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If you’ve read about electric vehicles in the news lately, you know the vibes are bad. Over the past few weeks, the media has fixated on the idea that consumer demand for EVs is “slowing,” “chilling,” or “losing its charge.”
But are sales even slowing? Has federal policy failed to spark the EV transition? Is there any cause for panic? The data shows none of that is true.
The best (and only) quantitative evidence presented for the dominant media narrative is data from Cox Automotive, as presented in a recent Wall Street Journal article, showing that dealers are taking more time and resorting to bigger discounts to move EVs off their lots.That’s true, but does it really indicate that EV sales are “slowing”?
First, this data excludes the space’s biggest player by far — Tesla — as well as other EV-only makers like Rivian who don’t use dealer networks, so this is really a story about traditional automakers (Ford, GM, Volkswagen, etc). And with high interest rates making a new car more costly to finance or lease, dealer discounts are trending steadily upwards for all vehicles in recent months, not just electric models, according to the Cox data.
Second, if we take a look at actual sales data, there’s no sign the growth in EVs is flagging. In fact, sales of battery electric and plug-in hybrid vehicles in the third quarter of 2023 exhibited the strongest year-on-year growth since the fourth quarter of 2021.
Putting aside plug-in hybrids, which have shorter electric range and retain a gasoline engine, sales of purely electric vehicles have been steadily increasing at a roughly 60 percent annual growth rate for each of the last six quarters. That’s fast enough to double EV sales every 14 months!
Overall, year-to-date sales of electric and plug-in hybrid vehicles in the U.S. topped 1 million in September for the first time and are on pace to exceed 1.4 million by year’s end.It’s hard to square the actual data with the bad vibes.
The main story here is not of cooling consumer interest in EVs or a slow-down of the electric transition, but rather the confluence of two other major factors — Tesla’s defensive price war and rising interest rates — which have forced some incumbents to rethink their strategies.
For most of the last decade, Tesla has basically had the EV market to itself. As a result, they priced even their mass-market models, the Model 3 and Model Y, as if they were in competition with Audis and BMWs not Corollas or CRVs. Tesla’s long head start also gave them ample time to bring down manufacturing costs. High price points and falling production costs sent Tesla’s profit margin soaring to a peak of nearly 30% in March 2022, compared to the single digit margins more typical of a high-volume auto manufacturer.
Then, as soon as traditional automakers got serious about the EV business and new start-ups like Rivian and Lucid started scaling, Tesla aggressively slashed prices. The base Model 3 cost over $48,000 last year. Today, it costs around $38,000, a 20% drop. Prices for the Model Y have fallen by a similar magnitude.
Yes, price cuts have eaten into Tesla profitability, but they appear to be an effective defensive weapon that hit their rivals at exactly the same time the Fed was ratcheting up interest rates, substantially increasing the cost of financing or leasing any new vehicle.
In 2021 and 2022, as traditional automakers were launching new flagship EVs, it seemed like they could easily sell every EV they could produce at premium-prices, all while dealers charged big markups.
But just as the market was flooded with new electric offerings, high interest rates made buyers more cost conscious and Tesla’s price cuts took all the fat out of the market. The EV market of 2023 is cutthroat, and aggressive pricing is king.
These shifting market realities seem to have caught several legacy automakers off guard and forced a major refocus on reducing cost of production.
Indeed, if we dive into the data, it’s clear that the ominous headlines about the “slowing” EV market are more a story about Ford and GM in particular, than anything else.
Sales of Ford’s Mach-E have indeed flatlined this year, likely due to competition from Tesla’s now-discounted Model Y. Noting that reducing sticker price on electric vehicles would be their top priority, Ford CEO Jim Farley recently announced adjustments to F-150 Lightning and Mach-E production ramps and delayed some capital spending.
GM’s EV ambitions are stuck in neutral too, but their woes can hardly be attributed to a lack of customer interest. The company is struggling with serious difficulties assembling the Ultium batteries meant to power their next generation of electric SUVs and pickups. As a result, GM shipped only 2,316 of their Cadillac Lyriq crossover and 65 electric GMC Hummers in the first half of this year, a slower pace than 2022. Less than 200 of their Chevy Blazer and Silverado EVs found their way to American homes through September. Amidst these production troubles, GM pushed back the launch of the Chevy Equinox EV and full-scale production of their electric pickups by several months. Meanwhile, sales of the one EV they do have on the market, the affordable Chevy Bolt, are going gangbusters. Unfortunately, GM plans to stop producing the Bolt by year’s end as it focuses on modernizing the venerable model.
