AD #3301 – Honda Plans EV Onslaught; High Gas Prices Drive Consumers to EVs; GM & Ford Secure Battery Materials
April 12th, 2022 at 11:56am
Listen to “AD #3301 – Honda Plans EV Onslaught; High Gas Prices Drive Consumers to EVs; GM and Ford Secure Battery Materials” on Spreaker.
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Runtime: 9:30
0:07 High Gas Prices Drive Consumers to EVs
1:04 U.S. Gas Prices Starting to Ease
1:36 U.S. to Extend E15 Fuel
2:08 Lawsuit Against EPA Backfires
3:29 Honda Plans EV Onslaught
5:17 GM Signs Deal for Cobalt
5:35 Ford Signs Lithium Deal
6:16 Toyota Readies bZ4X Launch
7:40 Nissan Gives Leaf a Slight Refresh
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HIGH GAS PRICES DRIVE CONSUMERS TO EVs
We sort of thought this was happening but now we’ve got the proof. Soaring gasoline prices are getting more people interested in electric vehicles. TrueCar is measuring significantly more activity on its car-shopping website. Shoppers looking at EVs shot up 380% in March compared to a year ago. Interest in hybrids was up 180%. TrueCar did a survey in the U.S. and found that 57% of respondents are more likely to buy an EV because of higher gas prices. One out of five said they are “extremely likely” to buy an EV. That’s a 50% jump from July of 2021. Men are more likely to buy an EV than women, 59% vs. 45%, but the gap is narrowing. And people in their twenties are the most likely to consider buying an EV.
U.S. GAS PRICES STARTING TO EASE
Even so, gas prices are starting to come down. Prices shot up to more than $4.30 a gallon after Russia’s invasion of Ukraine. And while they’re still high, they’ve now dropped to $4.11 a gallon on average in the U.S. That’s 22 cents lower than at the beginning of March, according to AAA. At least one analyst says prices could drop to $3.50 to $4 a gallon by Memorial Day.
U.S. TO EXTEND E15 FUEL
And to help ease gas prices even further, the Biden Administration will extend the availability of E15, gasoline with 15% ethanol, until September 15th. That should help stretch out supplies of gasoline. Ethanol has less energy than gasoline, but it also has a much higher octane rating and burns cleaner. The EPA is considering making E15 fuel available year round, which could help lower gasoline prices.
LAWSUIT AGAINST EPA BACKFIRES
Well, this took some guts. A couple of Chinese companies sued the Environmental Protection Agency when it blocked them from selling motorcycles and recreational vehicles because they used substandard catalytic converters. Taotao and the Jinyun County Xiangyuan Industry Company sold nearly 110,000 motorcycles and RVs in the U.S. with catalytic converters that didn’t meet certification requirements. They sued the EPA to prevent it from enforcing laws that protect the public’s health, but a judge just ruled in favor of the EPA, and the EPA fined both companies more than $1.6 million.
HONDA PLANS EV ONSLAUGHT
Honda is making up for lost time when it comes to EVs. Now it’s putting its money where its mouth is. It’s going to spend $64 billion or nearly 59 billion euros on R&D over the next 10 years. The majority of that will go towards electrification and software development. By 2030 Honda plans to launch 30 EV models globally, which would represent production of 2 million units a year. As we’ve reported and you likely know, some of those EVs will come from its partnership with GM. Two electric SUVs, one for Honda and one for Acura, launch in 2024, which is followed by more affordable EVs in 2027. To power those EVs, Honda is buying Ultium batteries from GM, but is also developing solid-state batteries that will hit the market after 2025 and is considering a joint venture for battery production. But surprisingly, Honda makes absolutely no mention of Sony, which it announced an EV alliance with in March. It does talk about a Honda e: Architecture that combines both hardware and software and we think it’s possible this is what’s being co-developed with Sony. But Honda won’t start adopting the platform until 2026 and the vehicles from the Honda and Sony joint venture were supposed to go on sale in 2025. So, this is something we’ll have to keep an eye on. But moving ahead, Honda also plans to introduce EVs for commercial use as well as mini-EVs and even a couple of sports cars. And one sure looks like a future-gen NSX to us.
