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The withering dream of a cheap American electric car

(www.wsj.com)
152 points voisin | 16 comments | 17 Nov 24 23:52 UTC | HN request time: 0.599s | source | bottom
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bartvk ◴[18 Nov 24 00:05 UTC] No.42168473[source]▶
https://archive.ph/9oIT4

I wish it would have adjusted for inflation. One quote: "The average transaction price for a new vehicle sold in the U.S. last month was $48,623, according to Kelley Blue Book, roughly $10,000 higher than in 2019, before the pandemic." However, about 9200 euros of that is due to inflation according to this calculator: https://www.usinflationcalculator.com/

That's a nitpick though. All in all, an interesting article, which can be summarized as: the EV car market is lacking demand, and car makers definitely don't want to make cheap EVs since it's already so hard.

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AgentOrange1234 ◴[18 Nov 24 00:21 UTC] No.42168570[source]▶
If even ICE cars are now super expensive, why isn’t this a screaming opportunity for some auto manufacturer to target the low end of the market?

I’ve never spent more than 20k for a car. With prices like this, I’m just going to keep my old one as long as I can.

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1. lmm ◴[18 Nov 24 00:58 UTC] No.42168743[source]▶
IIRC the US has some ass-backwards fuel economy laws that mean it's essentially illegal to produce small cars.

Also there's enough demand for high-margin cars to max out available production capacity, and would you want to be making major investments in ICE car production right now?

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2. voisin ◴[18 Nov 24 03:55 UTC] No.42169592[source]▶
I don’t think companies are penalized for producing small cars so much as larger vehicles like trucks and SUVs are incentivized to become larger to sit outside the rules as commercial vehicles even though everyone knows that only a small percentage are used for commercial purposes.
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3. millerm ◴[18 Nov 24 14:24 UTC] No.42172519[source]▶
Exactly. The large gas guzzling, glorified grocery getters are just an easy out for manufacturers to subvert the requirements made for smaller vehicles (which was completely short-sited, or it was planned by lobbyists). It was simply easier for these companies to continue doing what they were doing with what they had. Give a company and alternative that costs them nothing, then they will do nothing. We need a new fuel standard. A truck or SUV purchased after <some date> then you pay an extra $<some dollar amount> per gallon. Yeah, I know the implementation is a problem, but I am simply throwing out an idea. Perhaps they yearly registration is now an extra $2000/year. They already screw EV owners in many states. I pay an extra $220 a year for my car, and that is ridiculous. I have owned my car for 5 1/2 years, and I have 24k miles on it. This tax is completely unfair and has no basis in reality for "road tax".
4. josefresco ◴[18 Nov 24 14:26 UTC] No.42172533[source]▶
I drive a 2023 Kida Rio 5 which is small, simple and fuel efficient (combined 40 MPG). Kia is killing it though, because not enough Americans bought them. They (Americans) instead buy the larger Forte. I specifically told them I wanted the Rio 5, and after a few calls they found one (1!) and proceeded to mark it up $2k - still worth it.
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5. kube-system ◴[18 Nov 24 14:38 UTC] No.42172631[source]▶
Not only do Americans tend to buy larger vehicles, but CAFE regulations encourage automakers to increase the footprint (area between the wheels) of the cars they offer. This is another reason the Rio is (and other small cars are) discontinued.

CAFE regulations (in a nutshell) require automakers' vehicles to meet a particular fuel economy per size of footprint, averaged across the vehicles they sell. So, they can meet the standards either by increasing the footprint of the vehicle, or by increasing the fuel economy of their vehicles, or both.

6. weberer ◴[18 Nov 24 14:50 UTC] No.42172776[source]▶
Its not fuel economy laws, its the highway safety laws. Light cars are usually more efficient.

Maybe you're thinking of the strict emission laws regarding NOx and SOx that prevent diesel cars.

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7. kube-system ◴[18 Nov 24 14:50 UTC] No.42172779[source]▶
> I don’t think companies are penalized for producing small cars

They are. CAFE target formulas have the footprint of the vehicle(s) in the denominator. Larger footprint = easier fuel economy targets

https://www.nhtsa.gov/sites/nhtsa.gov/files/cafe-ghg_my_2012...

8. _heimdall ◴[18 Nov 24 14:53 UTC] No.42172808[source]▶
Unless I'm mistaken, a big reason we don't have smaller cars in the US (other than consumer demand) is related to safety regulations rather than fuel economy laws.

> would you want to be making major investments in ICE car production right now?

