Welcome back to closing bell and cheddar news, Christine
schuler here with the one and only ken buffa.
Hey, let's take a deep dive ken as so
buckle up because today we are going to break down
the state of the electric vehicle industry and some of
the roadblocks they're getting in the way of E.
V adoption in the US. Internal combustion vehicles still
rule the roads, but rising gas prices, climate
change and exciting tv innovations are starting to shift americans
consciousness over to electric vehicles. Unfortunately, it looks
like the change in perception among americans may be happening
faster than the widespread adoption of E. V.
S. And it could take many years, even
decades for the dream of an electric future to come
to fruition. While every registrations have doubled over the
past year, battery powered cars still only make up
just over 5% of the total vehicle registrations in the
US and there are a number of factors at play
. So the first and probably most important being at
the price to buy an electric vehicle is rising rapidly
. Raw materials for E. V. S are
also spiking as supply chain issues made worse by the
Russian invasion of Ukraine continues and a global semiconductor shortage
weighing heavily here because these high tech cars need microchips
simply to function not to mention the lack of charging
stations across the U. S. Which can make
planning long drives difficult and sometimes nearly impossible. So
I think the other factor can obviously it's just the
sticker price. We know there are a lot of
incentives to buy these electric vehicles, but because it
has a higher sticker price, it also still means
probably when you're paying for insurance, your insurance on
an electric vehicle is going to be Price year even
with the incentives than what you would pay on a
gas-powered car. And obviously when there's a point in
our lives where everything every penny matters, maybe perhaps
going with an old gas-powered car is the best option
for now. But you can upgrade in the next
few years when inflation hopefully gets close to 2%.
It'll happen one day. I promise. Alright,
so let's break down some, break down some of
this. So starting with raw materials, several essential
metals are needed to make electric vehicles and their batteries
were talking elements like nickel, lithium and cobalt,
all of which have more than doubled in price over
the past two years with some like lithium more four
times the price Compared to 2020. Now the pandemic
is still a factor as well, especially for Tesla
, Which relies heavily on the Shanghai Gigafactory, which
holds a production for weeks during strict lockdowns in the
Chinese economic capital. Now that factory accounted for more
than half of Tesla's total vehicle deliveries in 2021 but
sputtered a bit in the early months of 2022.
So it's it's harder to get raw materials and as
supply fails to catch up to demand, it's more
expensive to make E. V. S which means
it's definitely more expensive to buy them. Take a
look at a comparison between electric vehicle and gas powered
prices, you can see the average price of electric
vehicle in May was around 54 grand according to J
. D. Power, a 22% increase from May
of last year. The average price of a gas
powered car is hovering around 44,000 bucks, A 40%
jump from the same time last year. Now,
that price, that point aside, there's no doubt
that driving electric vehicles is cheaper than gas powered cars
, considering owners don't have to spend hundreds at the
pump every week or two now and that can save
drivers thousands of dollars over the course of the vehicle's
lifetime. So take a look at the difference in
the cost per mile Between the two types of cars
. It's not even close the cause for E.
V. S has remained basically flat over the past
18 months while combustion vehicles have spiked along with gas
prices. So the savings Kristin, if we're digging
for them usually comes at the pump when it comes
to these vehicles. I think it's a really good
point and I think it's sort of this interesting position
right now because the case for an E. V
. Has honestly never been stronger in the history of
America yet. Obviously with some of the supply chain
challenges and the higher price of commodities that go into
making these vehicles and it's still clearly hard to come
by one that is affordable, right? It's still
a major, major durable goods purchase for any consumer
out there. Absolutely not. With the anxiety of
like gas anxiety, what are you going to pay
when you get to the pump versus range anxiety,
drivers who are looking to make a purchase, have
no, have no haven to go to, they're
gonna deal with either one. Um, well we
have seen a big electric shift in the auto industry
of late with major automakers like Ford GM and Honda
planning all or mostly electric fleets in the next decade
. But right now, the talk of the town
is still Tesla which has the Lion's share of US
electric vehicles, Tesla County for a whopping 61% of
total E. V. Registrations in the U.
S. And april The last month for which data
was actually available, there's no one even close to
that number rounding out the top four include Ford with
8% Honda and Kia, both with just about 6%
of total e. V registrations. Tesla seen more
as a tech company though and its cars are seen
as unique and out of the ordinary, which does
help drive up its brand. Its dominance is likely
to grow in the coming years and we told you
E. V. S only make up about 5%
of total U. S. Vehicles but their share
is accelerating rapidly at 28% by 2028 59% by 2035
. That's according to consulting firm alixpartners but take a
look at the places with the highest rates of E
. V. Adoption. No surprise California leading the
way, especially san Francisco Oakland and san Jose region
, all in northern California Uh which is 20.2% of
all vehicles being electric in that area. Pretty impressive
. Los Angeles and san Diego have about 12% while
places like new york city are lagging with just 4%
. You don't see a ton of E. V
. S on the road here but like we said
price is definitely a factor and the speed with which
american consumers adopt electric vehicles does depend heavily on what
happens with inflation and gas prices in the coming months
and years. So this will be an interesting one
to see. Even though new york city is tiny
, I can compare to what's been going on for
years in California due to E. V. Adoption
, I'm still seeing more and more electric vehicles on
the road over time here in Manhattan. Yeah,
absolutely. And I think that when it comes to
infrastructure that's gonna be a big play also being able
to not only find a charging station but perhaps make
one addition to your house, it's gonna be a
big thing. So I agree. I mean we
live in new york. So we obviously see more
electric vehicles. But I think in those kind of
states where charging stations aren't 100 miles away from each
other, you're in better shape. And I think
consumers will notice that too, we'll be watching closely --> .