AAH #686 - Who Will and Who Won't Buy EVs

I'll online after hours is brought to you by bridge Stone Tires Solutions for your journey, Gary Vee John, how are you really good? Hey? Who's

going to buy EVS? We're going to find out today? To find out

today? Exactly right, So tell tell the audience who we've got on the

show today. All right. So we've got Casey Boyce, who is the

vice president of Automotive and Mobility and Energy. It's quite a long title to

fit on a card, and it is a company called Escalant. So thanks

for being here, Kesey, thanks for having me. Really a pleasure.

We've got We've got our good dear friend Paul Eisenstein of Headlight dot News.

If I got that correctly, all right, thank you new website to check it out for sure. Thank you, and uh yeah, Casey, I

gotta tell you, uh and for the audience too. I was so thrilled

when Gary arranged to have you come on the show because I think Escalint has done the best market research into the mindset of car buyers and especially how you guys look at different segments of the car buying population to try to figure out who's really going to buy EVS. Yeah, So why don't you run us

through a little bit of that market segmentation. Sure, So let me give

you a little bit of background first. So the segmentation comes out of a

study called EV Forward, and what we're trying to do is really understand where buyers are on their journey towards electrification. Right, So we're looking at the

entire market, people who own evs all the way to people who say I am never going to buy an EV. You're never going to even force me

to take the keys to one, right, So everyone in my cold dead fingers off my eyes, that's exactly right. Yeah, So what we want

to do with that that whole population is really understand motivations around EV and kind of where people are at. Right. And so since since you last had

a colleague of mine on the show, we've actually updated our segmentation. So

we've got six new segments that we looked at. And one of the big

changes from what we last did is that technology has become quite a bit more of a motivator for a number of different segments. So the consumer group that's

closest to buying and EV is what we call trailblazers. And these people,

they're very motivated by new things, so EV scene is new. They're very

motivated by technology, and so they see EV as the vehicle no pun intended for having really innovative in vehicle technology. And they're really motivated by the environment,

so they see EV as kind of a green thing that they can do personally. So the next segment down, kind of next closest to buying in

EV is what we call the altruist. And these customers aren't car people at

all, but they do care about the environment. They think climate change is

a big issue. They want to do something to help, and so for

them, they're interested in EV's because they're like, Okay, that can help with climate change. But they need a little bit of handholding around some of

the practical aspects of owning an EV. Unlike the trailblazers who will go do

a lot of self education. They need to know, you know, what's

the range on this thing look like? Where do I charge how do I

charge it home, what's the battery life look like? All of these kind

of practical considerations that people have. The next group down, which is fairly

close in terms of their likelihood to buy an EV to the altruist, but very different motivations. Are the techies, as you might expect, they're driven

by technology, right. They are not as fully sold on EV's as the

trailblazers though, so they still need a little convincing that evs are going to work long term. Right. It's an interesting idea, going to take a

look at it, but this isn't where we're headed for sure, for sure.

Right. The next group is actually my favorite. We call them the

dreamers. And what's interesting about them is that in many ways they look like

the trailblazers. Right. They care about the environment, they care about tech.

They want a fund vehicle, their car people, they're very interested in evs, but they're in this place in their lives that you know, they they have kids, right, so they're running into soccer practice or hockey practice.

They're you know, stretched in terms of paying for kids education and other things. So they might want the sports car, but they're going to end

up in the mid sized suv. Right. So they're dreaming of the thing

that they want, they may not get it for a little while. Right.

And then we've got the pragmatists, who are very practical transportation point A to point B. You know, if you can convince me, then an

EV will do that. I might listen, but I know the gas car

will do that, and that's kind of where my head is at. And

then we've got the traditionalists and they're more of the you know, probably my ice keys out of my cold, dead hand kind of people. Climate change

not an issue, not interested in new technology, they like their trucks.

They're kind of good with the way things are. So those are our six

segments that we've got at a high level. Do you have percentages? I

mean, is the dreamer group thirteen percent and the altriis five? I mean,

yeah, so we do, and it's fairly evenly split, so it's not exactly, you know, eighteen percent or so for each of those groups, but it's clustered around that. The dreamer and the techie and the altruists

are kind of the largest group, so a little bit higher than twenty percent or so each, and then sort of spread out a little bit lower among the other three. Have we seen a shift over the last few years as

long as you've been doing this study, or the EV positive at least the EV open type of buyers growing or shrinking? And are there things that will

move people back and forth. Yeah, So one of the really interesting things

that we saw for the first time last year in the study is that when we looked at the trending, we had been seeing growth in what we call EV and tenders. So these are consumers that sit in any persona that they're

likely to buy an EV for their next vehicle, and we've gone back and tested they're about fifteen and a half sixteen times more likely to buy an EV than the average consumer is. And so we started the study in twenty twenty,

it was sixteen percent of the market. Last year it was twenty five

percent of the market. We're getting ready to release our twenty twenty four study.

It dips slightly down to twenty four percent, but that's still roughly a quarter of the market that's an EV intender that to be around error as opposed to it could be. And we can talk a little bit if we want

to about kind of where the state of the consumer psyche is on EV.

But we've seen that growth and in the first couple of years of the study, what we saw is that the EV resistant consumer, people who aren't likely to consider an EV regardless even if they're introduced to one. That group had

been shrinking and the EV open had been staying basically the same, and then we've seen that growth in EV intent, so people were kind of moving through from EV resistant to EV open to EV and tender. Last year, what

happened is that the V open shrank and EV and tender climb and EV resistant stayed the same. So what essentially was happening is that people were kind of

on the fence about EV for a couple of years, right that I'll consider it, I'd like to learn more, you know, may or may not work for me. And then last year we started to see some polarization where

people are either saying I'm going EV for my next car, or There's no way that's going to work. I'm not even going to consider it. So

we're starting to see a little bit more of that in the consumer So just one follow up on that. I've talked with a few other data trackers,

Yes, Jennie Power in particular, one of the gentlemen oh I speak to regularly, said that he saw a big shift last spring that also coincided with what he saw happening in the mainstream media. And for several years, mainstream

media seemed to be just lapping it up. EV's are the most wonderful thing

in the world. And yet about that time I noticed the same thing.

