So if I understand this correctly, Ford is shutting down civilian versions of these hybrid cars because so many cops want them. This is really confusing to me, as the American brands have been calling electric/hybrid vehicles a failure for the last quarter. How does this add up?
For one, despite the headlines to the contrary EV sales have been growing. It's just that EV inventory has been growing as well as production scales up. We have flipped from COVID scarcity to a world where dealers and automakers need to put the legwork in to sell EVs like they do other vehicles.
For another, I think the TCO benefits of EVs will be noticed first by organizations that make these kinds of purchasing decisions based on spreadsheet budgeting. Doing the math on a more expensive EV vs fuel savings over a long term purchase is a bit harder for a consumer. The more expensive vehicle might make it hard to get financing, or cost you more interest. If you don't put a ton of miles on your vehicle, the savings may not add up as quickly.
For a fleet vehicle purchaser and operator, the miles, fuel costs, and potential savings are all fairly easy to calculate. A police department can run the math on gas and oil changes and figure out pretty quickly whether a bit more spent for an EV or PHEV will pay itself back.
This is absolutely correct. Anytime you get an accountant involved they calculate total operating costs and use those numbers. Another thing about fleet operators especially government ones is they get vendor financing at very low rates. So capital cost just becomes another monthly number.
Most people don't do that when they chose to buy a car but they absolutely should. Because the capital cost of ownership is only something like 30% of the total cost or owning a vehicle. And the other costs vary wildly between models.
US EV sales are up almost 60% year over year! It's the opposite of a downturn. US legacy auto is really hurting on EV sales though, because of lack of product, higher prices even more unattractive because of high interest rates, low production, plus price reductions by Tesla and other more nimble companies are making the legacy auto lose out.
Losers: Ford, GM, Toyota
Winners: Tesla, Kia, Rivian. Many euro brands doing pretty well in this transition, way better than Detroit.
Near future killer car: Volvo EX30, a ~$35k smaller suv type car, also available with awd etc. This is the car that big auto should make. The Tesla Y is in this class too. [1]. I wish I was an auto analyst, it seems more fun than being a software engineer at times.
Guess when you think internal combustion (ICE) cars will reach their max annual sales? It's a trick question because it happened in 2019! Since then the growth has been in EVs. Tesla is almost at 2 million cars a year now, world wide.
That "ev sales are going down" is an amazing bit of incorrect propaganda. How about up ~60% year over year [2]
What's happening is legacy auto is doing terrible and losing market share, either not making enough vehicles (gm & ford, toyota), dealers marking them up too much over list price (gm, ford, toyota), etc. GM was moving everything to a new battery pack technology (ultium) but they have unclear problems and they can't make the battery packs at scale; gm has enormous demand for the huge hummer and they made fewer in the first half of the year than last year. Toyota can't make a decent ev (it's on purpose). Japanese brands haven't done a good job overall on making attractive EVs and they are losing major market share in China, because China loves EVs. European EV sales are also growing.
That $30k Volvo is actually a Geely and just re-branded as a Volvo. Because the Chinese company Geely owns Volvo.
And Geely may be a great Chinese car manufacturer for Chinese customers, but not for US customers.
In the U.S., the latest reliability survey shows that Tesla trails all the other U.S. vehicle manufacturers with over 100 customer reported flaws per 1k vehicles sold. However, in China, they have the same flaw rate, but this now puts them way ahead of any other manufacturer in China -- I think the average there is like 300 flaws per thousand.
So, Geely is not the direction I would go.
The new Polestar vehicles, maybe. Depends on who did all the design and engineering -- was it Volvo or Geely?
Ford's hybrid options have almost always been among the worst in the market.
The article points out it's a terrible hybrid that barely gets 2mpg better mileage on the EPA cycle.
It's not cost effective for your average consumer, and there are much better hybrids available, so consumers aren't buying them.
However, police spend so much time idling and have so much electrical gear, they see a much, much bigger gas savings that aren't reflected by the EPA cycle. They also put lots of miles on the vehicles, so even if it was only 2mpg, that'd still justify the extra capex...but they also get all the benefits of powering all their gear.
Keep in mind that cop cars go through regular lead acid batteries like candy.
