Are We Really At The Beginning Of The End For Gas-Powered Cars?

JAN 29 2019 BY EVANNEX 68

IS THE DEATH OF THE INTERNAL COMBUSTION ENGINE AT HAND?

Could 2018 go down in history as the beginning of the end for fossil-powered vehicles? Several auto industry analysts quoted in a recent Financial Times article (via The Drive) think it’s a possibility. “We will probably see the peak of combustion engine car sales in 2018,” Felipe Munoz, an automotive analyst for Jato Dynamics, told FT, adding that his company’s “optimistic” forecast for the global auto market had changed in the last six months.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: EVs like the Tesla Model S are changing car buyers’ impressions of driving electric (Source: Motor 1)

After several years of record growth, auto sales in China, Europe, and the US are levelling off. “When you look at 2018 since the summer, new car sales in all of the important markets are going down,” Axel Schmidt, global automotive lead for Accenture, told FT. “Selling combustion engine cars to customers – this will not grow in the future.”

Selling electric cars to customers, however, is expected to grow. Moody’s forecasts that the market share of EVs will rise to 1.6 percent, offsetting the decline in ICE vehicle sales. Most of the growth in EV adoption, at least in the near term, will happen in China, where automakers are investing huge sums in electrification as the government is making it almost impossible for them to expand production of gas-burning cars.

Of course, US and European automakers have been producing EVs for years – and selling very few (except for a certain California company). Fossil fuel-burning cars won’t be going away if consumers continue to demand them. However, there’s good news on this front as well. Last May, a survey by AAA found that 20% of respondents said their next vehicle would be an EV, up from 15% in 2017, when AAA first posed the question.

Above: Plugging in Nissan’s Leaf (Source: Motor 1)

More recently, a survey conducted by the popular video series Fully Charged found existing EV owners to be overwhelmingly happy with their choice to go electric. Out of some 7,700 responses to the audience survey, 88 percent of plug-in car drivers said they would never go back to driving an ICE vehicle. (See Motor1 or Renewable Energy Magazine for more details about the Fully Charged survey results.)

As savvy observers of the scene know, most consumers won’t buy EVs to save money, or for their environmental benefits, but because they are better vehicles. “We’ve always maintained that, simply because they are better technologies, electric vehicles and renewables will become mainstream, and this is borne out by our survey,” said Fully Charged host Robert Llewellyn. “It’s the cars in particular that are starting to turn heads, and having driven all of them from the Tesla Model 3 to VW’s hotly-anticipated I.D., I can honestly say that there’s a really cool choice of electric cars for almost every budget.”

As any Tesla owner can attest, it’s the test drive that sells an electric car. “Having experienced how impressive electric cars are, we were not surprised to see so many other drivers saying that they won’t go back to the combustion engine, but it might shock those that have yet to switch,” said Llewellyn. “Perhaps more surprising was that the two-thirds of our audience who are yet to buy an EV intend to do so in the next couple of years.”

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Written by: Charles Morris

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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68 Comments on "Are We Really At The Beginning Of The End For Gas-Powered Cars?"

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With the recent news about EA offering free charging for Turdcan, I see the beginning of end of non Tesla EV. What EA showed is that even with billions in funding, standalone charging infrastructure can’t stand on its own without being propped up by free charging deals. This will limit how many EV can be served.

If non Tesla EV sales are low now, just wait until the tax credit and other incentives are gone. No one will pay $32K for Bolt, let alone $38K for base KonaEV.

taycan only produced 40.000 units per year, high price and few market

“only produced 40.000 units per year, high price and few market”

Precisely describe all non Tesla EVs without subsidy. There will probably be more people buying Porsche Turdcan than Kona or Bolt when subsides are gone due to Porsche name. Very few will pay $38K for compact hatch Hyundai.

“produced”? No production taycan has been produced yet.

EV sales are only low because they are production limited by a core component, batteries. As support ramps up sales have been rising with availability. There is no reason to think the 50% annual increase will change anytime soon.