I've heard it from other people. Suddenly a lot of the newsweeks or entertainment

tonight, you know, all these right places suddenly started picking up on negative propaganda wherever it came from. And he started seeing a data shift, a

fairly rapid shift in some segments of the market, going from either EV pro or EV neutral too in some case very harshly anti EV. Did you see

something like that? We didn't see something that's quite as stark as what you

described. So certainly we've seen, you know, some of that tone shift

in the mainstream media. But what we see is that most people don't pay

attention to the media the way that probably the four of us do. We

might as well leave guy. Yeah, that doesn't include the audience, right,

yeah, yeah, present company you excluded. Right. But you know,

when we ask people about you know, where they've read anything about EV's, it's roughly half of new car buyers, So I mean, still a decent chunk of folks, right, And we are seeing some of those things, like, you know, concerns about fires and you know, sustainability of sourcing materials, and all of those kind of concerns showing up in what people are saying. But overall, we're seeing still a move in the positive direction

in terms of sentiment around evs, and really the only parts of the population that are kind of they aren't even really moving more negatively, they're just staying in sort of a negative you know, perception of evs is the older customers and truck and tenders, which there's a fairly high overlap between those two groups, but that's kind of where we're seeing that negative sentiment. And we ran

a study actually at the end of last year because you know, as we all know, the industry press was talking about, oh my gosh, you know, EV's are never going to sell the days of growth or over the sky is falling, and we wanted to see whether consumers were picking up on that, right like we're all talking about it. And what we found is

consumers weren't seeing it. So, you know, forty two percent felt like

EV's were moving in a positive direction. You had another thirty or forty percent

that we're saying, you know, they're kind of the same way that they were, and only a few that were saying that they're moving in a more negative direction. Consumer We're saying automakers are selling as many as they can make,

automakers are making a profit on every EV. You know, all of

these things. You know, we can dissect a little bit in terms of

whether it's true or not, but in terms of the consumer psyche, they're kind of looking at it and saying, man, no, it's kind of full steam ahead here, all right. So let me quote you to you

uh oh, okay, and I did you agree? Yeah, I didn't

say it. Despite there being more EV models with higher range and lower prices,

EV sales growth for much of the year, meaning this year, this year, yeah, will be relatively slow compared to what we saw in twenty two twenty three. Assuming that interest rates moderate, we will see an explosion

of EV sales in the late twenty four as consumers feel more comfortable with payments in vehicles with the next port become available. So break that down for us

and tell me if you still believe that to be true. So I'll cut

to the chase. Yes, I still believe that to be true. But

let me back up to why we're making the statement there. Why you know

why I think that we're going to see this relatively slow growth through much of this year. When we look at consumers and whether they say they'd be willing

to wait for the right BEV. Every year that we've run the study,

it's climbed and it's now forty percent of the market that says I'm going to wait. So if you're not having to buy a new car today, you're

sitting on the sidelines. And there's a couple of things that are causing people

to sit on the sidelines. One is model availability. Right, if you're

a Toyota loyalist and you want a sedan, there's not a Toyota EV sedan.

There's not even a great Toyota evsuv if you're an SUV person. So

having product that is compelling to people is really important. Now that's changing,

right, There's been kind of this Cambrian explosion of EV models. So there

are more brands, more segments that are available, but there still are some gaps in the market. The second thing is the economy. So we actually

ran a global study last year that looked into we're calling it the quality of living crisis, right because it's kind of a combination of inflation in people saying I'm cutting back as a result. So we saw something like forty percent of

consumers in the US who said I'm not spending money on things that buy me joy. That's like an ice cream or going to the movie. Right now,

those people aren't all necessarily new car buyers, but people are feeling the cost of living. Right. You add increased interest rates right which are making

payments higher. You add that eves are more expensive than nice cars. Last

I saw it was about five thousand dollars differential. That has been coming down,

but it's still there. And so from an economic standpoint, this kind

of feeds into this idea of if I don't have to buy now, I'm going to wait see what happens. Now. If the FED brings the interest

rates down, that changes the multipayment dynamics. Of course, the tax credit

dynamics have changed. You can now put the cash on the hood at the

dealership. You've got more and more captive finance that are running it through and

leasing, so that helps there. And then the third piece is the nast

transition. So when Ford made the announcement last year, and then everyone kind

of followed pretty quickly that they were going to be adopting the Tesla port or J thirty four hundred. Now, I guess as it's called. What we

saw was consumer saying that's great, we don't like standards wars, so good on you automotive industry for like coming together around a single standard. But they

also are saying, again, if I don't have to buy a vehicle today, I'm going to wait until I can buy the car that has the port built in, which you know, as far as my understanding, and you all may know more, it's going to be kind of model year twenty five is when we start seeing that happening. So those three factors together are really

causing a lot of people to sit on the sidelines. And so again,

assuming nothing crazy happens with the economy and the FED follows through with bringing the interest rates down, once we start seeing those models with the naxs port built in, I think we're going to see a lot of pent up demand showing up in the sales numbers. See last year EV sales in the US were

a little over a million, almost one point one million. We had Warren

Brown, who's a forecaster on the show What a month Ago or something like that, and His prediction for this year was one point five nine million evs.

You think that's realistic, Well, we don't have a light duty EV forecast, so I don't have any data to kind of back up grow that much. I think potentially. I mean what we're looking at is, you

know, we expect will end up somewhere around ten percent of sales this year will be EV So they'd be a million five you know, we're we're running it, are a million share. It's pure BEV, pure Bev and that's

the retail or. Is that overall? That's retail Okay? So so yes,

so so to this point to put some some numbers on it. So

Cox on On would have came out yesterday with their Automotive Dealer Sentiment Index where they look and see how dealers are feeling about how things are going. So

there's a quote embedded in their announcement yesterday, but I want to precede it with a quote that was made in January sixteenth by the same person. So

Valerie Veldez Stretti, who is the director of Industry Insights at Cox Automotive, said Americans bought a record shattering one hundred eighty nine fifty one electric vehicles.

You were damn close last year, and we expect that growth to continue in the future and yesterday's release, she said in twenty twenty four, Cox Automotive Team expects the industry to fully acknowledge the fact that the average consumer needs to be convinced on the merits of going electric, and many won't be easily persuaded.

