This week marks the end of the electric car. By years end, all OEMs but Tesla will be announcing their exist from the market and Tesla will go shortly thereafter in 2016.
Kind of a downer prediction to start off with eh?
Well let’s hope not.
Why do people buy new cars? I guess I don’t really know.
My father was born during the depression, actually he thinks he CAUSED the depression as he was born in June of 1929 a few months before the stock market crash. I like to think he was prudent with his funds, but the truth is, he could squeeze a nickle until the Buffalo shit all over itself.
He really DID install flourescent lights in our new home in 1959. I don’t mean he installed them. We didn’t have any OTHER kind of lighting until 10 years later. Because they were inexpensive to operate. As a result, our house had this garrish harsh blue light that flickered. Everybody else’s house had “yellow” light that was “still”. A clear sign that we were different.
We also had the first “central air conditioning” probably of any home in town. Of course, he thought air conditioning was to bring the house temperature just down to 89 degrees in July so you would actually be lounging around in the luxury of “below 90” degree temperatures inside. It just never occured to him that you could cool it to 74. Why? It’s summer.
And if anyone were to actually touch the thermostat….well….I don’t actually know what would happen. But something bad…
And so I naturally learned to buy cars from him. He seemed like the knowledgeable adult on the scene. My mother wouldn’t dream of buying a car. He had to buy it for her. Sometimes after much pleading and tears…
And he always bought cars the same way. They HAD to be exactly two years old and they HAD to have exactly 10,000 miles on them. Why? Depreciation. In fact for years I had the Great Depression and Depreciation all confused in my young mind. I didn’t know exactly what Depreciation was, but I knew it was very very bad, and had something to do with new cars. People who bought new cars were functional illiterates who shouldn’t be allowed to pull a little red wagon down the road, much less drive a car. New cars were for stupid people, period.
So I naturally thought they were manufactured initially for morons, who broke them in. And like wine, they only became acceptable after at least two years aging.
Similarly tires. You bought two new tires for the front of the car. Put the tires from the front on the back. And so your tires never wore out at the same time. So you never had to buy four at the same time. It’s just how tires were done.
Its why it is so important to have a father. So you learn these things. I am told that now over half the children born in America have no fathers. How do all those women DO that? In my day, two were REQUIRED. I think by law. And they HAD to be different sexes too. Modern medicine is not only truly a miracle, but you may ALSO be entitled to SUBSTANTIAL compensation. Apparently women have not only won the right to murder their offspring before birth, but also to create them with no male assistance at all. What a country!
In any event, if you DID foolishly buy a brand new car, for say $3000, you would find that at the MINUTE you drove it off the lot, it was instantly worth $2500. And over the next year, it would decline further to $2200. And after that, while it continued to decline in value as the miles accrued, the rate of decline declined. And so you wanted to avoid the first two years of depreciation. Ergo, buy cars that were two years old and had 10,000 miles on them. That would be a low mileage car that had already taken the depreciation hit.
And so that was how I bought cars for the most part, until selling my company for $38.5 million. At that point, I figured “What the Hell.” And that’s how I became a moron with a brand new Lexus.
But they do sell 15 million new cars each year. So there is apparently either no shortage of new-money millionaires, or a plentitude of morons.
Auto dealerships have for the most part offered a less than warmish greeting to celebrate the rebirth of the electric car. Most of the owners of these dealerships DO know a bit about selling automobiles in a very competitive business. And from their point of view, it all kind of hangs together.
First, the major profit center for dealerships is not the sale of new cars. That’s how they prime the pump and keep the river flowing. The source of real cash flow is warranty maintenance work. Compensated monthly in one big fat check from the manufacturer. The electric car promises little and for the most part delivers even less in this respect.
But it goes beyond…. most of these dealers have endured every fad imaginable in the past 50 years. Every time gasoline goes up or becomes short in supply, the hoard roars past their acres of gas guzzlers to fight over the handful of economy cars they had in the corner. And as soon as the price of gasoline goes down, they storm past the acres of cheap little economy cars to fight over the handful of SUV behemoths left out back for farmers.
I recently found a brand new Ford eTransit Connect that had gone unsold for three years at a Ford dealer. They had over $50,000 in the vehicle – which had originally MSRP of $58,575. The problem of course was that it had sat unclaimed until the battery drained down to zero. At which point, they had no clue how to revive it. Azure Dynamics, who had offered a two year warranty on the vehicle, had gone bankrupt and was no more.
