Steve LeVine’s article shows that neither he nor Sandy Munro understand the auto industry, let alone General Motors.
They are also a bit fuzzy on the timeline for the transition from internal combustion engines (ICE)to electric vehicles (EVs), especially EVs that use lithium batteries, the most common type of EV power source today.
While it’s no longer the world’s biggest automaker and its global footprint has been reduced, GM is still a major force in the United States. It has pared down what was a truly bloated line of largely badge-engineered models and eliminated brands that dated back to the 19th Century but still has the largest network of dealers and service centers of any car company in the U.S., which is an important consideration for many vehicle buyers because there are going to be folks driving ICE-powered vehicles for a long time.
Munro thinks the ICE-age will be over by 2028. I am pretty sure that vehicles powered by gasoline or diesel fuel will still be on the road in 2058. The reasons are simple:.
First: The least-expensive EV offered this year is the Mini-Cooper SE, which starts at $30,750 and has a range of 110 miles. The base version of the Chevrolet Spark is $14,395 and has a range of 297 miles. The Spark is being discontinued as GM exits the passenger car segment, but the Mitsubishi Mirage is $14,999 and has an EPA-estimated range of 322 miles.
Until a truly affordable EV comes on the market, there is going to be a need for the less-expensive ICE vehicles.
Not only that, but consider this: In 2019, new vehicle deliveries totaled about 17.1 million. Used vehicle sales totaled more than 40 million. Battery-powered EVs don’t hold their value as potential buyers are concerned about the cost of replacing battery packs. Turn of the flow of new ICE vehicles and used gasoline and diesel-powered vehicles are likely to become a hot item simply because they cost so much less. The average age of vehicles on American roads is already right around 12 years: look for that figure to go even higher.
In addition, lithium batteries have serious limitations in climate conditions that are commonly found in the U.S. Not only do cold temperatures degrade battery performance, they also hurt the ability of the battery to take a fresh charge. Batteries have to use a portion of their charge to keep the batteries warm, especially in sub-zero temperatures.
Solid-state batteries aren’t as sensitive but at the moment, they are prohibitively expensive for use in mass-market vehicles. Fuel cells also offer better all-weather performance, but they are hampered by cost and (more importantly) lack of fueling infrastructure.
Then there’s the issue of buyer preferences. Through the first three quarters of 2020, crossovers and SUVs claimed almost half of all vehicle deliveries. Pickups captured another 20 percent. Out of more than 280 vehicle models offered to buyers, the top 20 combined to account for more than 40% of total sales. Out of that top 20, more than 80% of the deliveries were pickups and utilities.
Who is in better shape to produce EVs to meet the form factor demanded by buyers? How about the company that sells more of them than just about anyone else?
Second: Lack of a comprehensive range of commercial vehicles. We’ve got EV pickups coming but as it stands at the moment, there is about a $10,000 price differential between the Tesla Cyber Truck and a Chevy Silverado with an eight-foot bed. With the Rivian pickup carrying an estimated sticker price of $69,000, a fleet buyer could have two Chevrolets.
At the other end of the range, we have the big rigs from Tesla and (maybe) Nikola. An electric over-the-road tractor is coming from Volvo next year but it has only a 150-mile range, not nearly enough to make it practical for anything other than local less-than-truckload service.
But there is a wide range of commercial vehicles between pickups and the big rigs. Vans, as well as chassis for box vans, stake beds, and other vocational applications are offered by some European manufacturers, such as Daimler and Volvo, but GM, along with Ford and Ram, offer a range of sizes. The Ram lineup starts with the 1500 and continues through the 2500, 3500, 4500, and 5500. Ford offers an F-450 pickup with a GVW that barely misses a requirement for a commercial drivers license.
Speaking of GVWs (gross van weights), commercial vehicles pay road use taxes based on their weight. The additional weight of lithium-ion battery packs could mean a significant additional expense for fleet operators.
Third: Charging infrastructure. I have a feeling that Mr. LeVine and Mr. Munro live in cities where charging stations will be relatively common. How about in Bowbells, North Dakota, the county seat of Burke County? There are a couple of gas stations in Bowbells, but the only charging stations are at a farmer’s co-op that isn’t open on weekends and the United Methodist Church. The closest Tesla Chargepoint is 68 miles away in Minot. Bowbells is a tiny farming community with a population of about 350 but how many of them have vehicles and how many of those vehicles are trucks? And what’s going to happen when it’s below zero outside?
And there’s the matter of the national electric grid. California governor Gavin Newsom’s faith in PG&E displays an optimism that would make Pollyanna jealous. I have seen assurances from various experts that the national grid could carry the load of millions of EVs but all of the predictions I have seen rely far too heavily on the notion that the vast majority of charging would be slow charging done overnight during low demand periods. What happens when millions of cars and trucks use Tesla Superchargers during the day? How much is it going to cost to prevent it?
Oh, and we might want to beef up security provisions at important nodes in the grid. You can get gasoline and diesel fuel to critical vehicles (fire trucks, ambulances, etc.) during a blackout but recharging depleted EVs is going to be a bit more challenging.
Fourth: The lack of choices. Because of our unwillingness to maintain a nationwide passenger railroad system, our long-distance travel options are limited to airlines, buses, and personal vehicles.
The newest Japanese bullet train, the Japan Railway Class E956, will enter regular service next year. Known as the ALFA-X, the ten-car train, which is all-electric, could make the run from Boston to Washington, DC in less than three hours, including a 30-minute stop in New York City. Los Angeles to San Francisco? Less than two hours. Germany’s Inter-City Express (ICE) would take less than an hour longer than the AFLA-X to get from Boston to Washington with the same stop in NYC.
One of the original ideas behind the Smart City Car was to have small fleets of them at railway stations in Germany. Business travelers would take one of the excellent DB (Deutsche Bundesbahn) trains from their home town to a business destination; rent one of the tiny Smart cars to take care of their transportation in the city; return it to the station and head home, all in the same day. One person, one car, and one briefcase.
Many years ago, my family lived in Southwestern Connecticut. My Dad worked in New York City, a little over 50 miles away. Every weekday morning, my Dad would drive about five miles to the New Haven Railroad station; park his car; and take the train into NYC. Every evening, it was the reverse.
This was 30 years before the development of the Smart car but it was the ideal application for it. The top speed limit in our town was 40 mph and it was enthusiastically enforced.
There was an electric version of the Smart car that had a range of about 58 miles. As a member of the motoring press, I had a chance to drive one for a little while. It wasn’t a thrill to drive but it would get you from Point A to Point B fairly competently. Dad, who was a road test driver in the days when they actually went out on the public roads, would have hated it but he would have been able to charge it overnight once during the week and once on the weekend and take care of his daily commute and most weekend errands.
Drive an electric car to catch an electric train. How many hundreds of thousands, if not millions, of people in large urban areas could remove millions of tons of carbon emissions every year?
General Motors could make small city cars, no problem. General Motors could make electric trains, too. GM used to be one of the largest producers of locomotives in the world and diesel locomotives should more properly be called diesel-electrics because the diesel engine is used to power the generator or alternator that supplies power to the electric motors that actually turn the wheels.
GM doesn’t have to “win” the Electric Age to be successful or profitable. GM has the skill sets to compete and it is competing. But General Motors also has the skills and capacity to play in the ICE Age as long at it exists, which is likely to be far longer than Mr. LeVine and Mr. Munro believe.