The EV market is likely to see a rise in the number of models, incentives, discounting, and advertising. However, selling more evs will require

more effort on the parts of dealers. So whether you're going to be able

to get that bump is going to be a lot of heavy lifting at dealerships.

Do you see that being a requirement. It's always the dealerships, right,

I mean that's where we buy cars except for Tesla's so yes, and I think going back to where people are at, you know, a lot of the early adopters didn't need some of that handholding, right they came into the dealership. They knew more than the salespeople about the vehicles, about where

to charge, about how to take care of the battery. They weren't put

off by the fact that evs cost ten thousand dollars more than an equivalent ice model. The consumer that's going into a dealership today buy and large, is

not in that same place, right, Like I talked about the altruists and how they're not car people. They're motivated to buy an EV, but they

need some of that handholding from the dealer about what life with an EV is like. And that's really where people are looking for that information. Right.

We work with a lot of energy utilities and many of them like to say, Okay, you know, we're talking electric vehicles, so they're going to come talk to us, And what we see when we talk to consumers is no, they're not. They're going to talk to the dealer. That's where

they want to get information. So yes, there's a lot of heavy lifting

that needs to happen to the dealer because the buyers that are coming into showrooms today won't have done as much of that self education, or maybe need a little bit more of reassurance from the self education that they've done about what life with the BEV is going to look like. See, I think it starts

before that. Actually, because dealers order the cars that go on the lots

tru it's not the customers who do it. You know, it's the complete

opposite of the Tesla model, right, And so unless dealers order evs, you know, uh, there's not going to be EV's for customers to go in and shop for, you know, unless car companies can say, hey, you want those F one fifties. You got to take all these Mockys

and Lightnings with it. But to me, the real challenge is going to

be getting dealers to order these cars in the first place. Yeah, and

I mean I definitely see some of those dynamics, right. We've heard dealers

say that they have big concerns about kind of the EV sales trajectory and whether some of the policy goals are achievable. I think there is, I'll say,

in certain areas of the country enough demand that there's kind of a snowball effect, and you're going to get dealers who are following the market saying, yeah, I've got to order the Mokeys. And I've talked about it on

this show. Now this is in the Detroit area. I can't say another.

I know three people whose dealerships tried to talk them out of buying an EV. In fact, in one case, refuse to even order an EV

for a customer who wanted to buy one, right, and yet we did over a million units last year, right, So right, So what happens if dealers say, hey, let's try to us all these things right exactly?

And I think again, you know, one of the things that we see in terms of the consumer dynamic is that when you know someone with an EV, that has a big impact on your intent to buy. And so

that's why I said, in certain areas of the country. You look at

California, where you know a quarter of new vehicle sales are evs, pretty sure you're going to know someone, as opposed to North Dakota where it's you know what or something like that. So you're touching on something, which I

think is a pretty interesting phenomenon. Power and a couple others have said that

there's a distinct difference with your contact with either an EV or an EV owner.

I can't remember the exact percentages, but within the last six months, Power came out with a number. It showed that if you have had serious

experience with an EV, you've driven it, maybe you previously owned it.

You may know people you are if you will up here. If you have

written in an EV but have never driven it. You drop and if you

have no experience with an EV, you're slightly above ground level. Are you

seeing the same thing? And so is the industry? Is one of the

important things for the industry, if that's true, finding a way to get butts and seats. That is exactly what we suggest, is by and seats,

because we're seeing the same thing. And you know, I think when

you look at a perspective buyer, they know gas. They've grown up with

gas. It's just been kind of in the air, right, you know

how to fuel it, you know how to deal with it. Yeah,

literally in the air. And we're talking about a different powertrain, We're talking

about a different way of fueling. We're talking about a different way of traveling.

And people naturally have questions and people are naturally uncertain, right, Like, you know, there's no reason to look down on someone who I'll tell you a story. I've been an EV driver for a decade. My mom

was riding with me in my first EV, I think, and it had recently rained, and we were driving through a puddle, and she says, can you drive these things through a puddle? Of course, the answer is

yes, but it's a reasonable question. For somebody to have, right,

and so there's all of these little things, and I think that's we're having the butts in seats having knowing someone so you can ask someone and you know, a quote unquote stupid question that you might feel bad about at the dealership, but you might ask your son or whoever. Again, they're reasonable questions

and people just want to understand what this is, So that experience is really critical. Well, one more thing. We have a tendency as media and

a lot of the studies I see from from folks in your position talk about the things that don't sell evs range anxiety, pricing, charging, anxiety, and so on. What are the things that are clicking? What are the

things that you're seeing. Maybe it's a case of somebody in a lower level

of interest, maybe the adoption. When they suddenly find this, they go

saying like the compelling yeah, yeah, yeah, the one thing that well, okay, let me back up for a second. You know, the

things that people expect of evs are not necessarily AHAs right. They expect savings

in terms of operational costs, right, electricity costs less than gas. They

expect environmental benefits evs cleaner than gas not really an aha. I think for

us, the big aha is this idea of not having to go to a gas station again. Right. People do it in their day to day life.

They don't complain about it because you've got to do it. But when

they say, wait a minute, I never have to go out of my way to get gas again, that's kind of cool. And we've seen this

over and over again in focus groups. We've seen it in the quantitative data

where that really resonates with people in a way that some of these other things.

Yeah, yeah, it's environmentally friendly, but that's nice, right versus I don't have to go to a gas station again. That's really a great

benefit to me. So that's one of the big things that's clicking. And

performance interior space. I mean, most evs, with rare exception, you're

going to get class above interior space. A lot of people I talk to

who like it. One of the things that and this is anecdotal, but

I hear people go, oh my god, it's just instant power. They

don't necessarily say torque. So I know that there are a lot of things.

Again, back to the butts and seats. Once you get in,

you discover wow, this is pretty cool. And I think that's where the

experience really matters, because when we look at some of the expectations of EV owners and non owners. The EV owners pick up on things like the experience,

the interior space, they pick up on things like the acceleration, and the non EV owners it's not really on their radar, right. So if

you can have that firsthand experience and know, oh, this will throw me in the back of the seat, or at least it'll be the guy next to me off the line at the stoplight, then you start to get it and see those benefits that the EV owners are recognizing. But it's that's not

something that's kind of entered the mainstream consciousness in the same way that oh, I don't have to go to the gas station has. But to the people

who are about taking their kids to school and getting to work reliably, as they would say, I'll buy a Toyota because I'll be able to do those things that are problem I mean, do they think about things like performance?

