…Status of Battery-Powered Vehicles…
The fourth quarter saw a surge in battery electric vehicle (BEV) sales, primarily as the result of Tesla’s efforts to produce its Model 3.
As a result, 4Q BEV sales increased, month over month, by 204%, and year over year by 131%.
Even so, total BEV sales were only 1.4% of total light vehicle sales in 2018.
Plug-in electric vehicle (PHEV) sales were 33% ahead of last year’s sales.
Total PHEV and BEV sales represented 2.09% of all light vehicle sales in 2018.
Accurate sales data for hybrid electric vehicles (HEVs) was not available, so HEV sales have been omitted from this report.
It appears as though HEVs have lost their luster as it has become clear that HEVs have only a minimal effect on reducing CO2 emissions, especially as internal combustion engines have become more efficient.
A few other items are of interest.
- The average selling price of Tesla’s Model 3 was considerably higher than the advertised price of $35,000, reaching as high a $60,000. This would indicate the Model 3 remains a car for the rich and famous, and first adopters.
- Tesla has cut its vehicle prices by $2,000. Whether this is to help offset the loss of the $7,500 tax credit as the number of vehicles sold exceeds 250,000, or whether it’s to help sustain volume and the appearance of a momentum stock is unclear.
- Tesla is cutting its workforce.
Here are quotes from Musk’s email to employees:
“Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.
“As a result of the above, we, unfortunately, have no choice but to reduce full-time employee headcount by approximately 7%.”
World View
It would appear as though the market for BEVs is becoming bifurcated as European governments force the adoption of BEVs to conform with its program for cutting CO2 emissions, while the US market remains relatively close to a free market where consumers have a choice.
While BEV sales have grown and a wave of new BEV models will be hitting the market during the next few years, it remains unclear whether BEVs will supplant internal combustion engine (ICE) vehicles in the near future without government intervention.
Note:
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- Fuel cell vehicles use a fuel cell pack to generate electricity rather than using batteries. (These vehicles are experimental and are not included in the above data.)
- BEVs are vehicles powered entirely by battery power.
- PHEVs use the battery to travel the first 35 miles, then switch to an internal combustion engine to extend its range.
- HEVs are essentially battery-assisted vehicles that use the internal combustion engine to power the car. Batteries don’t provide the motive power for the vehicle.
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