Electric Vehicle Demand

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It is clear that governments around the world are seriously committed to the electrification of motor vehicles.  What is less certain, is the extent of consumer acceptance of electric vehicles (EVs). Currently, EVs account for a small single digit percentage of world-wide light vehicle sales.  While most EV manufacturers are able to sell all they … Continued

“If You Build It, He Will Come”

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According to Wikiquote, this was ranked as #39 of the 100 most memorable American movie quotations of all time.  In the film, Field of Dreams, an Iowa corn farmer builds a baseball diamond, and storied deceased baseball players emerge from the cornfields to play ball. This concept works well for the movie, but may prove … Continued

Beware of Government Subsidies

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Investors would be well advised to be cautious when evaluating investment opportunities based on government efforts to artificially, and often temporarily, affect consumer behavior. Consider the causes and implications of falling electric vehicles (EV) sales in China, the world’s largest market, accounting for approximately 60% of global output last year. China has been reducing subsidies … Continued

Less Convenient, More Expensive

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How about that for an advertising slogan as the world’s automobile manufacturer’s roll out a broad range of electric vehicles (EV)? Potential EV buyers have to face two clear issues. Battery charging time and charging station availability are problems that owners of gasoline powered vehicles do not have to deal with. It is generally accepted … Continued

Electric Vehicles (EV) are Coming; Ready or Not

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The global auto industry is scrambling to meet carbon-emission mandates and, currently, EVs appear to be the solution of choice.  Unfortunately, advances in battery technology and cost are not cooperating.  Cutting the cost of batteries is probably the industry’s most urgent challenge.  Batteries are estimated to account for 35%-45% of EV total costs.  Unless EV … Continued

Subsidies or Surcharges?

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In order to accelerate demand for electric vehicles (EVs), the world’s governments have been handing out a wide range of subsidies and incentives.  But in nearly half of U.S. states, driving a battery-powered car now requires paying an additional fee. To date, 24 states have imposed special fees on EVs, usually through higher registration charges, … Continued

Subsidy Risk

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Dependence on subsidies entails significant, and potentially existential, risk factors.  A case can be made in favor of subsidizing new technology, for limited periods, in order to mitigate early, low volume related costs, as potential participants seek to reach critical mass.  However, subsidies are generally of limited duration, as the long term costs are not … Continued

To Subsidize or Not To Subsidize, That is the Question

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German Chancellor Angela Merkel recently said that subsidies designed to help Germans buy electric vehicles cannot go on forever. California will hold hearings on offering a $4,500 subsidy for each electric vehicle sold in the state, up from the current $2,500, even as customers from Tesla and GM face losing the loss of bigger federal … Continued

He Said, She Said

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On June 5, 2017, Bloomberg News reported that, “China plans to halt issuing permits to produce electric vehicles because of concern that additional approvals may lead to a glut in the world’s biggest auto market, according to people with knowledge of the matter.” On June 19, 2017, Bloomberg News reported that, “Tesla, Inc. is close … Continued

The Outlook for Electric Vehicles

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With the recent introduction of the Chevrolet Bolt EV (electric vehicle), some clarification as to consumer acceptance of EVs may emerge. U.S. sales of EVs have been statistically insignificant, with full year unit volume likely to come in below 150,000 compared to total 2016 U.S. vehicle sale of approximately 18 million units.  Based on reported … Continued