(Stellantis, the parent company of Chrysler, Jeep and Ram, has yet to launch any all-electric vehicles in the United States, though their plug-in hybrid Jeeps are selling strongly this year).
Still, contrary to recent headlines, none of the major automakers are scrapping plans for huge investments in electric vehicles. Fresh details on the recent deals struck between the UAW and the Big Three (GM, Ford, and Stellantis) show the automakers all continue to plan multi-billion-dollar investments in new EV factories and models.
“Our commitment to an all-EV future is as strong as ever,” GM CEO Mary Barra told analysts on a conference call last month. The company plans to be 100% electric by 2035.
Ford is “not moving away from our second generation [EV] products,” the company’s CFO also said in October.
Meanwhile, Hyundai Motor Group (parent to Hyundai, Kia, and Genesis brands) continues to launch new electric models and its executives told investors the company isn’t pausing EV plans as they “believe EV sales will grow longer term.” In fact, the Korean auto group vaulted ahead of GM and Ford to snag the #2 spot for total U.S. EV sales this year.
Volvo’s electric sales more than doubled over the past year to reach 13% of total sales for the brand, and the company reported a healthy 9% profit margin on its electric models.
Upstart Rivian is going strong too. Sales of its R1 series tripled over the last year, and the firm just increased its 2023 production estimates by 4 percent to 54,000 vehicles as it continues to move towards profitability with a focus on reducing costs and ramping up production.
The upshot of all this is that EVs are getting more affordable, which is the key to future growth. Prices are falling. Dealer markups are gone. And the price of an average EV in September was $50,683 (before tax credits), barely higher than the average for all new vehicles ($48,000).
In January, the personal EV tax credit will be available to buyers at the point of sale for the first time too, effectively turning it into a rebate. Already, intense competition is forcing dealers to pass the credit through as a down payment that cuts the monthly cost of leasing a $40,000 EV nearly in half.
Next year will also see the more affordable Volvo EX30 and Chevy Equinox EV hit the market, joining the Tesla Model 3, Hyundai Kona, and Kia Niro and Ioniq 6 in the under $40k segment.
In 2024, Tesla’s extensive Supercharger network will also open up to non-Teslas, virtually all automakers will adopt NACS chargers natively in model year 2025 vehicles and beyond, and the Bipartisan Infrastructure Law’s National Electric Vehicle Infrastructure grants will finally start to flow in earnest to build out chargers.
So while Ford and GM are facing real challenges, the overall state of the electric vehicle market is healthy.
As GM’s Barra said: “As we get further into the transformation to EV, it's a bit bumpy.” But that doesnt mean the journey is slowing. Sales of EVs keep growing rapidly, new models are expanding the market, and competition is making it all more affordable. Doesn’t that deserve some good vibes for a change?
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Give the people what they want — big, family-friendly EVs.
The star of this year’s Los Angeles Auto Show was the Hyundai Ioniq 9, a rounded-off colossus of an EV that puts Hyundai’s signature EV styling on a three-row SUV cavernous enough to carry seven.
I was reminded of two years ago, when Hyundai stole the L.A. show with a different EV: The reveal of Ioniq 6, its “streamliner” aerodynamic sedan that looked like nothing else on the market. By comparison, Ioniq 9 is a little more banal. It’s a crucial vehicle that will occupy the large end of Hyundai's excellent and growing lineup of electric cars, and one that may sell in impressive numbers to large families that want to go electric. Even with all the sleek touches, though, it’s not quite interesting. But it is big, and at this moment in electric vehicles, big is what’s in.
The L.A. show is one the major events on the yearly circuit of car shows, where the car companies traditionally reveal new models for the media and show off their whole lineups of vehicles for the public. Given that California is the EV capital of America, carmakers like to talk up their electric models here.