So what are they to do with the vehicle? Here it sits. A little patina of dust over a brand new paint job. No miles. And none likely. How can they sell it? Who’s going to buy a brand new Ford from a Ford dealership, that doesnt’ work, and that the Ford dealership can do NOTHING to get it to work? What do you discount that TO? I made em an offer to part it out. It’s so low they almost can’t bother, but there aren’t many other bidders. Same problem. So they’re evaluating what it would take to convert it BACK to gasoline. What difference does it make? The things only sell for $24k with gasoline power brand new. What can they get for a hacked up reconvert? And when they find out what it really would take, they could be in negative numbers.
I mentioned this in the EVTV Hack Team mailing list. Byron Izbenhaard instantly located another one via Google and bought it for $6000 within a day.
Also on the list was Christopher Brand. He came to the end of a 39 month lease and was startled to learn Nissan was heavily discounting “residual value” on the lease. Like by about $5000. He could KEEP his perfectly good Nissan Leaf for $11,500 – a car that originally listed for some $38,000.
Within a couple days, Hack Teamers Mark Weisheimer and Damien Maguire had both purchased off-lease Leafs. Mark opted for a very low mileage “loaded” model with everything you can get on a Leaf for $13,500. His wife endures a 4 mile commute.
Damien, in Ireland, paid $11,000 for one with a few easily cured problems. But he’s going to part it out to finish off his BMW “der Panzer” build. And meanwhile do some Leaf Fast Charge CHAdeMO data logging for us.
I found FOUR off-lease Nissan Leaf SL’s, all with less than 40,000 miles at a dealer in Houston, Texas on eBay at $10,495. No, I didn’t buy. And there’s a reason.
For anyone jealous that they “missed” these deals, fear not. This is, as Churchill noted, not the BEGINNING of the end. It’s more the end of the beginning. Both Nissan and Chevrolet have already layed out their new 2016 models with significant upgrades in range, amenities, and re-engineering. Within months, not only will there be tens of thousands of Nissan Leafs and Chevy Volts coming off lease, but they will be technically obsolete with much more desireable iron glistening on the lot – complete with very attractive lease terms to move THEM.
Indeed, the Detroit Free Press reports that currently, with the factory shut down to retool for 2016, there are over 6,000 Chevrolet Volts languishing on dealer lots across the country – brand new and never leased. To put this in perspective, Chevrolet sold LESS than 3000 Volts in the first 3 months of the year. So they have a six month’s inventory overhang out there now, and tens of thousands of Volts coming off-lease this year to add to the pile – just in time to be obsolete in all respects compared to what really is an impressive engineering tour d’force in the 2016 model. By all accounts they REALLY did a nice job of the 2016 model.
Even mighty Tesla may have a brewing storm. They have introduced their new Model D Model S (I knew they were going to get in trouble with this nomenclature. There is a REASON Ford is not on the model ZZXY by now). And they were firestormed with trade-in/trade-ups. We recently showed a video from one viewer of a midwest Tesla service center with dozens of Model S trade-in vehicles parked wherever they could find room for them. Of so, what of California? And where ARE they parking them? Purportedly the Model X will roll late in Quarter 3. Which I think is quarter two for the rest of us not on the Tesla fiscal calendar. What will happen then?
And so I can easily see a low mileage Chevy Volt in pristine condition in our future for say $7500 and some lucky dealer happy to get it at that.
Bottom line – an unprecedented perfect storm of crashing vehicle values in the used electric car market. I guess I really mean unprecedented market COLLAPSE.
This week we celebrate exactly our six years in weekly video publication at EVTV. Our first video was uploaded May 22, 2009. At the time of our initial video, there was precisely ONE electric car available worldwide – the Tesla Roadster. It cost over $100 grand and was unobtainium for over a YEAR. There was NO second model to choose from.
And so for OUR viewers, who might be able to deal with the vagaries of repairing a used electric car, it is party time. It is RAINING inexpensive, perfectly operational electric vehicles. PARTY LIKE ROCK STAR DOGS. You can not only get them, but they have ALL the creature comforts, ABS, traction controll, airbags, power windows, bluetooth, remote controls on your iPhone – ultramodern amenities and low miles. Free coke for the kids. Clowns with balloon animals.
In every economic event, there are those who celebrate, and those who despair. There is a dark side here.
