Banning gas cars?

[Like2Plan]

Makes me wonder about the day used EV's are easily had for <$10k. Will the batteries need replaced? Will the batteries still be manufactured, or supported by the mfr? Or will a "cheap EV" actually be a misnomer if a sub-$10k buyer has to lease or rent a replacement battery.

I was just thinking about that. My car turns 16 this August. (Still haven't reached 100k on the mileage). When I shopping for my current car, the battery replacement cycle on the Prius was something I was just not sure about. The batteries (at that time) were wicked expensive.

"One of the drawbacks of a hybrid battery is its limited life span. Most hybrid batteries have an eight-year or 100,000-mile warranty, according to Bumblebee Batteries, but some fail before that time."

https://www.caranddriver.com/research/a32768969/hybrid-battery/

So, according to that if I had gone with the hybrid I would be looking at replacing batteries twice (so far in my ownership).

When I was doing the original analysis, I figured gas would have had to have been about 8 dollars a gallon in order to break even over 8 years of ownership with the difference in cost between the fancy Prius and the cheaper Pontiac Vibe. At the time, though, the Prius was in such demand that you had to order it and wait for it so it made it a little easier decision.

[disneysteve]

"One of the drawbacks of a hybrid battery is its limited life span. Most hybrid batteries have an eight-year or 100,000-mile warranty, according to Bumblebee Batteries, but some fail before that time."
https://www.caranddriver.com/researc...ybrid-battery/

I wonder what battery failure looks like. Is it like my cell phone where it just doesn't hold a charge as long as it used to? Do you get some sort of warning that the battery is nearing the end of its life? I'd hate to be traveling somewhere and have my battery give out. I mean, that happens with regular car batteries but those are easily and inexpensively replaced pretty quickly unless you're out in the middle of nowhere when it happens.

[Singuy]

I wonder what battery failure looks like. Is it like my cell phone where it just doesn't hold a charge as long as it used to? Do you get some sort of warning that the battery is nearing the end of its life? I'd hate to be traveling somewhere and have my battery give out. I mean, that happens with regular car batteries but those are easily and inexpensively replaced pretty quickly unless you're out in the middle of nowhere when it happens.

There's a difference between battery failure and battery degradation. Battery failure usually happens early from a new car purchase. Cars usually cut power to limp mode scenarios. Battery degradation is a slow process in which when the battery can hold <60% charge of the original rated miles will be deemed as end of life, however it doesn't mean you can't drive the car anymore. The car will constantly give you a fairly accurate assessment of how much life is left in the battery with the estimated miles of range, so it's not something that happens overnight.

Lithium ion batteries in a car is very different than those in cell phones. With the right cooling management set up and adding secret sauce from whichever manufacture, the life of the battery will usually last longer than the shell of the car. Batteries now are rated between 300-500k miles(from Tesla). The biggest unknown will be battery degradation from other car manufactures. Nissan botched their battery management system and their cars degrade extremely fast, hence the poor resale value. Other companies like Ford and VW are too early too tell.

My Tesla using 2018 battery technology have lost 2.8% of battery life after 2.7 years/36k miles. I am at the steepest loss curve too as battery degradation is worst at the beginning of the car and tapers off in later years.

[disneysteve]

300K is great. Very few people keep cars that long. That makes the resale market much more promising.

[Singuy]

The banning of gas cars is actually kind of an emergency and there's a reason why the government is banning it. By having the government dictating what new cars can be sold, they will also be responsible for handing out subsidies for automakers to help with this transition. This transition will be painful for most automakers as it completely changes their business model from being hardware oriented to software oriented in order to be in the black. Car manufactures make most of their money by selling parts that break to out of warranty cars. The lower the margin on the cars, the less of a warranty (ever wonder why luxury cars provide 5 year warranty like Lexus but Toyota provides 36 months?). Car manufactures make higher margin on luxury cars while they make almost no margin on lower brand cars.

So it's kind of an emergency because actuaries doesn't care about information bias or confirmation bias. They just do calculations in order to make home insurance companies profitable. And their recent calculations doubled my home insurance here in FL. Yeah it's not a fluke that after multiple cat 5 hurricanes running around in the Atlantic kicked these insurance companies into emergency mode.

[ua_guy]

The banning of gas cars is actually kind of an emergency and there's a reason why the government is banning it. By having the government dictating what new cars can be sold, they will also be responsible for handing out subsidies for automakers to help with this transition. This transition will be painful for most automakers as it completely changes their business model from being hardware oriented to software oriented in order to be in the black. Car manufactures make most of their money by selling parts that break to out of warranty cars. The lower the margin on the cars, the less of a warranty (ever wonder why luxury cars provide 5 year warranty like Lexus but Toyota provides 36 months?). Car manufactures make higher margin on luxury cars while they make almost no margin on lower brand cars.

So it's kind of an emergency because actuaries doesn't care about information bias or confirmation bias. They just do calculations in order to make home insurance companies profitable. And their recent calculations doubled my home insurance here in FL. Yeah it's not a fluke that after multiple cat 5 hurricanes running around in the Atlantic kicked these insurance companies into emergency mode.