You know, when you get into an EV, yes, you can have incrementally larger space because of the layout, But I mean it isn't like you're you're in you know, a suddenly an auditorium. I mean, it's it's

no. But people spend money to go up from an interior that's subcompact to

a compact or even a Compact plus. And you see that. I mean,

look at look at some of the ones out there, and Ionic for example, get in the backs, even Ionic six and tell me about all the lake groom you got there. Well, that's a design issue, saying

with the exactly. But I mean there's always there's always a violation of the

rule. You know. I don't think people, the general public, you

know, buy a car based on zero to sixty times, definitely, not on quarter mile times or anything like that. They don't. It's not even

off the line. It's when you you've got that Hey, I want to

move into the spot in traffic right now, boom and an ev you're right there. There's no mash to paddle, get the transmission to kick down,

get the engine to revenue. It's instantaneous, and it's that ease of driving

where all of a sudden you realize, Wow, this thing's so easy to drive. I think when you say performance, I believe that's where the general

public is going to say, you know, I really like the performance of this. It's not off the line acceleration. It's being able to move around

in traffic or you know, merging onto the highway or you're pulling out and here comes the garbage truck barreling down. You got to get going and boom

you're gone. That's the kind of performance I think that's going to convince the

general public. So JADV is a better driving experience. And I will say

potentially even non car people, right, No, that's what I mean, yeah, car, Because you know another quick story, my wife is also an EV owner. She drives an EGOLL, so not the quick accelerating EV.

I think zero to sixty and I don't know, seven and a half.

It's not tomorrow, but it's it's not as quick as most evs.

But she loves being able to beat cars off the stop lie And she's not a performance minded person at all, right, but she loves that instant torque and that ability in cut and thrust kind of around town driving. And again

we see that in the data that EV owners really value that it's not really on the radar of anyone else. So what if your wife had GTI wouldn't

she have the same performance possibly, but then she wouldn't be driving an EV.

But it's still be a bolkswagon, still be a golf. I'll let

you talk to her, how about that. So what I wonder about is

is this behavioral change that you know, you guys looked at people taking road trips and you know, for people who are driving gasoline powered vehicles, as you said, you know, gas stations are everywhere, the ubiquitous charge stations aren't. So talk to us a little about what you discover the way people

take trips in what would facilitate their buying an EV to make taking these trips easier. Yeah, so most people take road trips at least once a year.

I mean, there's you know a third of people who say they never go more than you know, four hundred miles or so in a year.

But most people take a trip at least once a year. And again,

many people they know what that looks like in a gas car, right, there is a lot of uncertainty around what it might look like in an EV.

That really is sticking in people's minds here and I'll talk a little bit about kind of how that plays out in a moment. But one of the

really interesting things that we found is that when people take road trips, almost everybody stops at least once, maybe multiple times on a four hundred plus mile road trip, and the average link of they're stop twenty six minutes currently.

Yeah, so bathroom breaks, got get yeah, getting something, you need to get that data. Yeah. So when you look at it objectively,

can an EV work in that scenario? Maybe not a bolt, but certainly

like an Ionic six? Right, But it's that uncertainty because they don't know

what it's going to look like in the Ionic six. They do know what

it is going to look like in their Santa Fe right. And there's a

couple of things that play into that. One is that EV charging infrastructure is

not visible. Right. Gas stations, you've got big signs plastered over the

highway. You've got you know, the blue signs on the side of the

highway telling you there's a shell and a VP coming up. There's none of

that for EV right, and a lot of the at least the older infrastructure.

The industry has been getting better on this. It's kind of the beige

utility box with wires stuck in the back corner of a parking lot somewhere.

So if you don't know that it's an EV charger. You have no idea,

it's just some utility thing over there, right, So you know that visibility is really critical, and that, by the way, is one of the things that helps drive EV intent, as well as awareness of charging infrastructure.

But coming back to the idea of road trips, it's one that visibility and then two being able to route to it right. So it's really only

been fairly recently that other OEMs have caught up with Tesla, which had route planning basically from day one, where you say this is where I want to go, and it says, okay, you got to stop at the supercharger and the supercharger and the supercharger and you're done right. So that's a big

thing how technology can enable these road trips and provide some of that certainty.

In the absence of that certainty, what people want is an EV with huge range, because they're saying, if I do four hundred miles and EV with four hundred and fifty miles means I can just go straight through and I don't have to stop, and I don't have to worry about finding infrastructure, worrying about whether it's broken worrying about how do I charge this thing? Like I

just go right. So there's a lot that people have to just really get

some reassurances on in being able to use an EV the road trip. And

these are all solvable issues, right. The infrastructure is world's better than when

I first bought an EV. Still has issues, but it's it's a lot

better. But it's that confidence that buyers need for them to be able to

say, Okay, I'm going to spend fifty thousand dollars on an EV because I know it's going to meet not just my day to day but it's going to meet those road trip needs once I hold it. Thought Paul, We've

got to take a quick commercial break for a great sponsor, Bridge Stock.

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warranty. All Right, we're back talking about who's going to buy evs and

who is not. And Paul, you had a question, Well, it's

interesting you say that because I have an F one fifty Lightning Okay, and there have been times where I've been a little bit hesitant certain directions, whether I want to take that or some other vehicle going up north. I had

reports of a lot of defective or malfunctioning chargers, and I think that's one of the biggest things. I think people are becoming aware that the reliability is

as much an issue as availability, and until they fix that, until you know not only you can find a charger, but you're going to know that that charger will work, that's going to be as much an issue as just the lack of chargers. So I'm going to agree and disagree with you.

