Are electric vehicle sales declining? Ford stops production of SUV's.

0:00 Speaker 1 Well, electric vehicles, Where the heck are we? Which way is the country going? What is the consumer feeling? But us this morning is gabed out and he’s with TV Cowing and previously with JP Morgan. He’s an expert in battery technology, EV’s charging stations, oil and gas. Well, Gabe, you know a little bit about everything in that department.

0:25 Speaker 2 Yeah, that’s right, John, Thanks for having me happy to try to make sense of it all. As far as where we are on the EV trajectory, we’re certainly in a little bit of a speed bump. Over the last several years in the US, EV new EV sales have grown at an average of about fifty percent year of

0:41 a year, and that looks like it’s slowing to about ten percent this year. And the reason is twofold. I think there’s two big issues facing consumers, affordability and charging infrastructure or lack thereof. So that’s that’s kind of where we stand today. I think is battery technology improves and battery prices continue to improve, that will help affordability. And

1:03 then on the charging infrastructure front, we can get into some of the stuff going on there, but generally we’re well behind in terms of new installations and the chargers that are in the ground are unreliable.

1:17 Speaker 1 Understood. Now, all of a sudden, Ford has made another You know, they’ve been losing a ton of money on evs and they have scaled back the amount of capital expenditures they’re putting in there. Give us the Ford position.

1:36 Speaker 2 Yeah, sure, So, Ford, as you noted, yesterday, announced that they’re making several changes to its product portfolio, pushing out a new electric commercial van to twenty twenty six, and then two new electric pickup trucks to twenty twenty seven, and they’re scrapping the three row electric suv Instead, they’re now focusing on hybrid cars because that seems to be

2:02 where the consumer preference is these days versus, as I noted, full battery electric cars, which have a ton of issues around affordability and also charging those full battery electric cars. So for today, or excuse me, yesterday, made the difficult decision they would have to take almost a two billion dollars write down and special charges by making these decisions.

2:24 But ultimately it comes down to profitability. And you know, you’ve seen the headlines and the numbers. On average, the amount of losses for generates with every EV that they sell, so the company really wants to focus on profitability, and you saw the stock reacts favorably to the announcement yesterday.

2:43 And again, I think it all goes down to what’s en demand. Look like, demand for full battery electric vehicles is certainly slowing in the US. As I noted, we’ve seen fifty percent growth on average over the last three years.

2:55 That’s slowing pretty significantly, and instead what’s growing more rapidly is sales in hybrid vehicles.

3:03 Speaker 1 Let me ask you, General Motors seems like have they made any changes because General Motors was one hundred and ten percent.

3:12 Speaker 2 Four Yeah, So General Motors has also made some difficult decisions around at at the pace of providing a full electric fleet. They’ve also pushed out some new model launches with respect to Buick, and they’ve also pulled or removed their EV sales target, which once upon a time was quite ambitious. So I think the reality is set in

3:35 over the last several years that consumers are just maybe not ready for a full batter electric car, and I think it’ll take some time to get the consumer appetite to where it needs to be. So you’ve seen a lot of the car companies adjust accordingly, and I would expect that likely continues over the near term, as again

3:55 EV sales are showing, you know, certainly some challenge is.

4:02 Speaker 1 Understood. Another category, HERTZ lost a ton of money on Teslass and they finally got rid of Have they gotten rid of the entire testless fleet?

4:19 Speaker 2 Yeah, so you could. You could certainly make the argument that an electric vehicle as a rental car, it’s probably the worst use case for an electric vehicle. When you think about when most people rent cars, they’re probably driving long distances, and most evs, well they can drive, you know, two hundred to three hundred miles on a full charge.

4:41 You probably are looking or scrambling to find public charging infrastructure. So I think that was something that was that was probably rushed and not maybe fully thought out. And you’ve seen the implications to that now having to take some pretty big losses on the EV fleet but no take over time. Using evs for rental cars would make sense,

5:04 but only when the charging infrastructure situation has been fully built out, and that’s certainly not the case today. So EV’s I don’t think makes a ton of sense for rental cars today, and that’s part of the reason why it hurts ended up making the difficult decision.

5:19 Speaker 1 Understood now, all of a sudden, after that disaster, it hurts, Uber made a press release that they’re gonna buy one hundred thousand evs. Does that make any sense?

5:35 Speaker 2 Yeah, so, you know, again, I think it all comes down to charging infrastructure. Uber and Lyft also have electrification and sustainability goals that they hope to achieve by twenty thirty and beyond. There’s already a number of ride share drivers who are fully electric and drive Teslas and Ford Makes, et cetera. Again, it all comes down to charging infrastructure,

6:02 and some of these companies are partnering with some of the charging companies to alleviate those concerns and help the drivers find charging stations, maybe even provide drivers with home chargers so they can charge charge at home. But again, I think a big piece to this all is the infrastructure piece, and the government has struck to help with

6:21 some funding with the Nevy program five billion up to seven and a half billion to build chargers along highways. That’s been slow off the ground, but you’re starting to see stations open up and I think over time that will certainly help, got it?

6:39 Speaker 1 What else would you do? You know, it’s Sunday morning, what else would you like to tell the American people about the electric vehicles? And you believe the hyper vehicles are better?

6:53 Speaker 2 Yes, And I think for someone who maybe doesn’t have access to home charging and is concerned about the eight of the public infrastructure, hybrid vehicles probably represent a good middle ground for those customers. And also it represents a good middle ground with respect to affordability. Now, over time, like I said, I do think battery prices will continue

7:18 to move lower. They’re actually ninety percent lower relative to where they were sent to twelve years ago, and I think that trajectory will continue. But I think for now, if you’re thinking about going electric, and you’re maybe concerned about going with a full battery electric, a hybrid vehicle could represent a nice middle ground for you. They’re great

7:37 cars overall, hybrids and battery electric. But I think ultimately, like I said, it comes down to consumer choice and preference, and there’s still plenty of options out there.

7:45 Speaker 1 Understood. Well, thank you so much for this coming on this Sunday morning and briefing the American people what’s happening in electric vehicles me I still prefer gas vehicles. I don’t need the inconvenience, but thank you again.

8:02 Speaker 2 Yeah, thanks Sean anytime.