll always be paying for L3 charging, they look awful. And the truth, for most people, falls somewhere between the two. I don’t take many longer trips, so my numbers look great. I also know people for whom the numbers just don’t work.
This study won’t give you a single insight without the assumptions they made, and it probably won’t help any individual truly see how an EV would work for them.
Music grump mode activate: I hate that song so much, and only in part because the fixation on it ruined Studio Ghibli’s Whisper of the Heart.
I can see a used EV in the family fleet mix here in the future for all the local errands we do. Home charging is no problem either. Maybe a used Bolt? I don’t need to run the numbers knowing used EVs are good deals and I have free electricity (tenant pays.)
Right now we have 5 cars on the road for 3 drivers (plus we get Mom’s car for the winter) so I need to wait until 1 or 2 of the junkers get taken off the road.