GM SIGNS DEAL FOR COBALT
General Motors is lining up its own source of raw materials for EV batteries. It announced a multi-year deal with the Swiss-based company, Glencore, to get all the cobalt it needs. The cobalt, which comes from Australia, will be used in the cathodes of GM’s Ultium batteries.
FORD SIGNS LITHIUM DEAL
Along the same lines, Ford signed up with Lake Resources to get the lithium it needs from a facility in Argentina. The mining site is under development now, will cost $540 million to build and won’t be open until 2024. But once it’s up and running, Ford plans to get up to 25,000 tons of lithium a year.
TOYOTA READIES bZ4X FOR LAUNCH
Toyota released more details on its bZ4X electric crossover. And here are the basics. There are two trim levels, XLE and Limited. The base price is just over $42,000, not including destination charges, and range is 252 miles. That’s for the front-drive version. The all-wheel-drive version starts at $45,300 and has 228 miles of range. Both of them have 201 horsepower, with the front-drive version going 0 to 60 mph in 7.1 seconds, while the all wheel drive one does it in 6.5 seconds. You get three years of free connectivity services including voice-activated audio and HVAC controls as well as navigation. And you get a 1-year trial for things like roadside assistance, automatic collision notification and stolen vehicle locator. The bZ4X also comes with Toyota’s suite of safety systems, which are enhanced with a better radar and camera. To give you an idea of its size, it’s slightly longer and lower than a RAV4, and it’s about to go on sale very soon in the U.S. market. Click on the link in today’s transcript or in the description box if you’d like to get more details.
NISSAN GIVES LEAF A SLIGHT REFRESH
The Nissan Leaf is getting a slight refresh for the 2023 model year. Most notably it features an updated front end that isn’t as angular as before, which softens the design. The logo on the front is also now illuminated. The shape of the tire deflectors, rear under diffuser and rear spoiler were all modified to improve aerodynamics. The base Leaf S is equipped with a 40-kWh battery while the Leaf SV Plus comes with a 60-kWh one. Nissan didn’t reveal their EPA range but says it will be close to the outgoing model, 149 miles for the S and 215 miles for the SV Plus. Pricing will also be similar to the prior version, $28,425 for the S and $36,425 for the SV Plus. Both prices include destination charges. The refreshed Leaf goes on sale this summer.
We’ve got something of a coup this Thursday on Autoline After Hours. Our guest is GM President Mark Reuss and the topic is all about GM’s EV strategy. So join John and Gary for some of the best insights into the inner workings of the automotive industry from the very people who are making it happen.
But that’s a wrap for today. Thanks for tuning in.
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Comments (43)
April 12th, 2022 at 12:16 pm
Ouch! Didn’t those companies learn from the dieselgate, you don’t mess with the EPA!
April 12th, 2022 at 12:17 pm
Not mentioned wrt the bZ4X (and the Subie lookalike) is its relatively long charging time, especially the AWD version that at best can take close to an hour or more to recharge to 80% capacity. Tesla and other brands do far better in that respect.
April 12th, 2022 at 12:24 pm
Regarding Toyota’s new BEV, it just seems to have been an after thought and thrown together rather quickly! The range, horsepower and styling are truly unimpressive. For years Toyota’s mainstream products have been thought of as electric appliances, with no character and feel and this EV seems to fit that model and live up to that persona with easy and without question!
April 12th, 2022 at 12:37 pm
…what is sad is that Toyota was the breakout star with electrification through their hybrid tech. Yet, on the EV side, they seem to be near the last of the legacy OEMs and just putting out ‘also-ran’ and ‘me too BEV product! I know that they can do better, I just can’t wait to see the do so.
April 12th, 2022 at 12:58 pm
On Truecars survey about EVs and gas prices, not to pick on the folks in their 20′s but they are probably more likely to buy an EV because when just starting out gas prices will affect them the most. Also they probably haven’t done a true cost comparision and realize they may never recoup the extra cost of the EV in gas savings.
April 12th, 2022 at 1:01 pm
Toyota has never been much for styling, but I buy their hybrids anyway, because of how well they work. If buying an EV, I doubt if the Toyota would be high on my shopping list.
The Leaf doesn’t seem a very good value, at $36,425 for the 215 mile version, but it’s still eligible for the $7500 tax credit a little longer. The Bolt is ~$4K cheaper, and has more range, but is no longer eligible for the tax credit.
