for more on this. We're speaking with Stacey Novelette
E. V. Expert and vice president of transportation
electrification. Thanks so much for joining us. Can
you break down exactly what's going on here? Why
are these prices so high? And is there any
relief in sight for consumers? Thank you Asia.
Great to talk with you. You kind of have
a perfect storm for better or for worse. Even
before the pandemic, the interest in electric vehicles was
rising significantly with new models coming online. A lot
of attention being paid to the savings. When you
look at the total cost of ownership, we've got
not only the consumer market but also the fleet market
really interested in electric vehicles. Um, and you
know, the pandemic hits, people have a lot
more time to do their research and um, really
understanding what the options are. And so the increase
in interest in electric vehicles combined with chip shortage and
raw materials, just having um, you know,
a harder time moving around ultimately as we're seeing with
the supply chain more broadly. And so what that's
creating is, is ultimately, uh, you know
, a significant problem with the supply of electric vehicles
while everyone wants them. Um, and so,
you know, to draw down on already a limited
supply with this great interest is just making it harder
for consumers to find the vehicles they want to get
them in a time frame. That makes sense,
whether it's for, you know, a driver like
myself or a fleet that really needs to replace vehicles
on a regular basis. And so it's kind of
all coming together. Um, but we, we
are seeing, you know, a lot more product
offerings being announced by automakers and ramping up in production
capacity overall. So hopefully this is a short term
problem in the end. Okay, it sounds like
that would be very hopeful. This is something that
even Tesla's co founder had warned about before. The
geopolitical tensions that we've seen in Russia and Ukraine also
impacting supply chains globally. Um, but I want
to ask you, obviously a lot of these automakers
are passing on the increased cost of these materials to
consumers by hiking the cost of these cars. You
mentioned this being potentially short term. When do you
think we could see this ease? Because the increases
are astronomical. I mean 144%, that adds about
, I think it's somewhere around the price tag of
like$8500, if I'm correct. So it's a
really incremental um, and noticeable increase even for those
who are willing to pay for these vehicles. Yeah
, it's certainly significant. And, and you know
, we see those who have put in orders many
of these vehicles are not necessarily available to drive off
the lot. And so consumers are, you know
, placing orders ahead of time and then hearing from
the manufacturers that there's an increase along the way,
which certainly isn't, you know, a great thing
from, from a customer service and customer satisfaction perspective
. So I certainly understand the frustration from the consumers
, but I think that most drivers understand, you
know, they're willing to wait and even with,
with some increase the cost of ownership for an electric
vehicle compared to a gasoline vehicle, internal combustion engine
vehicle, you know, the upfront cost maybe maybe
more significant, but you're saving a lot over the
life of the vehicle. Buy fuel, um,
by, you know, zero to little to no
maintenance costs. And so that does pencil out for
most consumers when they take a look at it,
if they have the ability to, like you said
, to pay that upfront cost, which isn't the
case overall. And so we're seeing more attention on
the pre owned market and how to make make vehicles
more, you know, just accessible to the greater
public. Yeah, absolutely. As someone coming to
from southern California, I joke about this all the
time, but I'm serious when I say going to
the gas pump is heart wrenching situation at this point
. You just don't even want to look at the
final receipt. Uh, so I definitely think people
are willing to pay these prices. But I'm also
just curious something that comes to mind is the fact
that so many of these electric vehicles are on waitlist
for months at a time. So our customer is
going to be able to secure a price, you
know, say early on in case there are other
pressures on the supply chain or on these raw materials
? How do you think these automakers are going to
tackle that? Is it going to be kind of
like the stock market and we're going to see fluctuations
in prices in real time. Yeah, it's an
interesting issue and something that, you know, automakers
really haven't grappled with in the past to this extent
, I think each is probably approaching it in a
slightly different way. You know, I have colleagues
and friends who have been on wait lists are willing
to to stay on those wait lists for really,
as long as it takes. You know, they're
committed to to get in that vehicle eventually on the
same hand, same same, you know, breath
. We have other people who are kind of waiting
it out to see what happens to see how prices
shake out. But also just the availability of different
vehicles. You know, we're seeing, um,
different models being announced that may fit a person's lifestyle
better than, than what is available today. Um
, so, you know, I think everyone individually
needs to make a decision for themselves. And I
think automakers are trying to be as transparent as possible
with the folks that have, um, pre owned
pre order. Excuse me. The vehicles to say
, look, here's where we're at here is where
you're at in the, the timeline as well as
, you know, any cost increase. You know
, there's been some pushback from customers that have kind
of locked in prices or at least have, you
know, the illusion that they're locking in prices and
that changes so each automaker does need to deal with
, you know, their their customers individually. But
again the value proposition for for an E. V
. Owner overall is is really quite attractive. Yeah
. And I'm glad that you mentioned that each automaker
and the way that they communicate with their customer base
is very different. And even just the interest I
think in each of these specific vehicles and designs.
So I'm wondering what are you seeing in terms of
that push back from customers? Are you seeing that
people are leaving these wait lists or for going?
Um This process because of the increase in costs.
Are people holding on because to your point it's easier
to pay this cost up front in the long run
than to pay these gas prices right now. Yeah
. It's a great question. I actually haven't kind
of reevaluated since gas prices hit the$5 mark.
But I would I would imagine that that um customers
are more likely to to stay on those wait lists
and wait it out. You know, recognizing that
we may be in this high gas price situation for
a while but whether that comes down or hang steady
um It's still a good good move in the in
the long run to pencil out with these vehicles not
to mention, you know, if for the resale
value of electric vehicles are whole is holding pretty steady
. Um So I think, you know, again
, for the long play, most, most customers
are hanging in, you know, we did see
a situation when, when Rivian announced to their,
you know, sort of pre order customers that they
were increasing the price and then kind of walk that
back again. You know, it's it's going to
be a very individual decision for the automaker based on
their customers, you know, based on how they
marketed it. Um any, you know, caveats
that they've kind of put out there um in advance
, but as long as they're being, I think
transparent with customers, you know, certainly there,
they'll appreciate having having a heads up if they need
to make a decision and having enough time to make
that decision whether they pull out or or stick with
it. Yeah, Stacy. I could talk with
you all day about this to be honest, but
I think I have about a minute left, I
just want to ask one more question. How do
you think this changes the future when it comes to
mainstream adoption of electric vehicles and also just clean energy
and sustainability generally. Yeah, I'm very optimistic.
You know, we I c f my company did
a report through our Climate center recently that showed,
you know, to reach the net zero goals that
the United States has um, electric vehicles are a
very promising part of that solution, but not the
only one. The power sector needs to increase renewables
too to ultimately fuel those vehicles in the end.
But there are policies in place that are getting us
there. This great attention from the consumer and fleet
market to electric vehicles is really exciting and it's not
waning in many ways. It's, it's increasing throughout
all of these challenges. Um, and so,
you know, there's a lot of really great activity
happening not only on the vehicle side, but also
on the charging infrastructure side partnerships. Again, policy
, the funding that's coming from the federal government as
well as private industry, the leadership that we're seeing
from state and local governments, it's all continuing to
push this market forward and I'm certainly optimistic that will
continue to see the record electric vehicle sales that we
have in the last year or so at this point
. Well, really appreciate your perspective. Thanks so
much for joining us that Stacy. No black Tv
expert and Vice president of transportation electrification.