So for EV drivers, yes, absolutely. When we look at non EV

drivers, reliability isn't very much on that radar. Some people talk about it,

but it's really are there enough chargers? Are they where I want to

go? So it's really that visibility of infrastructure, and then we get into

the experience that you've had and that I've had, like it's got to work when you show up or else things go south Throughly, I think that's starting to get out there. We're seeing more studies, more of us are writing

about I want to change the subject just slightly. In the last few months,

we have seen a number of automakers start to say, Okay, how do we change our strategy a little bit. GM is a great example,

Mary Barr, nothing but ice until we evolve totally to evs. Now,

all of a sudden, plug in hybrids, and we're hearing that more and more. I was just with some of the Hyundai folk on a test drive

of the Santa Fe, and I know that they're looking at adding more plug in hybrids. What are you seeing? How does that differentiate? Are they

are consumers aware, is it a viable alternative, a potentially viable alternative, or what. So there's a really interesting gap between when you ask consumers are

plug in hybrid's a good step between gas cars and evs and a majority say yes, And then you ask them are you going to buy a plug in hybrid? And that number shrinks substantially. So we have seen growth and interest

in plug in hybrids over the last four years, but it's only about sixteen percent or so of the market that says that they're interested in plug in hybrids.

And I think part of the thought process that people have is they recognize that a plug in hybrid, you've got two powertrains in there, and so they're thinking about, you know, one what's the cost impact. Two,

what's the maintenance and reliability impact? And is that something that I really want

to get into. So while there certainly is a use case for plug in

hybrids, and I think pickup trucks is a great use case for what it's worth for, you know, towing and hauling and things like that. And

there are consumers that are going to be more comfortable in a plug in hybrid that a lot of people are thinking about it in the sense of I'm going to stick with gas until I'm comfortable with EV. I personally am not going

to do that half step where I've got the option to both plug and gas because it's just too complex and you know, I see the future as EV That's where I'm going to go, but I need to be comfortable with that first. Is it changing in terms of more and more people thinking that thinking

of phivs is viable. There are more, but again the growth has not

been the same as what we've seen in pure evs or in pure hybrids.

Yeah, what about non plug hybrids. I mean they're out selling evs,

they are, and we have seen growth in interest in hybrids as well.

So that's you know, if we look at the growth trajectory of BEV and hybrids non plug in they're very similar. Hybrids started from a much higher base

than EV did, and then plug in hybrids. Again, we've seen some

growth in the interest in that, but it's not been as significant as for hybrids or for full BEVs. Let's talk pickups more, because i'd love to

get your input on this. The Detroit three know their pickup buyer inside out

and backwards. I mean, they know their truck customers better than any other

segment, and yet they've gone with electric trucks. And you tell me,

but it seems to me that pickup buyers are the most conservative in the market.

They are the least likely to go electric. And it seems to me

curious that these companies that seemingly know this customer inside out and backwards, decided to go with electric trucks, which to me, at least the first generation look like they're not going to sell very well. Well, yeah, but

see, I cut forward some slack in the sense that it knew it had to rush to market. Instead of doing a clean sheet design like GM and

Stalantis are doing. It rushed an F one fifty to the market because it

wanted to be. So I'm cutting them some slack because they didn't go.

They are working on a clean sheet design though, so I mean they're back in the same boat. And you know what has Ford said, seventy five

percent of the people buying a Lightning have never had a truck before. They're

not truck buyers coming into the EV segment. So what's your outlook for how

this goes? Was electric pickups? John? I mean, I think you

hit the nail on the head is that truck buyers are the most antiev of any group. I mean, there are some EV and tenders in there,

but it's the smallest percentage of any segments and tenders. And I was going

to mention, but you brought it up the idea that you know, Ford has seen an influx of non truck buyers. I'm not a truck guy.

Driving the Lightning made me giggle. There are very few cars that make me

giggle. Right, you take something that big and you huck it around a

corner and floor it and that thing just goes. I mean, it's it's

impressive, right, fabulous it does. It's a great truck. But again,

this is coming from a non truck guy. Right right. And you

know, I've talked to ev truck owners that have have towed with their trucks and it works great. I mean, that torque is fantastic for towing.

Problem is, your range gets completely killed when you're towing, and so you know, that gets you back into the cycle of well, I'm doing these road trips and how do I charge? And are there pull through spots or

do I have to unhook my trailer every time? I mean, it just

gets into this whole logistical nightmare. So you know, my best guess,

and you all probably have a better insight on this than I do, you know, given your coverage of the industry. But it seems like the move

to electric pickup trucks was, well, we've got a lot of margin in these trucks, so we can eat some costs by making them electric and still sell them. But the market's just not there yet. For I think the

other thinking was, look, Evie is a race to scale, right, If we can get to manufacturing scale, we can get you know, to our break even, we can start to make money. What's our biggest volume,

it's pickups, so we should go that way. But it seems to

me they took their eye off the ball when it comes to the customer of that truck, and so a follow up question on that is, is RAM getting it right with a range extender? Will the traditional pickup buyer say,

oh, yeah, if it's got an engine, then I'll go electric.

It remains to be seen. I'm cautiously optimistic though, because I think it

addresses that range issue. With towing, you get the performance of the electric

motor, but you aren't hampered by the fact that, you know, a trailer adds all sorts of aerodynamic drag in the same way. I think the

key probably will be the butts and seats as we were talking about previously.

Right, If the rambuyer gets in and understands the performance of the vehicle, then they can be sold on it. If they just look at it and

say, you know, something with a plug, not really interested, then they're not. So I'm really fascinated to see what's going to happen with that

vehicle. We'll have Mickey blind the show next week. The head of par

trained for stilentis who will be able to tell us if you will tell us all about the range extenter. I'm sure that's right here, absolutely so talk

to us about the behavior change that is necessary for people to have an EV as a daily driver. How much of a challenge is it for someone to

go from owning a gasoline vehicle to owning an electric vehicle? And what is

the willingness that you see as you survey people for them to say, you know, I got to do all that in order to make this work.

So I think there's a couple of ways of answering that. The first is

kind of the initial setup, right, which is, you know, how do I charge it at home? And we see that as a big psychological

as much as anything barrier to many consumers, Right you're buying this vehicle.