Hyundai’s brand partner, Kia, debuted a GT performance version of its EV9, adding more horsepower and flashy racing touches to a giant family SUV. Jeep reminded everyone of its upcoming forays into full-size and premium electric SUVs in the form of the Recon and the Wagoneer S. VW trumpeted the ID.Buzz, the long-promised electrified take on the classic VW Microbus that has finally gone on sale in America. The VW is the quirkiest of the lot, but it’s a design we’ve known about since 2017, when the concept version was revealed.
Boring isn’t the worst thing in the world. It can be a sign of a maturing industry. At auto shows of old, long before this current EV revolution, car companies would bring exotic, sci-fi concept cars to dial up the intrigue compared to the bread-and-butter, conservatively styled vehicles that actually made them gobs of money. During the early EV years, electrics were the shiny thing to show off at the car show. Now, something of the old dynamic has come to the electric sector.
Acura and Chrysler brought wild concepts to Los Angeles that were meant to signify the direction of their EVs to come. But most of the EVs in production looked far more familiar. Beyond the new hulking models from Hyundai and Kia, much of what’s on offer includes long-standing models, but in EV (Chevy Equinox and Blazer) or plug-in hybrid (Jeep Grand Cherokee and Wrangler) configurations. One of the most “interesting” EVs on the show floor was the Cybertruck, which sat quietly in a barely-staffed display of Tesla vehicles. (Elon Musk reveals his projects at separate Tesla events, a strategy more carmakers have begun to steal as a way to avoid sharing the spotlight at a car show.)
The other reason boring isn’t bad: It’s what the people want. The majority of drivers don’t buy an exotic, fun vehicle. They buy a handsome, spacious car they can afford. That last part, of course, is where the problem kicks in.
We don’t yet know the price of the Ioniq 9, but it’s likely to be in the neighborhood of Kia’s three-row electric, the EV9, which starts in the mid-$50,000s and can rise steeply from there. Stellantis’ forthcoming push into the EV market will start with not only pricey premium Jeep SUVs, but also some fun, though relatively expensive, vehicles like the heralded Ramcharger extended-range EV truck and the Dodge Charger Daytona, an attempt to apply machismo-oozing, alpha-male muscle-car marketing to an electric vehicle.
You can see the rationale. It costs a lot to build a battery big enough to power a big EV, so they’re going to be priced higher. Helpfully for the car brands, Americans have proven they will pay a premium for size and power. That’s not to say we’re entering an era of nothing but bloated EV battleships. Models such as the overpowered electric Dodge Charger and Kia EV9 GT will reveal the appetite for performance EVs. Smaller models like the revived Chevy Bolt and Kia’s EV3, already on sale overseas, are coming to America, tax credit or not.
The question for the legacy car companies is where to go from here. It takes years to bring a vehicle from idea to production, so the models on offer today were conceived in a time when big federal support for EVs was in place to buoy the industry through its transition. Now, though, the automakers have some clear uncertainty about what to say.
Chevy, having revealed new electrics like the Equinox EV elsewhere, did not hold a media conference at the L.A. show. Ford, which is having a hellacious time losing money on its EVs, used its time to talk up combustion vehicles including a new version of the palatial Expedition, one of the oversized gas-guzzlers that defined the first SUV craze of the 1990s.
If it’s true that the death of federal subsidies will send EV sales into a slump, we may see messaging from Detroit and elsewhere that feels decidedly retro, with very profitable combustion front-and-center and the all-electric future suddenly less of a talking point. Whatever happens at the federal level, EVs aren’t going away. But as they become a core part of the car business, they are going to get less exciting.
Current conditions: Parts of southwest France that were freezing last week are now experiencing record high temperatures • Forecasters are monitoring a storm system that could become Australia’s first named tropical cyclone of this season • The Colorado Rockies could get several feet of snow today and tomorrow.
This year’s Atlantic hurricane season caused an estimated $500 billion in damage and economic losses, according to AccuWeather. “For perspective, this would equate to nearly 2% of the nation’s gross domestic product,” said AccuWeather Chief Meteorologist Jon Porter. The figure accounts for long-term economic impacts including job losses, medical costs, drops in tourism, and recovery expenses. “The combination of extremely warm water temperatures, a shift toward a La Niña pattern and favorable conditions for development created the perfect storm for what AccuWeather experts called ‘a supercharged hurricane season,’” said AccuWeather lead hurricane expert Alex DaSilva. “This was an exceptionally powerful and destructive year for hurricanes in America, despite an unusual and historic lull during the climatological peak of the season.”