When Bolts are sitting on dealer lots with sometimes $8000 off MSRP, the problem is not production limit but demand limit. Idea that “if you build it, they’ll buy it” is completely debunked with current low EV sales and wide availability. People aren’t going to pay BMW money for compact “dorky” hatch from Kia and Chevy after subsidy expiry, especially with free chargers clogging up the charging infrastructure.

This assumes the subsidy isn’t loaded into the price and captured by the manufacturer.

The subsidy in the US is a tax rebate that goes to the individual so not captured by the manufacturer.

The manufacturer knows you’re getting the rebate and jacks up the price.
So, that gives the rebate to them.

The used car market too takes this into account, and cuts $7500 off Plus depreciation on Volt used car price.

Not when they are trying to compete. OK, in the luxury market, sure, but not at the lower end where the Kona, Leaf, and others under $40k. There is just no room for such a markup.

Provide examples

Bolt.

So you have nothing to back up your claim.

Where Bolt? You have a link ??

“Turdcan” ??

Seriously, you want to conduct the conversation here at the level of a five-year-old?

Porsche isn’t giving free gasoline with their gassers, but giving free charging with Turdcan. That implies Turdcan is a turd, unable to compete without free fuel gimmick, just like other turds like fuel cell cars. You’d have no problem with calling Mirai a turd yet you think criticizing Porsche is level of 5 year old?

But then, you think people not whipped and worked to death in their jobs is promoting slavery, so I can see how your crazy mind can think that.

He was just being presidential.

Was 2018 really a turning point in the US ?
Tesla really created a buzz and some peoples who had regular car (20K or so) decided to pay more to have a model 3.

If model 3 was not there and let say that the other manufacters had enough EV to sell, do you think there would have been as many EV on the road in USA ?

“Was 2018 really a turning point in the US ?”

Maybe not for US but for California. Q3 and Q4 of 2018 we were over 10% of new car sales which is considered mainstream. It may take another 4-5 years but we will drag the US into the future.

Now the latest article I’ve seen says we may have a “glut” of EV’s sitting around un-purchased:

https://qz.com/1533976/automakers-may-overproduce-14-million-electric-cars-by-2030/

I love when the word “may” is used. Such an accurate word, “may,” shows a lot of commitment to an idea. Laughably enough to write an entire article, hoping to move the bar of EV failure yet again. What’s also pretty sad is the fact that inventory that sits around unpurchased, waiting for buyers, is the exact actual ICE model. Somehow, though, excess inventory for EV’s signifies failure.

I have been shockingly amazed by how there’s always a negative in the press for every piece of good EV news. It’s almost as if there’s an oil funding source for these articles. And a Truth-Lie Spread the shorts manipulate to make money.

In so much as the suckers believe the shorts, that proves that Markets are Inefficient, GROSSLY Inefficient.

Anyone making predictions about 2030 is basically just making a WAG (wild-assed-guess). It is just not possible to make accurate decisions that far out. To many black swans between now & then.

i think the entire automotive industry knows the ICE engine is on the way out. And as the article made clear, as more consumers become aware of what an EV actually is and then actually drive one, they are sold. The key is more options at various price points so consumers have a choice, and as more brands offer viable EVs, the more choice as well for consumers wanting to stick with their current brand. Because as the article states….EVs are just better.

Just understanding that owning an EV saves thousands in per mile costs and maintenance over an ICE vehicle every year…..year after year that adds up, with the savings expanding at the 3-5 year mark, when ICE models need more costly maintenance that EVs won’t.

Looking at charging, even though 95% of EV charging happens at home, consumers without home charging, and consumers still learning about EVs seem to need to know there are ‘fueling’ stations available, which is why the Supercharger network benefits Tesla greatly, and why the Electrify America rapid build out of chargers will benefit all other EV brands, including Tesla globally.

The benefits of the EV just keep stacking up against ICE.

Certainly there are some strong indications that the major auto makers are finally starting to shift to EVs. Volkswagen has made a strong commitment to making battery electric cars in the near future, and GM says it is making its entire Cadillac line into EVs… or maybe it was just “electrified” vehicles, which would include mild hybrids and be far less significant.

