The EV market just CRASHED. Here’s why it’s not coming back.
After a massive delay, I have made it to Tokyo for the Japan Mobility Show. And as a result, I’m up at a strange time. I woke up at 3:00 a.m. It is what it is. But I had to do something. I had to make a video before the big Japan Mobility Show where Toyota is starting things off in the morning. Let me show you the schedule and then we’ll get into the news today. Look how long Toyota’s press conference is. It is an hour and 15 minutes. The average press conference length is about 15 minutes. So, you look at Mitsubishi 15, Nissan 15. This is just how crazy the day is. David and I, uh, David from Automotive Press. We’re going to meet up once again at the Mobility Show, and we’re going to tackle these press conferences. Now, most of them are live streamed. The fun comes in when we’re able to get hands-on, sit in these cars, these concepts. Some of them are production models at this point. To sit in these cars and to give you guys our hands-on impression of what’s new, coming out of these Japanese automakers. All right. Anyways, yes, there’s BMW. I’m not wh why why cover them? It’s not going to be anything like a huge global reveal that I’m expecting. All right. So, Mitsubishi, not going to have anything fun to be honest because I haven’t heard anything about Delic. I haven’t heard anything about Monttero Pajarro. I’ve only heard off-road Outlander, which come on. Uh Nissan will have the new LG Grand and I should be able to get an interview with Ivan Espinosa, their CEO, uh today as well. So stay tuned for that. Honda, well I they have a new EV going to be revealed there. Um and there’s some other fun stuff like Honda’s going to be completely packed, but most of that stuff isn’t really relevant on the channel to be honest. Suzuki not relevant. Kawasaki, Yamaha, those are going to be on my motorcycle channel as well. Some Honda stuff. Mazda is going to have potentially a Mazda 6 or Mazda 3 successor uh or at least a concept. That’s all we know. Subaru is going to have two WRX, sorry, STI, two STI vehicles for us to sink our teeth into. That’s one of the most excited or the boost I’m most excited for. I can’t believe it honestly because Subaru’s been a snoozefest for so long. Um, but outside of Toyota, I think Subaru might be the one that’s going to really shake things up. Not going to cover Mercedes again. I mean, they were here two years ago at the Mobility Show. This is, as far as I know, Hyundai’s first time at the mobility show, not going to really cover them because I mean, what are they going to show that we don’t have in the US? And if they do show something that we don’t get in the US, we’re not going to get it in the US. You know what I mean? All right. Is Asuzu not worth covering, you know? Uh, Kia, I didn’t know Kia was actually going to be here. That’s interesting. BYD is going to have a little electric K car. And I’ll see you guys back on the channel later today. I will try to get up at least one video, maybe two videos of of the coverage we’re able to get here at the mobility show. So stay tuned for that. But here we are. EV sales plunge 43% or automotive news in October because there’s no more EV tax credit. We all saw this coming. We just didn’t know how bad the damage was going to be. In fact, if you compare September to October, it it was down more like 60% month uh from consecutive months. But if you compare this past October or what they’re expecting this October compared to last October, down 43%. And I’m like, you know, the sun hasn’t come up yet and land of the rising sun. My my window looks uh westward anyway. So, I’m not going to be able to see the sunrise. The land of the rising sun is also the land of no EVs. Yes, there’s things like the socket from Nissan and and uh Honda’s coming out with some EVs, but like the EV sales volume here is like less than 1% of the market in Japan. All right, in the United States, look at this. It’s at it’s going to be 5% of the market. And the government was telling you, whether it was the California government or the US government, everyone was saying, “Hey, EV is going to be 100% by like 2030, 2035, whatever their crazy estimations were.” Look, when you pull out the incentives, there’s nothing propping up the EV market. There’s very little real organic demand for it. And you might be saying, Kirk, you’re just you’re just a hater. I love EVs. I mean, I have a Silverado EV back at home that’s getting dropped off today. Um, I know time change. It’s technically yesterday. Like it just doesn’t make a whole lot of sense, okay, to push EVs right now when they lose a lot of money for these manufacturers. They cost a lot of money, too. And now you don’t have the government helping you sell them. Dead in the water. And look at the massive drop. 43% drop in October. Got to keep in mind all these manufacturers, almost all of them, almost all of them. Like Mazda, for example, has vested very little in EVs. All right? But most of these manufacturers from Ford, General Motors, they’ve invested billions upon billions of dollars in in a EV 100% EV reality by like 2035. I don’t know what they were thinking. They didn’t want to be, you know, left out. They have to appease shareholders, that sort of thing. And so they were making all these crazy claims. And here they are shutting plants down, backing out of their battery orders, and massively scaling down their EV production volume, at least what they thought it was going to be. The auto industry’s experienced a significant recalibration in the electric vehicle segment, said JD Powers Tyson Join. The recent EV market correction underscores a critical lesson. Consumers prefer having access to a range of powertrain options. That’s right. That’s all we want. All the want all the consumer wants is choice. If we’re just all forced to buy iPhones, well, here’s the thing. iPhones are pretty darn good. Even though I don’t want an iPhone, I know they’re good. All right, EVs can be good, too. But for the majority of