AccuWeather
This year’s hurricane season produced 18 named storms and 11 hurricanes. Five hurricanes made landfall, two of which were major storms. According to NOAA, an “average” season produces 14 named storms, seven hurricanes, and three major hurricanes. The season comes to an end on November 30.
California Gov. Gavin Newsom announced yesterday that if President-elect Donald Trump scraps the $7,500 EV tax credit, California will consider reviving its Clean Vehicle Rebate Program. The CVRP ran from 2010 to 2023 and helped fund nearly 600,000 EV purchases by offering rebates that started at $5,000 and increased to $7,500. But the program as it is now would exclude Tesla’s vehicles, because it is aimed at encouraging market competition, and Tesla already has a large share of the California market. Tesla CEO Elon Musk, who has cozied up to Trump, called California’s potential exclusion of Tesla “insane,” though he has said he’s okay with Trump nixing the federal subsidies. Newsom would need to go through the State Legislature to revive the program.
President-elect Donald Trump said yesterday he would impose steep new tariffs on all goods imported from China, Canada, and Mexico on day one of his presidency in a bid to stop “drugs” and “illegal aliens” from entering the United States. Specifically, Trump threatened Canada and Mexico each with a 25% tariff, and China with a 10% hike on existing levies. Such moves against three key U.S. trade partners would have major ramifications across many sectors, including the auto industry. Many car companies import vehicles and parts from plants in Mexico. The Canadian government responded with a statement reminding everyone that “Canada is essential to U.S. domestic energy supply, and last year 60% of U.S. crude oil imports originated in Canada.” Tariffs would be paid by U.S. companies buying the imported goods, and those costs would likely trickle down to consumers.
Amazon workers across the world plan to begin striking and protesting on Black Friday “to demand justice, fairness, and accountability” from the online retail giant. The protests are organized by the UNI Global Union’s Make Amazon Pay Campaign, which calls for better working conditions for employees and a commitment to “real environmental sustainability.” Workers in more than 20 countries including the U.S. are expected to join the protests, which will continue through Cyber Monday. Amazon’s carbon emissions last year totalled 68.8 million metric tons. That’s about 3% below 2022 levels, but more than 30% above 2019 levels.
Researchers from MIT have developed an AI tool called the “Earth Intelligence Engine” that can simulate realistic satellite images to show people what an area would look like if flooded by extreme weather. “Visualizing the potential impacts of a hurricane on people’s homes before it hits can help residents prepare and decide whether to evacuate,” wrote Jennifer Chu at MIT News. The team found that AI alone tended to “hallucinate,” generating images of flooding in areas that aren’t actually susceptible to a deluge. But when combined with a science-backed flood model, the tool became more accurate. “One of the biggest challenges is encouraging people to evacuate when they are at risk,” said MIT’s Björn Lütjens, who led the research. “Maybe this could be another visualization to help increase that readiness.” The tool is still in development and is available online. Here is an image it generated of flooding in Texas:
Maxar Open Data Program via Gupta et al., CVPR Workshop Proceedings. Lütjens et al., IEEE TGRS
A new installation at the Centre Pompidou in Paris lets visitors listen to the sounds of endangered and extinct animals – along with the voice of the artist behind the piece, the one and only Björk.
How Hurricane Helene is still putting the Southeast at risk.
Less than two months after Hurricane Helene cut a historically devastating course up into the southeastern U.S. from Florida’s Big Bend, drenching a wide swath of states with 20 trillion gallons of rainfall in just five days, experts are warning of another potential threat. The National Interagency Fire Center’s forecast of fire-risk conditions for the coming months has the footprint of Helene highlighted in red, with the heightened concern stretching into the new year.
While the flip from intense precipitation to wildfire warnings might seem strange, experts say it speaks to the weather whiplash we’re now seeing regularly. “What we expect from climate change is this layering of weather extremes creating really dangerous situations,” Robert Scheller, a professor of forestry and environmental resources at North Carolina State University, explained to me.