Some big cracks in the dam, but I don’t think the dam has yet burst. It certainly will within the next few years.

Cost is still way too high…Look no further than the Gov’t shutdown where many workers missed two straight paychecks and couldn’t pay any bills…

People who can’t plan their economy can still lease cars. 😉 I’ve seen plenty of people who makes loads of money but still live from paycheck to paycheck… there is always room for an extra golf club or a fancy dinner at an expensive restaurant.

Yes, it is still too high for the average person. But there is still a lot of growth at the high end of the market. And as they grow, costs will continue to be pushed down as batteries, EV electronics, etc. are still not at the mass market levels of traditional ICE parts. And there is still a lot of innovation to mined.

Once automakers can start selling EVs profitably, that will be the turning point. If you take away the Model 3, there was nothing particularly special about EVs in 2018.

The EV powertrain will be cheaper than the gas power chain in 2 years or less. Turning point.

I think it will take 5 years, but I hope you are right and I am wrong.

Both right. Depending on which manufacturer. Tesla sooner and some others maybe never. Battery advances the key.

I still say that EV powertrains with 250+ plus mile range will NEVER be cheaper than ICE cars but they will STILL win based on cheaper fueling, EV incentives, better experience, less maintenance, climate rules, etc.

Seriously? That will happen within a very few years for cars selling at $30,000 and over; it will take a few more years, or possibly several, before we get BEVs cheaper than gasmobiles in the $15k-20k range. But I fully expect to see that within a decade or less. Once auto makers start devoting major resources to building BEVs, prices will come down rapidly due to economy of scale.

OEMs are still trying to shove EVs down the lines for gasmobiles. They are different animals. GM finally gets it and makes BEV2 and BEV3 platforms exclusively for EVs. Other manufacturers are on the same track.

Once they let go of the gasmobile legacy designs, EVs will definitely be way less expensive to build.

Shoving batteries into the trunk is not the way to build an EV.

Technically the article title may be right for the wrong reason. We may have reached peak auto sales, so any increase in the EV percentage is also a loss for ICE sales. The most indicative statistic I have seen is that 10% of people who sold a car last year replaced it with….nothing. Some people have figured out that Uber, public transport and the occasional ZipCar are a beeper use of their money than a car that sits unused for 96% of the day.

I think the EV is going to replace the ICE car, but the real change will occur when the feature set of the two are more equivalent. AWD and a CUV form factor are two popular feature that no affordable EV has yet. You can get these in a Tesla or an iPace, but you can’t even lease a Model 3, so the outright purchase is a real commitment/burden. There is a reason why BMW has such a high lead rate. Most people really can’t afford to purchase one.

In addition to your contention of “right for the wrong reason”, my belief is that this is more a future buying indicator than a 2018 indicator. Like most anything in economies, car sales are cyclical. It will climb for a number of years until a recession, or some other factor, pulls them back. What we are seeing now is cracks in the economy that are starting to spill over into the auto market. By the time this pullback ends, and car sales start growing again, EVs will be more mainstream and will pick up the sales, whereas ICEs will not rebound, but rather wither away a few % each year until they are no longer mainstream. 2018 may be the beginning, but that’s because car sales in general have peaked, not (yet) because EVs are on the scene.

I believe it is a future buying indicator, but for a different reason.

People are trading Toyotas and Hondas in for Teslas. This is not expected as a Tesla is at least twice as expensive as the trade-in was originally. They are stretching their budgets. This means that they are keeping the old car running until they can afford to trade for an EV. So there is a dip in new car sales because of this phenomena.

Tesla’s backlog also shows that this is a real demand-side thing. People want EVs.

Surveys are also indicating a huge (20%) of all people want an EV for their next car. That’s 1/5th of the market!

The retail market behavior changed while nobody was looking. Buyers are lusting for EVs before the OEMs can ramp up. Not because they are less expensive (even though some TCO models show this), but because EVs are BETTER.