people, they’re just too expensive. All right, not practical enough. Take too long to charge. Not enough charging stations. People can’t charge at their apartments. I could go on and on. Like, cold weather is a thing. I could keep going on with the issues why EVs are not the one size fit all. The EV market share hit 13% into September, all-time high, because this was your last chance to get that free $7,500 off of leasing an EV. Any EV could qualify for the EV tax credit if it was leased. It was a huge loophole. And as a result, we saw massive spike in EV sales in September. Not from Toyota or Subaru. They didn’t have their new EVs out yet. their next generation BZ or Sulttera, they weren’t on the market yet and the Lexus RZ wasn’t updated at that point. So, almost every manufacturer, even Tesla, saw gains in the month of September, but we’re seeing just this incredible drop off in October. And it’s going to continue for the next year for us to see negative growth for EVs. At least that’s my estimation. I could be wrong, but unless a a silver bullet comes out with double the range at the same cost of what we currently have, it’s there’s no way we’re going to get to 10% in the US anytime soon. Could happen over time, but in the next by 2030, if we get over 10% of the EV market by 2030, I will be fascinated. And because October is such a failure for EVs, JD Power is estimating a drop of 6% in retail deliveries um and a 7% fall in total sales. And all the slowdown in the car industry right now has come from the poor selling of EVs. Here’s the thing. If these EVs cost 15 to 20 grand like they do in China, we wouldn’t be see we would still be seeing strong EV uh adoption, okay? But they cost three, four, five, six times what they do in China where all the materials come from. All the battery parts essentially come from China. All the minerals, all the microchips, everything comes from China. And that’s why the vehicles in China are so dirt cheap. They’re able to still make well some of them are able to make a profit with very cheap electric cars over there. Meanwhile, over here, the same car will cost two, three times as much. Now, there were manufacturers actually trying to boost their EV sales despite no tax credit. Like, Hyundai was offering $7,500 cash incentive to make up for the lack of the $7,500 tax credit. And despite that, their sales for EVs took a huge hit. So, if people aren’t buying EVs, what are they buying? Well, go figure. They’re buying gas cars and hybrids. something that the consumer wants, something that the consumer is more easily able to afford, and something that the manufacturer can actually make a profit on. Carl Brower from IC Car says the stable percentage of new EV sales after everything settles down is no higher than 6%, likely four to 5% of the market. Automakers are not going to have any incentive to build them. So, they’ll only make them if they can earn at least a little profit. They’re saying Tesla is still profitable, but for how long? They’re always in the headlines for the worst thing. Well, mainly Musk. All right. He’s in he’s constantly under fire in the headlines and like he wants his tr trillion dollar payout. Does a consumer want to send money to a company so a guy can get his trillion dollar payout, right? That just it’s bonkers. No one wants to buy a Tesla anymore or very few people. They’re still good EVs from what I might from my understanding. The Model Y and the Model 3 made some big jumps with the refreshes, but no redesigns. There are no new models for Tesla other than the Cybert truck, and that’s $100,000. So, it’s like very, very little incentive to go buy a Tesla right now. You can go buy a used one for dirt cheap. That’s the best option right now in my opinion. They’re saying plug-in hybrids has actually fallen. You got to keep in mind, plug-in hybrids also benefit from the EV tax credit. All right, they’re down to 1% of the market share. Plug-in hybrids. That’s okay. Plug-in hybrids and beevs, they can both be in the market. The new RAV 4 plug-in hybrids, amazing. And once Toyota, here’s the thing. Toyota has so so big of a command of the market that once they start selling a higher volume of RAV 4 plug-in hybrids and people start buying them well at higher volumes and that they were allowed to previously due to a lack of production, it’s going to change the market. People will be more and more interested in plug-in hybrids. And this is the thing. It’s like, okay, you have this huge jump in change if you own a gas car to an EV. All right. Yes, maintenance is different and superior on an EV, but refueling the car is much more of a nannying task on an EV compared to a gas car. Takes more time, more planning, and some people like that, and that’s fine. And if you don’t ever need to extend, you know, go past the car’s daily range, that makes that makes EV an amazing choice for a lot of people. But if you have one car option, and a plug-in hybrid is an option, meaning you can charge at home, you get 50 mi of city range, which is going to take up, let’s say, all of your daily driving or maybe half of it, so you don’t hardly ever have to put in gas. All right, that could work for some people, too. But, you know, I see a reality where plug-in hybrids and EVs have an equal amount of market share in the next 5 years. I could be completely wrong on that. Completely wrong. Maybe that’s just from Toyota’s camp. Maybe we’ll see from Toyota an equal amount of BEVs being sold in the United States to the amount of plug-in hybrids they’re also selling. Plug-in hybrid just gives you more flexibility. You don’t have to think about charging on the go. You don’t have to worry about range anxiety because you’re still getting 40 m per gallon once you run out of EV range. Most of you guys understand that plug-in hybrids still have their issues. They’re heavier. They’re more expensive. In theory, there’s more things to go wrong, but Toyota plug-in hybrids have proven to be ind bulletproof. All right, so I’m not really worried about