I’ve feared for years the single achillies heel of electric vehicles. Not range. Not cross country driving. Not battery failure. Depreciation.
You see, I learned to only buy cars that were TWO YEARS old and exactly 10,000 miles. Because of “depreciation.”
Whatever the realities of lithium ion cells, they really don’t matter. Everyone already KNOWS everything they need to know about batteries. We’ve had them in our flashlights. We’ve had them in our “transistorized radios”. We’ve had them in our cell phones. We’ve struggled with the lead acid starter/lights/ignition battery in our cars. There are ZERO drivers in America who have not turned the key at one frustrating, even enraging, time or another only to find a “dead” battery. It’s actually ORDINARY. An everyday experience.
We know all about batteries.
And the idea of a NEW car, with NEW batteries, brings up the question of how far can you go, how long does it take to recharge, and how long will the batteries last at all.
But the question of how long the USED batteries in the USED electric car will last is a known entity. They won’t last AT ALL. That’s why they traded it in. They’re undoubtedly SHOT.
That in reality the batteries in the typical three year-old electric car will probably last another 15 years and 200,000 miles doesn’t matter AT ALL. We already KNOW so we don’t need any new information.
And when the batteries ARE shot in the Nissan Leaf, we’re getting 45 mile range instead of 75. But we’re still averaging 39.5 miles per day. So “shot” is perfectly acceptable. But it doesn’t matter. We already KNOW what happens to batteries.
Within weeks now, it will be widely known that the depreciation on electric cars is CATASTROPHICALLY worse than the same car in ICE version. It will not matter that in the three years of Leaf ownership, the owner never bought a single gallon of gasoline for the car, and charged it completely for less than a buck every time. It just will not enter the equation.
The news will inevitably be, that if you buy an electric car, the first year’s depreciation will kill you. Leaving only morons to buy new cars. And only the most eggregiously pathetic morons to buy new electric cars. And, at the risk of repeating myself, Californians of course.
Its a classic case of perception trumping reality. Of self-fulfilling prophesy. If everyone believes the value of the electric car plummets on the event of its first sale, then it does. Period. No argument. No response. Nada. The true value is always true. And it is ALWAYS based on perception.
What does this portend of the sales of the new Nissan and CHevrolet Volt and Bolt models? It is entirely possible they will CEASE. Dealers could simply revolt and not take anymore, with their lots already crowded with unsold earlier year models and off-lease returns. They don’t HAVE to take the cars at all. And their mulish reticence at carrying the new electrics from the beginning will prove astute.
The manufacturers can then shred the new product – arguably the best electric vehicles ever produced, or write them down to such ridiculous levels that they cannibalize the sale of what they will then refer to as their “real” cars.
The Tea Party will triumphantly announce the “total” that the democrats “spent” on subsidizing electric vehicles. And California will come under intense pressure to again back off the CAFE standards requiring zero emission vehicles at all. In fact, they will be pilloried for it.
Pretty gloomy, eh? Moving into the future is not quite as easy as we make it look like on EVTV.
Is the glass half-full, or half-empty? Well, to an engineer, it’s obviously the wrong size glass to begin with. We probably shouldn’t be using glass at all for this application. And in fact, there a number of more appropriate to the task fluids we could be working with as well. Water, as the universal solvent, is basically the enemy – to be shielded and protected from in all applications. So like all engineers, I may know the answer, but I’m sorry, what was the question again?
Now a little empathy here. Whether you BELIEVE and agree with the above scenario or not, pretend for a few minutes you are me. And we are about to inherit 75,000-100,000 used Chevrolet Volts at very low values here in the U.S. alone, and we are simultaneously about to inherit 75000-100000 Nissan Leaf’s here in the U.S. at VERY low values. And the dealers for both those companies are disinclined to WANT to support or repair them, and at the same time pathologically ill EQUIPPED to repair or support them.
We DID recently describe a guy who purchased a USED Toyota Camry hybrid. He had a check engine light on the dash. That’s all he wanted taken care of. The dealer presented him an estimate for OVER $4500 for a brand new hybrid battery for the car. He declined the offer. Went home. Took apart the battery pack, and cleaned every terminal with vinegar, neutralizing the acid with baking soda. Totally successful permanent repair. Check engine light gone. Did he have a PHd in “electric car”. He has just mastered vinegar wash.