“There is a reason why BMW has such a high lead rate. Most people really can’t afford to purchase one.”

What’s a “lead rate”?

I’m guessing that he meant to write “lease rate”.

You are right….he is wrong about why BMW has a high lease rate….it’s not msrp but a combination of cheap leases, instantly using fed credit and ever improving ev tech. I have seen cases where it was cheaper to lease and buy at end of lease than directly buy.

You are right about capturing the tax credit through a lease deal. I’ll never have enough taxes due to take advantage of the credit, but a well structured lease with a fair purchase price at the end can roll up all those elements in one deal, making some of the new offerings very financially attractive. I’m surprised more manufacturers aren’t leading with the money math. Tree hugging is nice, but money in the wallet is more compelling. Kia and Hyundai could had the government picking up a third of the tab for their latest round of offerings. If they could resist trying to keep it all for themselves and share with the customer, it could be a win all the way around.

People who sell their car and replace it with nothing are waiting for more EV options to open up.

“Of course, US and European automakers have been producing EVs for years – and selling very few (except for a certain California company)”

The leaf was outselling Telsa in units by a wide margin. This is what happens when getting reporting from a biased source.

Nissan is not a European automaker, Renault is. Not Nissan. Just read a bit slower before you talk about “biased source”.

Andi is correct that Nissan is not a European nor US maker. But it’s also true that Leaf’s crowns are being removed one by one. The Leaf is already outsold, separately, by both the Model S and the Model 3 in the US. See the “Top 10 US Plug-in Cars (cumulative sales)” chart:

https://insideevs.com/us-plug-in-electric-car-sales-charted-december-2018/

The US is a good test market for worldwide sales. Leaf’s claims of worldwide popularity are numbered, considering that Model 3 sales have not yet benefited from:
1. International sales
2. Leasing
3. Remaining conversion of the Model 3 reservation list
4. The $35k base Model 3

I am an enthusiastic EV user but don’t see a takeover happening. The upfront costs are still too high for many users and long distance highway use is still cumbersome. I see EVs taking over at what they do best which is local travel and commutes. EV makers are really missing a potentially huge market by not making commercial vehicles for trades like: construction, electricians, plumbers, computer techs etc. The short trips they make every day are really bad for ICE engines as they don’t heat up enough to vaporize blow by in the oil or condensation in the exhaust system. I have a 320km round trip “boonie run” coming up and am dithering whether to use the Leaf or my old ICE. There are FLO L3 chargers available along the route but in these sub freezing temps am leaning towards the ICE as it will cut down on the road time and produce plenty of HEAT! For the time being long distance highway capable EVs are luxury status vehicles for those who can afford them. I do forsee the transition of 2 car households to one ICE and one EV with no one wanting to use the ICE unless… Read more »

I’ve done between 50 and 100 road trips of 1000+ miles since I’ve started driving and now I’ve done a few with my Model S and it is anything but cumbersome. The changing time is eaten up by the increases in speed limit over the years and having an electric in the mountains is amazing. The charging breaks are so nice, that if I ever have to use an ICE for a road trip again, I might make similar stops to make the trip more comfortable.

Exactly! Many times, there is zero delay due to charging because of the need to eat, or get rid of the last meal coincides with the car’s need to charge.

A 20 minute stop every 3 hrs is really healthy.

One simply has to experience this to realize that charging (90% of the time) is not a burden.

Of course road trips in the Model S are fine….that’s missing the point. The Model S is far out of reach of the average car buyer. The Model 3 is closer but still not there yet.

Every year now there are used Tesla’s coming on the market.

Blah blah, Tesla blah blah. They are cumbersome and limiting. Even if you don’t think so, ask the wife or kids. A PHEV like the Prius Prime is every bit as good as the 3 at half the cost and can go anywhere, anytime.

Evidence would suggest that this is the case.
En masse legacy makers are turning away from ICE, and embracing evs. At least that’s what most of them are now saying. The future is electric. Of course the future is fungible, and no one knows exactly how long it will be before the last gas mobile rolls off the line.
Somewhere between 2030-2035.