But then there's this whole secondary decision set and costs associated with well, which EVS do I get, Who do I hire to install it? How much

is that going to run? Right? So just kind of the the actual

setup piece is daunting, and we've been really gratified to see a number of OEMs just bundle the v S E and installation with the vehicle. It takes

that secondary pain point out of the picture. Right here you go, You're

ready to go from day one, right, So we think that's a really good thing. As far as kind of the day to day behavior after that,

there's really not a whole lot of change other than you know, missing the gas station. I think the bigger issue is with road trips and with

the psychology of how you charge the vehicle. So on road trips, it's

you know, as we talked about before, knowing where the chargers are, knowing how to use them. The other issue, and this kind of comes

back to the reliability, is that you know, if you pull up to a gas station and a pump's not working, there's usually another pump there, or if the whole station's out for some reason, you're going to go back and get gas in another week anyway. So you've got a lot of bytes

at that apple. Versus, if you're doing a road trip once or twice

a year and you run into a station that's down entirely, you can't get any charge. You know, that's one of maybe two experiences you have with

the fast charging network, and that's that's a pretty negative event, right, So so that's one thing that again buyers need to get some comfort with.

And then the psychology of charging, you know, going for many and not everyone fills their GASCAR. This way. But you know, many people will

run it till it's a quarter tank or whatever it is. They'll fill it

back up and repeat the cycle. You don't need to do that with an

ev right, you only need as much charge as what gets you to the next place you can charge, so it doesn't you don't need to go zero to one hundred or twenty five percent to one hundred, or whatever the case may be. And that's a shift in mindset for many people. And we've

run into this, you know when we go to a charging station and we see the people that say, well, I'm waiting for one hundred, Well, where are you going next? I'm going fifty miles up the road.

Well you're probably good to go now, right, So that mentality shift is something new for many people and it just takes a while to kind of get comfortable with that. So another area that the industry has to deal with is

the fact that there were what fifty million plus people that don't have the ability to put in a charger at their home. We are seeing some changes there.

A few parking lot companies Parking Inc. Or whatever it is out of

Philadelphia. It claims to be the largest operator of parking structures in the United

States and Canada, they're starting to put it in. But how much of

a problem will it be to get people who will never be able to charge at home at least where they're living right now, for right now, not a problem. And here's why. We Actually we've heard that sentiment a lot

from folks, and so we actually did a study last year looking at EV owners and EV intenders who live in multi family units, so people who inherently can't install a charger where they live, and we wanted to understand, you know, where they were at on this question. And as you would expect,

they said, you know, if I could charge where I live, that'd be most convenient. But they said, you know, I see chargers

around, and if I buy an EV, I know where I can go.

I can walk to a charger and you know, get the charge that I need. And we actually saw that. It it's slight, but it's

real that there are both more EV owners that live in multifamily than in single family and they're more EV and tenders than all my family. Say that again,

Okay, yeah, that is that's mind. Say it again. That's

exactly the opposite of what I would have expected. So as a and this

is by percentage, not total number, but there are more EV owners as a percentage of people in multi family, and more EV and tenders in that live in multi family. So you're saying people in apartment buildings, and which

is the greater DA, which is exactly the opposite is what we thought, right, We thought it would be that, hey, I can't charge at home, and so I'm not going to buy an EV and I'm not going to be interested in an EV. But then if you step back and think

about it, where a lot of these apartment units are are in urban or suburban areas, so they're denser. That's where a lot of the EV infrastructure

is. And again when you look at why they're buying an EV and why

they're not terribly concerned, is because they're seeing that infrastructure again, the visibility of the infrastructure. And many of them are saying, if I buy an

EV or if I own an EV and I can't charge where I live, I can go somewhere, I can walk, I can you know, hang out at a coffee shop, well at charges what I can figure this out essentially, and so it's not as much of a barrier as people think it is that being said, I do think from a convenience angle, getting more charging installed at multifamily. I mean, nobody that we talked to said,

oh, I'd rather not charge at home, right, Yeah, So you guys say over seventy percent of BEEV charging happens at home, so if most of the owners live in places where they can't charge at home. So as

what I'm saying is as a percentage, there are more multifamily dwellers that own evs than single family owners that own an EV. So the absolute numbers skew

towards single family in terms of how many people own an EV, but as a percentage of the people that live in those different housing types, it's higher in multifamily. And you know, again, you know, for the people

who are charging it home, most of them are single family eighty five percent of new car buyers or sing single family homeowners. Right. So I mean

that just sways it in that direction that you can install it at home.

But as you point out, Paul, there are plenty of people who don't live in a situation where they can install an EV charger, and we need to accommodate for that. But you know, public charging infrastructure investment essentially accommodates

for that right now, So I have to come up with another question related to that. Okay, where are the other surprises? I mean, we

expect that California is as you said before, what twenty five percent of people in California are buying evs. There's got to be some other surprises, some

little areas that you wouldn't expect EV's to be strong and that they are, or maybe vice versa. Hmm, I'll jump in and get your reacted.

Yeah, Texas in Florida, now not the full state, yes, but so Austin, I hear is a hot bit of EV activity what you might expect. Yeah, and places of Florida very conservative state, but also places

of it very hotbed at EV activity. Yeah, yeah, and that's true.

Those are big EV markets. New York and Illinois would round out the

top five with California there. And you know, again, I think some

of it comes down to that that urban sort of rural die. Right.

You've got a lot of infrastructure in the urban areas, including in Texas and Florida, and that that confidence that seeing public charging infrastructure brings is huge that can't be overstated. Well, One of the things you guys looked at was

was this public charging that if John runs a store and Paul runs a store and John store has charging, people are going to go there and spend more money John than they will with Paul. Yeah, so so how important is

that for the EV driver? It's nice, right, It's nice to have

additional options to charge. We actually think that there is a competitive advantage to

retailers and installing charging. Now, part of the trick that they've got to

figure out, or the business model really that they've got to figure out, is that it's more attractive. It's if it's a DC fast charger than if

it's a Level two, and DC fast chargers have course cost quite a bit more money to install than a level two and to operate. Yes, so

I mean there's a little bit of a balance there. But yeah, we

do see that consumers say, if there's a choice between two retail outlets, I'm going to go to the one with an EV charger. If I've got

an EV, I'm likely to spend more time there, and that should translate into additional dollars for the retailer. So I want to go back to the

traditionalists, the people who say, no way in hell, I don't want anything to do with them. How big of a percentage are they of the

car buying public? And here's why I'm asking Yeah, As you know,

in the next couple of weeks, the EPA is going to release its emission standards greenhouse gas standards for twenty twenty seven and beyond. And even though the