I would if I were a car manufacturer, at least in addition to other projects that I may have investing in alternative fuels. I haven't dug deeply into all the issues VW is dealing with today, but it does seem at least in part due to an over investment in electric vehicles.

If I were really in that situation, though, I'd personally be investing heavily in designs more similar to the Chevy Volt with an electric drivetrain and onboard gas generator. Range anxiety goes away without having to pack a massive battery pack in the car, and the gas engine is much less stressed meaning easier maintenance and a longer life.

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9. kube-system ◴[18 Nov 24 14:54 UTC] No.42172826[source]▶
> Light cars are usually more efficient.

That's true, but US fuel economy standards don't actually require vehicles to be more fuel efficient in a direct way. They require vehicles to be a certain fuel efficiency for their footprint.

Unintuitively, while making a car larger doesn't make it more fuel efficient, it might make it better meet US fuel economy standards.

10. WorldMaker ◴[18 Nov 24 14:54 UTC] No.42172828[source]▶
It's never been illegal to produce small cars in the US. It's a tragedy of the commons that the more over-sized cars on the road the more intimidated the average driver and the more compensation in the sizes of other cars to "keep up". Over-sized SUVs and trucks aren't penalized enough for their domination and essentially destruction of the commons space.

That's also what fuels some of the demand for high-margin cars, because of the perverse incentive that over-sized delivers higher margins. People will be too easily convinced to pay extra (generally at linear relationship) for size and there's not a linear relationship in size versus margins.

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11. EricE ◴[18 Nov 24 14:59 UTC] No.42172874[source]▶
Nope, manufacturers get penalized by CAFE regulations if they have too many cars of certain types. It's batshit insane.
12. PittleyDunkin ◴[18 Nov 24 15:33 UTC] No.42173303[source]▶
> It's never been illegal to produce small cars in the US

I think they're referring to the practice of making cars larger to pass as trucks so they are faced with more lax fuel-efficiency standards.

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13. WorldMaker ◴[18 Nov 24 17:05 UTC] No.42174398{3}[source]▶
The biggest reason that works is that most states dropped per-axle weight taxes for trucks (which would much more directly pay for road wear-and-tear than gas taxes, and which is why such taxes existed in the first place) and the ones that didn't carved out too many "personal vehicle" loopholes for trucks. It's a curious lack of disincentives (and enforcement of such) for larger vehicles more than "small cars are illegal". Things like CAFE standards could have been met in smarter ways if they were properly incentivized. (Plus CAFE standards were in part set with an expectation of not "double dipping" versus vehicle weight taxes. That the vehicle weight taxes disappeared is the smoking gun, in some ways.) Small cars aren't incentivized enough, larger vehicles aren't disincentivized enough. Especially with today's wear and tear on roads, the states complaining that EVs are dropping gas taxes too fast, it's a wild shame that we aren't seeing a faster return to per-axle vehicle taxes.
14. kevin_thibedeau ◴[18 Nov 24 17:30 UTC] No.42174688{3}[source]▶
Even without the bogus classifications, the EPA emissions regulations are inversely proportional to the footprint of the car. That rewards manufacturers for not offering small cars.

The "light truck" designation is made on the basis of features like cargo capacity and ground clearance. The Subaru Outback was properly classified as a car until the smaller PT Cruiser got its truck designation and they justifiably complained.

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15. snozolli ◴[18 Nov 24 18:53 UTC] No.42175611[source]▶
Unless I'm mistaken, a big reason we don't have smaller cars in the US (other than consumer demand) is related to safety regulations rather than fuel economy laws.

It's a combination of everything. Trucks keep getting bigger because it's how they game the fuel efficiency requirements. Small cars get bigger because of safety standards. Consumers in the US don't really want small cars, partly because we've gotten bigger a partly because it's terrifying to be on the road with the aforementioned trucks.

Similarly, cars seem really boring these days because most people want something big enough (i.e. CUV like the RAV4), and because safety standards for things like pedestrian impact have constrained the designers. So, we end up with a bunch of CUVs that I can't tell apart.

16. Kon-Peki ◴[19 Nov 24 19:39 UTC] No.42187267{4}[source]▶
... yet the Outback is still around and the PT Cruiser is not. Why? Well, the Outback has a thousand tiny details that add up to make it a very useful vehicle, while the PT Cruiser was all about exploiting nostalgia and finding regulatory loopholes to create/increase profit margin.

It's almost like there is a lesson to be learned. Make a "cheap" electric car worth buying, and people will buy it.