There will still be ICE’s available after 2035; they’ll just be in very low volume.

It is highly likely that climate change effects will be so crushing in the next decade that selling ICE’s will become illegal throughout the world by 2035 or earlier, including, slackard nations like the USA. Europe is already poised for this. To me, saying EVs are the future is saying the obviously obvious, except perhaps for hydrogen cells, fusion packs, entanglement teleportation, and whatever comes after that.

Horses will still be available after 2035, in very low volume too.

Here are two more sources of information that will convince you that it will happen faster than you previously imagined.

(watch at 2x speed)
https://youtu.be/duWFnukFJhQ

And seeking alpha article – taking cues from the above study

(lots of short pages, but not a long article)
https://seekingalpha.com/article/4225153-evs-oil-ice-impact-2023-beyond?page=1

Readers on this forum will enjoy the above studies/analyses

Anyone putting up a blog post (or so-called “article”) is literally trying to sell his position to you. Be very skeptical of what you read there.

EV adoption in the US will be much quicker in California, Oregon, Washington and Northeastern States. I can imagine in about 5 years, EV/Plug-in cars will be almost 50% in California, and almost 100% in a decade. Also as batteries get cheaper the economics favor conversion of fleet vehicles and buses to EV, not to mention semi trucks. We are a stone throw away from another recession and by then, no one will buy $50-$70K SUV’s and trucks. Time for Big Auto to wake up.

Big Auto takes a while to wake up. I remember the gas crisis of the ’70s. GM and Ford fast tracked the Vega and Pinto. Chrysler imported the Colt and others. It took them more than a decade to make a decent small car. I am sure they will all have nice EV’s by 2030. Maybe.

Speaking for the North East. EV electric heaters are GREAT. Full heat in less than a minute, where as on very cold days a gas engine can take 20 minutes to heat up.

For BMW,Volvo and Hyundai it’s likely they have already hit peak internal combustion with all growth being contained in their electric vehicles from here on in.

It is still VERY early for EVs. Basically EVs are at the point where they are very cool car for the expensive end of the market. We are at the cellphone point where it is not just Wall Street billionaires and CEOs with cellphones….but also doctors, lawyers, etc. However, we are not at a point where most people can buy an EV unless they are willing to accept a 100 mile vehicle or stretch their budget.

But it is getting closer & closer. I think we have passed a tipping point such that it will continue to grow and won’t be just a temporary blip like the EV-1 was.

Every high school student, struggling artist and single mother has a cell phone these days. Cell phones for lawyers and doctors happened 20 years ago. EVs for doctors and lawyers will be happening in the next two or three years.

Nobody wants the title “last guy to buy a new production ICE vehicle”. It will soon become the mark of the Luddite. There will only be two kinds of buyers, those with EVs and those driving used ICE vehicles, saving their money, waiting for the opportunity to get the right deal on a new or used EV.

Yes

“We will probably see the peak of combustion engine car sales in 2018”

That might turn out to be true… or it may be turn out to be a few years premature… in countries with increasing restrictions on emissions. But it won’t be true for third-world countries without such restrictions, or with only very weak ones.

The current dropoff in gasmobile sales has a lot more to do with a widespread (possibly global) economic downturn, than it has to do with the still very small (but rising) percentage of plug-in EV sales.

I think it’s pretty clear that the EV revolution has finally entered the classic “S-curve” of adoption of a new tech during a disruptive tech revolution. But currently that rise is still less than 1% per year, so it may be a few (and by “a few” I mean less than several) years before we actually reach peak gasmobile sales, even in first-world countries. Global peak gasmobile sales is probably several years off.

Well the US needs to support EV’s by requiring a certain percentage of sales by manufacturers be EV and increase the amount.
There’s a reason that China leads in the manufacturing of solar, wind, EV etc. There government supports science and invests heavily in STEM.

Pass a carbon tax to penalize emitting CO2 and support renewable energy and EV’s.

No. We have a couple more years when a legacy can make 200k ev on a couple of models