that. But cost is a hurdle with plug-in hybrids compared to the standard hybrid. So, where does the market go from here? It’s not up for EVs, not in America, not anytime soon. What is going to happen in the next few months? especially, we’re going to see continuation of 40, 50% drops for EV um year-over-year sales until we get to October of next year, then it’ll level out, okay, to that four, five, 6% of the total addressable market. Plug-in hybrids, now that the RAV 4 is going fully hybrid, plug-in hybrid, and they’re such a huge volume seller, it might move the needle like a small percentage point up. But until almost every model uh or at least until more mass market volume for plug-in hybrids becomes available, it’s just never going to come close to the EV uh model penetration out there. Or especially when you have someone like Tesla that sells a huge amount of EVs, even still, they don’t have a single gas car hybrid or plug-in hybrid. Like I said, there still could be a world when Hyundai starts bringing out these E-Ravs, their next generation plug-in hybrid, and Nissan starts bringing out plug-in hybrids. There could be a world where Pavs or E-Ravs, whatever you want to call them, all right, or whatever technology they’re using, how big the battery is, what the engine uh is doing, whether it’s a generator or actually tied into the wheels, what is what’s the market going to shift to? All right. If bees are capped to the population in the US six, seven% in the next five years, Pas will keep eating into that. But the big thing right now is what the market wants. And the market not necessarily wants plug-in hybrids. You know, that’s I think that’s a more of a inter intermission goal. I think we could still see long-term EVs when solstate batteries come out, when more affordable batteries come out in the next 20, 30, 40 years. Okay. But right now, what do we have? Well, we have a market that has cheap gas. It’s not super cheap. It’s not, you know, a buck buck something like it was in the 90s, but you know, I’m consistently seeing where I live, well under $3 a gallon. And when you have gas that cheap, just buy just drive a gas car. There’s nothing wrong with it’s easy, simple, predictable. People know what they’re getting into. Or a hybrid. No additional maintenance needed with a hybrid. in fact less maintenance because you hardly ever use your brakes um or the friction brakes I should say. There’s less belts and pulleys in a hybrid. It’s it’s more in it’s a it’s a simpler system long term in my opinion in terms of maintenance, but you don’t have zero uh charging issues or range anxiety and it doesn’t cost that much more. In fact, you’re at the point where you’re looking at hybrids from Toyota, Honda, eventually Nissan once they get their hybrids out, and uh Hyundai, too, because Hyundai has this huge economy of scale with their new hybrid system coming out with their two motor hybrid. And of this market where for the manufacturer, they’re able to sell these hybrids and make a profit on them for about the same money as a traditional gas car. um while giving you better throttle response, better fuel economy, and better NVH um a more smooth and quiet driving experience. The shortterm artificial reign of EVs and there are artificial share of the market is over. It’s done. You’re not going to see 10 15% of the market for EVs. Like I said, unless a miracle happens with solidstate battery technology, affordability, infrastructure, etc. Now is going to be the reign of hybrids. Look, the RAV 4 just went fully hybrid. Honda just got caught spy uh spied testing their new large platform hybrids on the Passport and the Pilot. Okay, Nissan’s bringing in their hybrids in 2026. All right, etc., etc., etc. All right, the Camry’s been full hybrid. You know, hybrid sales continue to grow. Hyundai will continue to push hybrids and their hybrid technology. I will be driving it in about a week and a half from now, early November. I’ll be driving the new Palisade hybrid and that’s going to showcase their new hybrid technology which is going to really really be an eye openener. Is it going to be better than Toyotas? Is it going to be more fun to drive? It’s going to be more efficient, more powerful. It might be almost all those things. All right, so time will tell. This is now the era of hybrids for the next 15, maybe longer, 15 years, maybe longer, maybe two, three decades. But I will shut it down there. I could talk forever on this topic, but it’s tough when I’m just talking to myself. If I had David here talking about this topic, it would be fun. Or just another co-host. It would be amazing to talk about what’s going on and where are we going. We know where we’re going. This is the era of hybrids. This is here. This is now. And for how long and for how much of the market they’ll be able to control in the coming years, that’s just going to depend on the consumer. But I’ll see you in the comments. Stay tuned for my coverage at the Japan Mobility Show this week, probably 10 10 videos. And I have a couple days after the Mobility Show, and I’m thinking about walking on over to some of these rental car companies and like there’s one that’s close that has Crown Sport, Toyota Crown Sedan, uh Lexus LBX. If I can rent those, I’m going to and then drive around Tokyo. Uh hopefully I don’t get caught in too much traffic, but that would be absolutely incredible to share driving um in Tokyo with some cool cars that we could only wish we could have in the United States. Have a great day, guys. I’ll catch you in the next one. Stay tuned. Make sure you subscribe. Hit the bell icon because I’ll be dropping videos like two, three times a day in the next week essentially. Have a great one and peace.
#EV #HYBRID #ICE #CARSALES #TOYOTA #HONDA #HYUNDAI #TESLA #byd
The EV market has plummeted after the EV tax credit was just ended. Here’s what it means going forward.
https://www.autonews.com/ev/an-ev-sales-plunge-in-october-jdpower-forecasts-1027/
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