Biden administration has said it's going to give the industry a little bit more with room, there ain't much wiggle room there at all. And so we're going

to looks like we'll see what the EPA comes out with emission standards that will require sixty seven percent market share by twenty thirty two. So how big a

cohort is the people who say, no way in hell will I ever take one? Well, I'll answer that in two ways. So the traditionalist that

PERSONA specifically is around about seventeen percent of the market, so you know it's it's smaller at least a bigger group. But the second way I'm going to

answer that is that we've got a group that we call ev resistant, which includes most of the traditionalists but some of the other personas as well. And

those are people who you know, they're probably not going to buy in their next buying cycle, maybe two buying cycles before they go down the road of buying an EV. And that's about thirty eight percent of the market. So

you know when you start saying, okay, sixty two percent has to be EV, well, if you got thirty eight percent of the market, that it probably not there yet. That's going to be a challenge. What would

it take to change their minds? Some people, their minds are not going

to be changed, right, They're just died in the wall. They're going

to buy an ice carp until they just can't anymore. But again, I

think a lot of what it comes down to is some of the practical considerations.

Right, We've got to get to price parity between ICE and EV.

We've got to have the right models, brands and segments available for people.

We've got to make sure that charging infrastructure is ubiquitous, reliable, and visible.

Right. A lot of this is just really reassurance. Again, you

know you mentioned it Gary before, the idea gas stations are everywhere, Right, people don't have that view of EV charging. And until they get to

that point where they view EV charging as being everywhere, they're not going to have the confidence that an EV can serve them and say the same way that a gas car can. So you know, it's a lot of just block

and tackling to get people there. So it's truck buyers are very practical.

They're very conservative, but they're very practical. The truck's a tool, right,

And if you can solve the range issue with towing with a pickup, I mean, why would you not go with an electric truck? I mean

to your point, TORQ is fantastic. I mean you can toe so much

more easily with anything, and there's the built in power points in the bed or the front. Yeah, got power right on board, right, Yeah,

just solving the range thing with towing, get the resistant the antiev people to to go. You know what, maybe I was wrong, I'll get

one of these. It might. And the reason that I'm I'm hedging.

And let me add one more data point is that truck buyers and those EV resistant they also use battery operated other stuff at a much higher rate than everyone else, all all the power tools exactly right, So I mean they're they're used to battery operated stuff, right. But I think part of the equation

here, and we saw this a couple of years ago and it certainly continued.

Is that there's a political polarization that's happening. So you know, yes,

there is the practical practical concern. If we can solve the towing range

issue, great, that addresses that, and there's a lot of other practical benefits of a BEV in a truck platform. But if you know, driving

in EV screams I'm liberal and that's not part of your identity, that's a really tough sell. So sort of sticking with the political thing a little bit,

So to what extent does the fact that there's the potential seventy five hundred dollars text credit play into people's decision making regarding EV's And do you see the possibility that if that goes away, that suddenly this acceptance of EV's will not be as great as you might anticipate it. Well, that's one of the

reasons we saw this down last year is because we saw the new tax law come into effect and a lot of models lost eligibility. Right, So,

I mean, I think the answer is that it plays in quite a bit.

You know, we talked about price parody between ICE and EV, and so that tax credit basically buys down the difference between ICE and EV, and that's where buyers today want it to be, right, is they're not willing to pay more for the EV. Moreover, we've got examples of China and

Germany where EV incentives were throttled back sales exactly exactly. So what are you

saying, Maybe this is outside your data collection area, but what are you saying in terms of the shift from purchase to lease since that's giant loop loophole in the i R. Yeah, so it's kind of outside of my area

right where we're not looking at the actuals. What was really interesting is when

we looked at this a couple of years ago, we saw a between EDY owners who very much well at least compared to kind of the average car buyer, were on the least train to ED and tenders that mirrored more what the split between lease and finance looked like. So at the time we looked at

and we said, Okay, you know, we're going to see a little bit of a decline in leasing EV's but yes, that loophole is certainly moving people. I think it's moving people back into a lease because again, they're

looking at the cost parody. And when we asked people about the tax credit

and what would happen if they were shopping for a vehicle and thought that it could get the tax credit and then found out that it didn't. We saw

a pretty big chunk of them round about thirty percent that said I'd go buy another vehicle that had the tax credit available. So, I mean it's definitely

shifting buyer behavior in terms of being able to apply that tax credit to a vehicle. Did anybody say I'll buy an ice car? Yes of that?

Wow? Yeah, so basically so. So I mean, doesn't that seem

to indicate that this is really an you know, let's take Tesla out of people buy Tesla's sax or no tax But it's it's like an artificial market.

I mean, if suddenly the government said I'll give you seventy five hundred bucks to buy a muscle car. We've seen muscle cars exploding, right, I

like that Gary. We're going to get that Gary. We're going to have

seventy five hundred available on the new Dodge. I'm talking about cars with Hemi

engines. Okay, yeah, I mean I think when we look at Eve's,

they cost more to produce right. And so you know, we talked

a little bit earlier about the cost curve, right, John, You were talking about you want to buy down the production costs essentially by getting to scale, and that's that's where we are right now, is trying to get to scale so that cost can come down. The delta between EV and ICE has

continued to come down over the years. I think, you know, eighteen

months ago it was twelve hundred dollars and twelve thousand dollars something like that.

Then seventy five hundred than five thousand, So that gap is closing. We're

getting to price parity to where we wouldn't necessarily need the tax credit. And

if someone says, okay, two comparable vehicles and one's ICE and one's EV, I'm going to go to the EV. You know, as long as

the price is the same. Right now, the price isn't the same,

and so you need that government support to kind of get people over the hump, particularly the buyers today, because again they're not going to go out and spend more for something that they perceive as uncertain or less or whatever. Kaj,

what do you think would happen with this twenty five thousand dollars car that Tesla's been talking about, and Ford's got this skunk works programmed to do the same sort of thing, and Toyota's got this BEV factory that presumably is doing something similar. Is that going to move the needle? Because you know,

my argument is that the general American public is not looking for a small, cheap car. You know what I'm saying is they want a chevy suburban sized

vehicle that goes four hundred miles, charges in five minutes, burns rubber across the intersection, and cost twenty five thousands. Yeah, I mean, I

think it ultimately is going to depend on the product, right, So you know, all things being equal, if the cost is less, it's going to sell well. But to your point, if it's you know, a

compact hatchback, I might buy one because I'm a weirdo. But you know

that's not the that's not the car buying public, right, And we've seen time and time again that a compelling product is really important for buyers. So

you've got to get the price right, but you've got to get the styling and the form factor right. You got to get the practicality, the range,

the charging speed, it's all of the above. It's not pick one

and exclude the others. I mean, my comment when when Rivian unveiled the

R two, assuming that they can actually get to production and you know, stay around that long as we were talking before the show, is that you know, if they can get that thing to production, they're going to sell a ton of those. As it is a compelling mid sized suv and it's

coming in at a price point that's lower than the average new car transaction.