And the position of the automakers, publicly described in gorey detail in legally entered officially printed and promulgated public comment, is that information regarding the repair of these modern vehicles is part of THEIR intellectual property RIGHTS and no one should be allowed to repair their own modern car in the interests of public safety because we don’t know what we’re doing. And we don’t know what we are doing because they won’t give us the information on how to repair it. Or even how it works.
What the SHIT am I supposed to do with THAT? Obviously, all auto manufacturers are EXCELLENT candidates for purchasing NEW cars as described by my father. And I would note that in almost every case, their Senior executives have INDEED been seen driving around in brand new cars PROOF POSITIVE that Dad was RIGHT ALL ALONG.
In this episode, the EVTV hack team, stoically and quietly continue an eggregiously dull boring chore of dismembering and reverse engineering the machinations of the Tesla PowerTrain CAN bus. We’ve had to engineer our own hardware tools, our own software tools, and begin gathering huge data sets that have to be pored over line by line, byte by byte, and bit by bit. All to figure out how to make useful some perfectly good drive trains from wrecked Tesla Model S vehicles. And the horrible irony is that Tesla could GIVE us this information in CAN.dbf files they already have, at ZERO cost, and at ZERO risk of anything – ANYTHING. Any time they chose to. And they’ve already publicly proclaimed their entire car OPEN SOURCE. But they won’t do it. And Chevrolet won’t do it. And Nissan won’t do it. ANd Daimler won’t do it.
And none of them even can present a cogent single sentence of WHY they won’t do it. They magically allude to “liability” as the catchall reason to not do anything in our society today, with no concept of what they are saying. They are not sufficiently sentient to comprehend the irony in the words coming out of their grim greedy little mouths. They USE the dark concepts of magical “hackers” and “public safety” to excuse their positions. But they don’t have any line of thought as to what those positions ARE in the first place.
The HEAD of Daimler’s electric program in the U.S. sincerely believed there was NOTHING wrong with giving me this data for a Smart ForTwo electric. He instantly agreed to do it. Only in arrears, was he informed later by people BELOW him in the organization that this was a huge no-no and had to publicly retract his promise to do so. And I talked to him about it. He really doesn’t YET know WHY. He only knows that it is PROPRIETARY.
We have SINCE purchased a battery from them at a MUCH reduced and more reasonable cost of around $8000 than their original $30,000 estimate. But they found something wrong with the plug that connects it. And so they agreed to INSTALL the battery. But not enter the 10 digit serial number in a simple OBDII handheld device to activate it until we “repaired” it and then ported iT BACK to St. Louis to have this act of software performed.
I, and Mark Weisheimer, and Byron Inzbenhaard, each examined the connector in question. As between us we have more direct experience with and knowledge of electric vehicles than the ENTIRE DAIMLER ORGANIZATION in the United States, including ALL their Dealers TOGETHER, it is all the more perplexing in that we couldnt’ find a SINGLE THING wrong with the connector. It appeared 100% undamaged and operational in all respects. But some ass clown in the Creve Cour dealership had proclaimed it unsafe to turn on. It’s probably missing some sort of plastic shield that we don’t even know about nor need EVER.
So I had ONE 110 mile trip to trailor it up there. One 110 mile trip to trailer it back. And I only face TWO MORE, all because they can’t give me a 10 digit code to enter into a computer.
To do what? To protect what? With no cognizance of it, the net effect is to REDUCE THE VALUE OF THEIR VEHICLES. To make them LESS desirable. And to do irreparable harm to their brand. Regarding a car I am otherwise moved to admire, what is MY opinion of Daimler Smart electric cars? And what is yours? Clearly we are NOT in the minority. They haven’t EVEN approached the abysmal success rate of Nissan Leaf and Chevrolet Volt in the marketplace.
So it should be the death of EVTV as well. For the foreseeable future, it will be MUCH less expensive to purchase a perfectly operational modern electric vehicle, manufactured and produced to professional standards, than to do your own conversion. I guess we should wrap up this episode, and start a video series on how to make your own whiskey at home….
There are a few clues in this episode however. Americans, and indeed car enthusiasts worldwide, have a love of automobiles and indeed customizing automobiles that runs very very deep. In this episode, we see a fully restored and electric late 1950’s Mercedes Benz SL190 coming to life with one of our ultra smooth and compact UQM Powerphase 100 drive trains. Stand that up next to an electric SmartForTwo and see which turns the heads. The work is done by a family owned business of DECADES dedicated solely to providing metal stampings for the renovation of classic Mercedes Benz automobiles. DECADES.