What would you say about the fact that some automakers are already committed to going EV in the next 10-ish years anyhow? It seems to be the direction that automakers are heading, and I'm not aware of any incentives other than shifting market demand and publicity right now. Honest question - I have not read much about the industry challenges or benefits of doing so. Other than that battery manufacturing is still costly but battery development is rapidly changing.

[Singuy]

What would you say about the fact that some automakers are already committed to going EV in the next 10-ish years anyhow? It seems to be the direction that automakers are heading, and I'm not aware of any incentives other than shifting market demand and publicity right now. Honest question - I have not read much about the industry challenges or benefits of doing so. Other than that battery manufacturing is still costly but battery development is rapidly changing.

As for incentives, there are talks about giving people tax credit or rebate without cut off for all manufactures(which means GM and Tesla would qualify again).

I would say every auto maker's commitment started just when Tesla's valuation is now higher than all of them combined. Analysts are now considering the ICE portion of the business of an automaker to be toxic assets.
If you read the commitments however, they are all very soft. Lots of them will use the word "electrification all our cars by 2030"...and "electrification" is another way of saying hybrid.

The rush to being all electric by 2030 is actually impossible unless drastic measures can be taken because battery supply cannot keep up. The most painful part of these automakers will be that middle point in which they can't mass produce EVs like how they would like to drive the cost down due to battery constraints, and still losing sells from their gas line up to EVs. Notice that when GM or Ford miss sales by 10%, they lose BILLIONS of dollars. It's a very capex heavy industry with razor thin margins. Once they lose their economy of scale, billions will evaporate monthly without the government's help(in the form of a loan or something). Imagine having 2x the assembly line vs before (one for gas, one for EVs) but selling the same as before if you are lucky.

The transition is not easy, hence analyst calls it toxic asset.

[bjl584]

I can definitely see internal combustion engines being replaced at some point in the future.
But, government trying to "force" that replacement to be electric and trying to do it by a certain date seems foolish.
Market forces will dictate change naturally.
Horses were slowly replaced by automobiles.
I'm sure someday something will come along way better than gasoline.
Might be electric, or it could be something that no one has even thought of yet.
I just doubt that government will spearhead that change.

[disneysteve]

I think that setting a date is mainly aspirational. I'm not sure that anybody actually expects the goal to be met but I'm okay with the government setting the goal. I'm also okay with individual companies setting similar goals.

[LivingAlmostLarge]

Let's see if they can pass the incentives. Another cash for clunkers.

[Captain Save]

it's going to be a slow process... it can gradually get phased out... Banning sounds like logistical nightmare ..but there are a lot of things I thought I would never witness that I see every day these days.

[jIM_MI]

The banning of gas cars is actually kind of an emergency and there's a reason why the government is banning it. By having the government dictating what new cars can be sold, they will also be responsible for handing out subsidies for automakers to help with this transition. This transition will be painful for most automakers as it completely changes their business model from being hardware oriented to software oriented in order to be in the black. Car manufactures make most of their money by selling parts that break to out of warranty cars. The lower the margin on the cars, the less of a warranty (ever wonder why luxury cars provide 5 year warranty like Lexus but Toyota provides 36 months?). Car manufactures make higher margin on luxury cars while they make almost no margin on lower brand cars.

So it's kind of an emergency because actuaries doesn't care about information bias or confirmation bias. They just do calculations in order to make home insurance companies profitable. And their recent calculations doubled my home insurance here in FL. Yeah it's not a fluke that after multiple cat 5 hurricanes running around in the Atlantic kicked these insurance companies into emergency mode.

Ford makes money selling cars to dealers, the suppliers are the ones which profit from after market parts.

[Snicks]

I think it's ridiculous. Fossil fuels have elevated the standard of living across the globe and the combustion engine is one of the biggest boons to mankind. And, I think it's ridiculous to pretend there aren't going to be unintended consequences of some other form of energy on a massive scale.

[Singuy]

Ford makes money selling cars to dealers, the suppliers are the ones which profit from after market parts.

Ford makes about 30% of the car inhouse, most of it includes the shell and drive train. Since an engine has like a few hundred parts in them, this is where ford pockets the higher margin stuff.

What is actually funny is that these car companies are becoming more and more like financial institutions holding a bunch of debt in the form of cars sold to customers. They enjoy making that interest but boy is this dangerous if there's a massive default rate on cars since those are depreciating assets.

[frugal saver]

Let's see if they can pass the incentives. Another cash for clunkers.

Cash for Clunkers was a horrible program. The cars that were being turned in to be crushed were cars that would have normally been sold to the people in the lowest economic level and it created a whole group of people that suddenly were priced out of being able to buy any car.

We have a ton of apartment complexes here and apparently they don't have charging stations. I've frequently seen complains on our local website that people are struggling to find stores/libraries/etc. that have available spots to re-charge--and then having to sit there with nothing to do while they charge.

I see so many downsides to having to rely on electric only for vehicles.