Scheuller said North Carolina had been experiencing drought conditions early in the year, followed by intense rain leading up to Helene’s landfall. Then it went dry again — according to the U.S. Drought Monitor, much of the state was back to some level of drought condition as of mid-November. The NIFC forecast report says the same is true for much of the region, including Florida, despite its having been hit by Hurricane Milton soon after Helene.
That dryness is a particular concern due to the amount of debris left in Helene’s wake — another major risk factor for fire. The storm’s winds, which reached more than 100 miles per hour in some areas, wreaked havoc on millions of acres of forested land. In North Carolina alone, the state’s Forest Service estimates over 820,000 acres of timberland were damaged.
“When you have a catastrophic storm like [Helene], all of the stuff that was standing upright — your trees — they might be snapped off or blown over,” fire ecologist David Godwin told me. “All of a sudden, that material is now on the forest floor, and so you have a really tremendous rearrangement of the fuels and the vegetation within ecosystems that can change the dynamics of how fire behaves in those sites.”
Godwin is the director of the Southern Fire Exchange for the University of Florida, a program that connects wildland firefighters, prescribed burners, and natural resources managers across the Southeast with fire science and tools. He says the Southeast sees frequent, unplanned fires, but that active ecosystem management helps keep the fires that do spark from becoming conflagrations. But an increase like this in fallen or dead vegetation — what Godwin refers to as fire “fuel” — can take this risk to the next level, particularly as it dries out.
Godwin offered an example from another storm, 2018’s Hurricane Michael, which rapidly intensified before making landfall in Northern Florida and continuing inland, similar to Hurricane Helene. In its aftermath, there was a 10-fold increase in the amount of fuel on the ground, with 72 million tons of timber damaged in Florida. Three years later, the Bertha Swamp Road Fire filled the storm’s Florida footprint with flames, which consumed more than 30,000 acres filled with dried out forest fuel. One Florida official called the wildfire the “ghost” of Michael, nodding to the overlap of the impacted areas and speaking to the environmental threat the storm posed even years later.
Not only does this fuel increase the risk of fire, it changes the character of the fires that do ignite, Godwin said. Given ample ground fuel, flame lengths can grow longer, allowing them to burn higher into the canopy. That’s why people setting prescribed fires will take steps like raking leaf piles, which helps keep the fire intensity low.
These fires can also produce more smoke, Godwin said, which can mix with the mountainous fog in the region to deadly effect. According to the NIFC, mountainous areas incurred the most damage from Helene, not only due to downed vegetation, but also because of “washed out roads and trails” and “slope destabilization” from the winds and rain. If there is a fire in these areas, all these factors will also make it more challenging for firefighters to address it, the report adds.
In addition to the natural debris fire experts worry about, Helene caused extensive damage to the built environment, wrecking homes, businesses, and other infrastructure. Try imagining four-and-a-half football fields stacked 10 feet tall with debris — that’s what officials have removed so far just in Asheville, North Carolina. In Florida’s Treasure Island, there were piles 50 feet high of assorted scrap materials. Officials have warned that some common household items, such as the lithium-ion batteries used in e-bikes and electric vehicles, can be particularly flammable after exposure to floodwaters. They are also advising against burning debris as a means of managing it due to all the compounding risks.
Larry Pierson, deputy chief of the Swannanoa Fire Department in North Carolina, told Blueridge Public Radio that his department’s work has “grown exponentially since the storm.” While cooler, wetter winter weather could offer some relief, Scheuller said the area will likely see heightened fire behavior for years after the storm, particularly if the swings between particularly wet and particularly dry periods continue.
Part of the challenge moving forward, then, is to find ways to mitigate risk on this now-hazardous terrain. For homeowners, that might mean exercising caution when dealing with debris and considering wildfire risk as part of rebuilding plans, particularly in more wooded areas. On a larger forest management scale, this means prioritizing safe debris collection and finding ways to continue the practice of prescribed burns, which are utilized more in the Southeast than in any other U.S. region. Without focused mitigation efforts, Godwin told me the area’s overall fire outlook would be much different.
“We would have a really big wildfire issue,” he said, “perhaps even bigger than what we might see in parts of the West.”