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The clock is running out on the federal EV tax credit in the US, raising fears that the EV sales momentum will stop in its tracks. That remains to be seen. Ford and General Motors are among the US automakers digging in for the long haul, and the electric truck field shows signs of long-term life as well. The outlier, as usual, is Tesla. Piling on to other factors that have sent the company’s EV sales on a downward trajectory in the US and other key markets, the name of CEO and co-founder Elon Musk has surfaced — again — in the Jeffrey Epstein scandal.
EV Sales And The Ick Factor
Tesla sales were in decline long before the Epstein scandal erupted into public view, as consumers reacted to the starring role of Musk in right wing power politics here in the US and in Europe. The ick factor didn’t surface until this past August, when a photo of Musk and Jeffrey Epstein surfaced at the latter’s home in Manhattan.
Still, it’s difficult to gauge whether or not Musk’s connection to Epstein could make any difference in the downward spiral in Tesla’s EV sales. One photo does not indicate a relationship of any particular kind, especially given Epstein’s habit of collecting photographs pairing himself with any number of well known personages.
The latest development also does not suggest anything other than a passing get-together that may or may not have actually happened more than 10 years ago, in 2014. “Jeffrey Epstein planned to host Elon Musk at his private island in the Caribbean, have lunch with tech billionaire Peter Thiel and have breakfast with Trump ally Steve Bannon, according to newly released documents,” Forbes reported on September 26, joining a chorus of news organizations spreading the news.
“The documents released Friday by the House Oversight and Government Reform Committee include a copy of Epstein’s itinerary that included Musk’s tentative trip to Epstein’s private island in the U.S. Virgin Islands on Dec. 6, 2014, with an annotation that reads ‘is this still happening?’” Forbes continued. “Other entries show plans for breakfast with Bannon on Feb. 16, 2019 and lunch with Thiel on Nov. 27, 2017.”
Tesla’s EV Sales Keep Going Down, And Downer
As fleeting as it is, the newly revealed connection between Musk and Epstein is now part of the public record, and that doesn’t do Tesla any favors. The company’s brand reputation crisis has been compounded by something that auto industry analysts have been anticipating since the early 2000’s, namely, competition from other EV makers.
If Musk finally decides to do something, anything, to turn the situation around, he is already a day late and a dollar short, the Cybertruck debacle being just one example of the company’s failure to meet the moment.
“Looking at total vehicle sales numbers for the first half of the year, Tesla’s results are down a whopping 19.4% compared to the first half of 2023 — from about 337,000 to about 272,000. (That’s also with lower average selling prices and lower profit margins due to price cuts and bigger consumer incentives.),” CleanTechnica editor Zachary Shahan noted on September 8.
“They are down 10.8% compared to the first half of last year. The fact is that short-term sales drops have turned into medium-term sales drops — Tesla sales have been dropping quite consistently for the past two and a half years if you look at year-over-year trends,” he added.
And Now, All The Good News About EV Sales
The outlook for EV sales is much brighter for US automakers headed up by CEOs with names that most of America can’t cite off the top of their heads. In August, General Motors, headed up by CEO and Chairman of the Board Mary Barra, outlined plans to introduce a more affordable EV in the near future, supported in part by new LFP (lithium-iron-phosphate) battery technology. Slate Auto CEO Chris Barman also held an open house to show off the company’s forthcoming EV factory in August.
That same month, Ford — helmed by President and CEO Jim Farley — launched a long-term, affordable EV sales plan of its own leveraging LFP technology and a new manufacturing system. Last week, the automaker’s F-150 Lightning electric pickup truck was also featured in a new distributed power plant project, in which a Maryland utility paid EV owners to discharge their batteries into the grid during peak summertime demand hours. The pilot project provided each owner with up to $1,000 in incentives over three months. Programs like this will help offset the tax credit loss if they go to the scaleup level.
Cox Automotive’s Director of Industry Insights, Stephanie Valdez Streaty, drew an optimistic picture of the future in an article posted on September 23. Regardless of any short-term blip or slowdown in momentum, “the long-term trajectory favors full electrification,” Streaty wrote.
“Falling cell costs, the rise of new battery technology and chemistry, and a domestic battery supply chain supported by the 45X credit (the Advanced Manufacturing Production Credit created under the Inflation Reduction Act of 2022) all point in that direction,” Streaty added, citing a recent Morning Consult survey showing that 65% of EV Intenders will hold on to their intention, even after the tax credit expires on September 30.
The Power Of The EV Intenders
Resolving a couple of unresolved bottlenecks will also help move EV Intenders into the ownership phase. One of those bottlenecks is access to reliable information about battery life, particularly in regards to the used EV market. Streaty is among those advocating for the auto industry to support “State of Health” (SoH) reporting as a solution, similar to the transparency odometers provide for conventional cars. “As it becomes as routine as an odometer reading, battery health measures will ease buyer anxiety, stabilize pricing, and unlock the used EV market at scale,” Streaty explained.
Access to public charging stations continues to be a sticking point. That is beginning to unstick partly due to the interest of the QSR (quick service restaurant) industry and other rapid-service food retailers, which have recognized that a public EV charging station can give them a competitive edge in a crowded market. To cite just a few examples, Cracker Barrel, Denny’s, Waffle House, and BoJangles all launched or expanded their public EV charging plans this year, while Royal Farms, Circle K, Love’s, and Applegreen have folded EV charging stations into their food-plus-gas business.
The multifamily residential market is another EV sales roadblock to unblock. Ford CEO Jim Farley has cited 19 million as the number of people in the US who are willing to give EVs a look-see, but Ford also commissioned a survey showing that 90% of prospective EV buyers turn away if they can’t charge at home.
Americans being good at innovating, that has given rise to the new Charging-as-a-Service industry, which frees property owners from the expense and hassle of installing EV chargers for tenant use.
Another trend to keep an eye on is the C-PACE (Commercial Property Assessed Clean Energy) financing platform, which eases the upfront cost of installing EV charging stations and other cleantech. If you have any thoughts about that, drop a note in the comment thread.
Photo: Cybertruck via CleanTechnica archive.
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