They're gonna mint money with that thing. So that's what we need to be

doing, is really good product at a good price point. So maybe this

is outside what you guys do, but you know this, this brings up the point. You know, you have companies like Rivian, and you know

we're hearing that Fisker is giving financial problems loose, it's having financial prompts.

So the consumers feel more comfortable buying a Lightning or or buying a Silverado EV because they come from General Motors and Ford than they do from a startup company.

And we'll take again generally, so when we ask people where they would prefer to buy an EV from looking at the market in its entirety, a majority say that they'd prefer to buy from an established OEM. A forward to

you know, Stilantis whoever, and there's a handful of say that they prefer to buy from a specialist EV. And then there's you know, a bunch

of people that are kind of like, I don't really care. Right,

that does swing a little bit more towards preferring the EV specialist the closer you get towards EV ownership. So EV owners they're more likely to say that they'd

prefer the EV specialist. Still prefer an established OEM at higher rate. Bless

you think EV and tenders, they're a little bit less likely than EV owners.

So there's kind of more openness for newer brands among people the closer that they get, but again, the majority prefer to get it from established brands.

That being said, again it comes back to the product, right, So if someone comes to market with something that's compelling, which Tesla has done, right, that is a compelling vehicle, and people will kind of get over there, well, I'd prefer to buy it from you know, a GM and say this is just better. Right, I'd like to go back

to what you said about Rivian hitting the sweet spot on the market because Jim Farley has said, we don't want to do a two road crossover. That

segment is so jam packed, we'd rather go elsewhere it is. But that's

where most of the buyers are is they want to buy a compact or mid sized suv, and there are some EV products in that space, some better than others. But you know, that's one of the segments where you can

compete for share, you know, truck buyers. You know, there are

fewer truck intenders, even though the truck segment you know, does quite a bit of volume. It's that suv space where you've got a lot of opportunity.

The other area that there's opportunity that we have not seen product is in a mainstream large car, so I think like a Chevy and policized vehicle.

There's really not anything there, and there's a decent chunk of buyers that are interested in EV's in that space, even more so than the non existent market in the ICE. I mean, I think, you know, if you're

putting your bets on things, that's it's the SUVs and crossovers, right.

But you know, when we start going down the list, the one that's really missing the product is is that large car segment so the white space as they talk about in exactly yes, So we keep talking Tesla is that eight hundred pound grill? And it's come up so many times it's sort of we

expect it. It's the benchmark in so many ways, there has to be

vulnerability. What are you seeing that if if Elon Musk didn't buy his own

hype but actually started looking at stuff that could be scary, what would he what would he find in terms of things that should things that should he should be looking at, and things that should downright scare, Well, boy, he should be looking in the mirror first and foremost. I mean we have

seen you know, when we look at people, Elon Musk turns them off from Tesla, right, yeah, And and it was really interest because we look at We talked earlier about kind of the political leanings of car buyers and kind of how they think of evs. What we saw when Elon Musk started

being very vocal politically is that conservatives liked him a lot more, but they were no more likely than they were a year before to be interested in ev So, yeah, he got pats on the back, but he wasn't growing the market, whereas liberals were more likely to be interested in buying an EV and they liked him less, and we're less likely to buy a Tesla.

Right, So looking in the mirror is one thing that brand images is key.

I think the other piece is around the product, right. So they've

got really good product, but it's also old product. Right, So as

you have vehicles like the Ionic six entering the market or the R two if it makes it to market and people say, Okay, I've gotten a credible alternative to Tesla here, I think we're going to see a shift away from Tesla. So those would be the two things that I'd point them towards it.

And Casey, when you say it's old product, you're really talking styling because Tesla updates. It's it's vehicles, not just with over the air updates.

They have running changes where they keep updating it. And so we had

Larry Burns here on the show who used to run R and D at General Motors, and what he's pushing for is get the industry back to being a fashion industry. And I wonder if that's what you're identifying here, is that

is Tesla's weakness, is that there are a lot of other competitors coming now with really good styling, you know, head turning styling. Yeah, and

as you know, one stylist on and stole me a long time ago, is he says, of course styling matters. If people don't even notice your

car, how do they know they want to buy it? Yeah? Well,

you look at something like, you know, the Model X, which has been out for forever, right, and then you look at the EV nine, and the EV nine looks fresh, right, it stands out in a way that a Model X just simply doesn't. Right. So yeah,

I mean, be careful how you say that, because the Model X in Michigan is still a standout product in California. It's like, so what they're

everywhere fair enough, right, different parts of the country, North Dakota, different situation than Texas, And yeah, no, totally fair point. But

but yeah, I mean, I think when you look at at the buyers again, it comes down to having compelling product. There is sort of a

desire to buy from an established OEM, and so Tesla isn't Tesla is the default ev it is not necessarily the default car. And so if you're looking

for, you know, a good car and you're considering an EV and you find something in a Hondai showroom or you know, a Chevy showroom, or you know wherever, then you're likely to consider that in a way that you may not with Tesla. Hey, look we're gonna have to wrap it up.

But Casey, it's been fantastic avenue on the show. This is.

This has been a terrific discussion here and really good information. Thank you,

John, Dad and Paul. Thanks for coming on the show with us.

A great show. I enjoy this. And then Gary, we'll do another

show next week and we'll talk about extended range. We will, Okay,

I want to thank all of you for having tuned in out online. After

Hours is brought to you by bridge Stone Tires Solutions for your Journey

AAH #686 - Who Will and Who Won't Buy EVs

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