We show a rework of a 1958 Chevrolet Apache pickup truck in electric drive in work in Toronto. The Steamwhistle Brewery delivery truck.
And beyond the restoration of classic cars, I’m going to coin a new term – “heirloom vehicle”. That is, a classic vehicle that is passed on generation to generation in families as a treasured family heirloom. How about a 1960 Studebaker Champ pickup truck. And does this one look GREAT with over 100 CA180FI cells in it and again a UQM Powerphase 100 smoothly spinning the wheels.
I have wincingly noted, quite along the way, that while I would love to share your proclamations of final victory on the transition from internal combustion engine to magnetic drive, it just isn’t that easy. The challenges are in social acculturation and economics, not in technology. And we are still very much in the tinkerer and innovator stage.
Picking up just where in the evolution of a technology it DOES move into the early adopter phase is kind of tricky. But without knowing anything more about the actual curve, we are forced to the classic definition which indicates the BEGINNING of the early adopter stage NORMALLY occurs at about 2.5% market penetration. At 15 million vehicles in the U.S. alone, that implies annual sales of 375,000 electric vehicles. We have yet to even approach that. This year, perhaps 60,000 sales total for battery electric plug-in vehicles.
And there is nothing smooth in the tinkerer innovator phase of the curve. It is full of starts and stops. Promises of riches and the despair of bankruptcy. Dreams both dreamed and dashed sometimes in a single season. Geoffrey Moore’s CHASM is POST early adopter. We are not yet TO early adopter. Elon Musk is a well funded tinkerer and innovator. We hope he can lead us to early adopter. But nothing is assured.
In this episode I repeat my call to arms of May, 2009. And I repeat it with full congnizance of what I was asking then, and now. I didn’t stutter. It wasn’t an accident. I’m not the slightest confused. I saw it in ALL its gorey implications then and what it would take in time and treasure from me personally and you as a group. I can only reiterate for those with an ear to hear. It is terribly terribly important to the future that this battle be won. I will NOT describe for you the alternative. It is a horror beyond description.
And while it would indeed be fantastic for the enemies of this struggle to lay down and surrender as their first official act, and for us to declare victory at every successful first drive, I do fear to report it is not the way of the world. I can offer only tears, blood, sweat and struggle. And I can assure you of total anonymity in victory. Your personal dedication to this battle WILL be forgotten if you succeed. And if you sit on the couch and fail to act, the outcome will NOT be won.
Obama can’t do it. Hillerairy can’t do it. General Motors can’t do it. The State of California can’t vote it in. We can’t all vote ourselves energy millionaires. VW and LGCHEM are not going to save us. There is no magic button. No silver bullet. Elon can’t do it alone. The utility companies are NOT your friend and ally. Every fair wind you have celebrated thus far has been ephemeral. Every following sea treacherous. Every break in the clouds a trap.
But we are not without hope. There has been change of many minds along the way. There are many more of us now. And we inherit a huge treasure of engineering talent, parts, techniques, and advanced technology in the crumbling wreckage and debris of this setback. It is precisely the re-enforcement of ammunition we needed at the perfect moment of our need. We will sift through the rubble grubbing out the treasures and the artifacts. We will retool them and repolish them and resuse them. We will use it up. We will wear it out. We will make it do. Or we will do without. I promise you another 40 miles of piss, blood, razor blades and broken glass and the opportunity to crawl through them all on your hands and knees retching and vomiting the entire way. At which point it will be declared an overnight success story and of course entirely inevitable the whole time. And GM will no doubt have invented it. But only with the help of the government. Or the telephone company. I get confused as to which.
Let’s go over this again. I happen to know there are 100,000 Jack Rickard’s out there. I need them to go into the garage, and sweep out a space about the size of a car….
…And unlike Obama, …… I already know how this comes out…..
I’m aging. And I’m heavy. My knees buckle a littler earlier in the evening. I’m not as young and pretty as maybe I once was. And if I appear short and grouchy with the opportunists, the me-toos, the wannabees, the fakirs and the poseurs, it’s because I never did like em much before, and I don’t like em now at all. I suffer fools even more poorly than I did at a younger and more cheerful age.
But for those among the 100K, you have my time, my treasure, and my life. Spend it well.