The Plunge Begins?

Guest Post by Eric Peters

You have probably seen Titanic, the movie about the sinking of the White Star liner starring Leonardo DiCaprio. When the ship first strikes the iceberg, few onboard appreciate what it means. Some of the passengers played with the chunks of ice that shaved off the berg as it gave the ship what amounted to a Godfather kiss.

Even when the ship began to sit noticeably lower in the water, it took some time for the panic to set in. That happened just before the ship began its plunge to the bottom, three miles down.

It may be just about that time for the Great Ship EV, too.

It has been listing for some time already, though few have noticed the signs. Perhaps because so many of them have not wanted to see them – especially those who have been assuring everyone that, in effect, the Great Ship EV is unsinkable.

But then came winter, which has done to the Great Ship EV what the iceberg did to the Titanic.

Whatever people may have read about the Great Ship EV, they found out what actually happens to the Great Ship EV when it’s cold outside. They have also learned the truth about such things as how far the Great Ship actually goes vs how far they’ve been told it would go. The 20-40 percent difference between the two having the same effect upon their confidence in the Great Ship as the sight of the water level outside Titanic rising higher than the porthole glass inside the purser’s room had on Jack – Leo’s character – who was manacled to a steel post in the purser’s room.

Time to get out.

About half of GM’s Buick and Cadillac dealerships already have. They chose the buyouts offered by GM rather than go down with the Great Ship. They knew that spending – not “investing” – several hundred thousand dollars each to buy equipment and alter their facilities to be able to service EVs they would never sell enough of to get their money back made as much sense as Leo’s character waiting passively in the doomed ship’s purser’s office.

Several thousand Ford dealers publicly begged for rescue. Stop sending us EVs we can’t sell – because people don’t want to buy them. We’re drowning, they said. Ford obliged by cutting back production of the Lightning by two-thirds. Maybe this will keep Ford from taking on more water. The company just reported losses (so far) of $4.7 billion.

And now, perhaps, it is time for the final plunge.

Hertz, the rental car giant, just announced the other day that it will not buy 65,000 EVs from Volvo’s Polestar EV division, which has just coincidentally just gone out of business, like the Titanic when it commenced its final plunge. Hertz also cut loose some 20,000 EVs it had bought from Tesla, about which it has had second thoughts, probably as a result of rental car customers having had second thoughts. When you’re in a hurry to catch your flight, there’s nothing quite like trying to find the time to recharge your rental EV in time to make your flight. Or find yourself running out of charge in an unfamiliar city when you’re in a hurry to get to an important meeting.

And Hertz, for its part, has found out essentially what Mr. Andrews from Titanic found out when he went down into the bowels of the ship to assess the damage done by the iceberg. Rental EVs cost a fortune to repair and also to insure, for precisely that reason. These devices also depreciate catastrophically in value, due to the fact that their battery packs age much faster than an engine or transmission. You can put 100,000 miles on either of the latter and they’ll still usually have another 100,000 miles of life left. But a battery that’s been discharged and recharged over a the course of 100,000 miles may only have 70 percent (or less) of its original charge capacity left  – and not much life left.

Abandon ship! Save yourselves!

Hertz just shot off the flares. It will not be “fully electrified” by 2024 – as it had said it would be back in 2020. It is already much less “electrified.” Hertz may have closed the water tight doors just in time.

And it is this that heralds the imminence of the plunge. Fleet sales of EVs have constituted a major portion of EV sales, making it appear that EVs were selling in higher numbers – to individual buyers – than they actually were. Fleet buyers are like bilge pumps in a ship; they take away the excess that would otherwise accumulate. Historically, automakers would use fleet sales to buttress the sales figures of models that weren’t selling well, to the general public. The vehicles that weren’t selling were usually what are referred to within the business as loss leaders, or compliance cars – by which was meant cars made to satisfy government regulations that didn’t sell well but that, once manufactured, had to be gotten rid of somehow.

Many of these ended up in rental fleets.

But now the rental fleets don’t want these loss leaders and compliance cars because unlike a Chevy Malibu, they don’t even work as rentals.

And it’s not just these fleets that are likely to do what they must to avoid going down with the Great Ship EV. Government fleets of EVs are incurring losses that even government will not be able to sustain. Electric postal vehicles and electric police vehicles are going to end up just where the Titanic did – and that will be the end of the Great Ship EV.

Cue Celine Dion warbling.

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