Toyota’s Only Electric Car Is Struggling To Find Buyers Who Don’t Already Own A Toyota

Cars are sometimes described as “irrational purchases,” though I don’t entirely buy that. We live in a society that is designed around vehicles, and it’s not irrational for people to have tastes, even if lately it means people buying more car (or truck) than they really need. The one consumer who seems to be the most rational is the EV buyer.

There’s a new report out that shows the “conquest rate” of EVs that have been on sale for a while, and the extremely mid-Toyota bZ4x (Toyota’s only EV sold in North America) is the one that’s least likely to find customers from other brands. On the other side of this is the Ioniq 5, which is definitely not mid.

I haven’t driven a VW ID.3, mostly because they don’t sell it here, but Volkswagen has found a way to sell them: Make them cheaper. Amazing!

The one EV buyer who was maybe not rational was Hertz. The car rental company shot itself in the foot when it rode a wave of EV hype and bought a bunch of electric cars that few wanted to rent. Hertz is still paying the price, even though it’s finally sold off a big chunk of its EV fleet.

Nissan had a rough quarter, which isn’t a surprise, and it is finally talking about closing factories and cutting back. In total, Nissan is looking to remove a million units of capacity.

The Hyundai Ioniq 5 Is The Conquest King

Do you know what’s a good EV? The Hyundai Ioniq 5. It looks good. It’s not bad to drive. It gets decent range and, especially if you lease it, it’s not a bad deal. Hyundai is still a brand on the rise, so it has a high conquest rate (i.e. people from another brand buying its cars) relative to more established companies.

According to this report from S&P Global Mobility, registration data in the United States shows that Hyundai has a conquest rate of about 52.5%. The Ioniq 5? That car’s conquest rate was 74.2%, higher than any other mainstream electric car that was tracked (Tesla is not on this list).

In close second was the Cadillac Lyriq at 72.6% and, somewhat surprisingly, the GMC Hummer EV (pickup) at 71.3%. The Kia EV6, which is a platform-mate of the Hyundai, tied with the Volkswagen ID.4 at 57.4%.

You can see the whole range and, at the bottom, is the Toyota bZ4x, which is a car that I assume exists almost entirely for three kinds of buyers:

• People who want an EV and will only buy a Toyota.
• People who saw a very, very cheap lease for a Toyota and jumped at it.
• Uber drivers.

Recognizing the issue, Toyota has lowered the price of the bZ4x by $6,000, and, even then, its lackluster range (252 miles) and charging speeds (peak 150 kW CCS) make that not a great deal. Toyota’s overall conquest rate is low, but a lot of that’s due to Toyota being supply-limited and having high loyalty rates.

The F-150 Lightning and Mach-E also do better than the Ford average, which shows the tough position that Ford is in right now with regard to electrification. It’s both making popular EVs and also doing so in a way that’s so far from profitable it’s not like more sales are going to turn it around for the automaker.

The VW ID.3 Shows There’s A Butt For Every Seat At The Right Price

Is Volkswagen too serious? Volkswagen used to be about love, right? When did that change? I’m hopeful that the fun ID.Buzz helps Volkswagen see that it should embrace the love again.

In Europe, at least, VW has gone a little softer with its “Lease it, love it, fall in love again” campaign centered around leasing VW ID.3s at a rate even cheaper than the Volkswagen Golf. According to Manager Magazine, it’s working (translated):

In 2024, more than 6,000 customers are expected to have taken advantage of the offer; only 2,500 were planned. And this year, too, expectations were exceeded. According to an internal email exchange available to manager magazin, manufacturers and retailers had already exceeded the target of 5,000 leasing contracts several days before the end of the campaign.

The registration figures for the ID.3 show how extraordinary the values ​​are: Last year, more than a quarter of the 20,101 newly registered models are likely to have come from the special campaign in February.

I think this goes to show that there’s a price level where people are willing to gamble on EV ownership, and most electric cars outside of China aren’t quite there yet.

Hertz Lost $2.9 Billion In 2024, Finally Offloaded Its EV Fleet

Hertz made the big gamble to buy a bunch of EVs, especially from Tesla, at the height of EV hype. It didn’t work out for the company. Renters didn’t seem to want to hassle with recharging a car, and, perhaps worse, the company assumed a lower operating cost that never materialized.

The company decided to reverse course and sell many of its EVs at a loss, but they bought high and, when Tesla and BYD started a global EV price war, saw depreciation soar. According to the company’s 2024 financial report, the company lost $2.9 billion on $9.0 billion of revenue.

Some of this is still tied to EVs, as the company is trying to improve its depreciation per unit, which jumped well above the $300 rate it wants to hit.

Per Bloomberg:

The company showed improvement in depreciation costs, which fell 16% to $422 a vehicle per month, but that is still high compared to traditional levels of less than $300. Hertz said it is changing over vehicles in its fleet to bring its depreciation costs in line with normal levels.

I know people who have purchased ex-rental fleet EVs and gotten a great deal on them, so not everyone lost in this transaction.

Update: A Hertz spokesperson had this to say:

We’ve sold the 30K that we previously announced last year– not all of our EV fleet. As we said during our earnings call and previous earnings, EVs will continue be a part of our fleet as we recognize their strategic value in markets with established product market fit and infrastructure, particularly in our rideshare rental program partnerships with Uber and Lyft, where drivers receive advantageous partner incentives for choosing EVs over traditional ICE vehicles, and in our international markets.

Additionally, as part of the normal course of business, we will continue to sell both ICE and EVs through our sales channels, including direct to consumers through Hertz Car Sales. As one of the world’s largest used car dealers we are excited about the unique opportunity that Hertz Car Sales presents to generate greater returns and as a result are prioritizing making retail our primary car selling channel.

Nissan Will Finally Agree To Cut Plants

It’s a terrible situation when a company has to lay people off or, in the case of automakers, stop production at whole facilities. These moves not only harm individuals, they can have a huge and dramatic impact on communities.

So it’s not a good thing that Nissan has to reduce its capacity over the next few years through a mixture of layoffs, shift reductions, and plant closures. It’s terrible.

If the company is to survive, though, it needs to make a major correction. Nissan, it seems, is ready to make that correction. Here are the first steps, according to Automotive News:

Nissan CEO Makoto Uchida, desperately trying to dig out from back-to-back quarterly net losses, plans to shutter three factories in the next two years, cut shifts at U.S. plants, slash executive ranks by 20 percent and cast about for new partners in a bid to keep the Japanese carmaker going.

Uchida outlined those steps and more Feb. 13 as he updated the turnaround plan he unveiled in November and announced tumbling profits in the latest financial quarter.

The embattled Nissan Motor Co. boss also defended his board’s decision to pull the plug on merger talks with Honda Motor Co., a move that was finalized by both companies earlier in the day.

Uchida said Honda’s revised proposal to make Nissan a subsidiary was unacceptable.

The other thing Nissan has to do is make cars people want to buy and, at least with the Kicks and maybe the new Murano, there’s some progress in that direction.

What I’m Listening To While Writing TMD

It’s Wyclef and the Refugee All-Stars doing their take on “We Trying To Stay Alive.” Great stuff.

The Big Question

If you were to buy an EV, would it be from the brand of the car you already own? Good luck Scion owners.