April 12th, 2022 at 1:04 pm
5 Maybe the 20-somes also care about the environment, and consider EVs better than gas cars in the regard. Yeah, that is still a matter of discussion, when considering the entire life cycle of the cars.
April 12th, 2022 at 1:05 pm
Smart, use corn for fuel and with more ethanol in the gasoline the mileage drops a little, so we can stop and fill up more often it makes me wonder if we use more fuel won’t we be paying more in gasoline taxes? And what about older vehicles that won’t run well on E15 ?
April 12th, 2022 at 1:06 pm
I have read a few first impressions of the Toyota bz4x. Very average car. But they will be great sellers because they are Toyotas. The EV transportation for the masses.
I also read they were going to make all of 13,000 the first year. How excited can one get about a car company that does this?
April 12th, 2022 at 1:12 pm
5 We’ve been looking to see what our options for new vehicles are, and have done the math. For the models we are interested in, the “break-even” point is about 6 years. That is only based on current gas prices, and does not include the difference in maintenance costs. As Kit said, younger people care more about the environment in general, and I would guess are more likely to plan on keeping a vehicle “til the wheels fall off”, in which case they will definitely get the return on their investment.
April 12th, 2022 at 1:17 pm
how many 20 year olds have $50K to buy an EV
April 12th, 2022 at 1:22 pm
4 Toyota is “behind the curve” in EVs, but maybe they are waiting for things to become more clear, as far as what the EV market will look like when it is more than 4% in the US, and 8-9% globally. We don’t yet know what the market will be for electric pickup trucks. I know a lot have people with pickup trucks, but few seem to be clamoring for electric ones. I would expect small-mid size “crossovers” to dominate the EV market as it matures, but will pickup trucks continue to have 20% US market share as EVs replace ICE vehicles? I wouldn’t bet on it.
April 12th, 2022 at 1:32 pm
11 Eleven percent of US new car sales were to 25-34 year olds in 2017. 25 and younger was only 3%. Probably a lot of those 32-34s are college grad professionals, who have good income, but I suspect most of those vehicles are bought with borrowed money.
https://www.statista.com/chart/20048/us-buyers-of-new-car-by-age-group/
April 12th, 2022 at 1:40 pm
@12 Kit. I agree. And the 8-9% global figure is only because some countries thing the right thing to do is to ban ICE cars. EV’s are for families that have more than 1 car. The EV makes sense only as a commuter or local car, to me any way. I could own one, but not as an “only” car, and I have home charging available and no cold weather to deal with. Most Japanese car manufactures are being very cautious and practical at this point.
April 12th, 2022 at 1:52 pm
15% ethanol will kill many lawn products (mowers, leaf blowers, chain saws) and snowblowers.
With respect to Toyota lagging in the EV market, I suspect they are “keeping their powder dry” until battery technology and infrastructure better mature. Remember, they already committed a large chunk of “powder” on fuel cells.
April 12th, 2022 at 1:53 pm
gas prices in my area were about 350 a gallon before the war, and they are coming down now because a large part of china is on strict lockdown
April 12th, 2022 at 2:04 pm
10 Do you think they can keep the EV until the wheels fall off, or until it needs a new very expensive battery? It will be very telling in the next couple years to see what the resale of a 10+ year old EV ends up being.
Oh and I really don’t think the Tesla model S is a good indicator. That has a cult following and used EVs are rare which has kept the price up on those. Wait until your average Leaf or Bolt is 10 years old and see how they fair.
April 12th, 2022 at 2:10 pm
15 I hope the E-15 is clearly labeled, because I wouldn’t want to use it in my 45 year old lawn tractor, even though it is ok with E-10. I doubt if I should use E-15 in my 33 year old van either.
Even for my newer cars, I’d want E-15 to be about 6-7 cents/gallon cheaper than E-10, to compensate for the ~1.5% lower mpg.
April 12th, 2022 at 2:16 pm
16 I suspect there will be a market in used batteries as EVs age, if the vehicles get totaled without the battery being totaled. Also, there will be a market in “rebuilt” batteries, with cells, or groups of cells replaced. Still, it will be a different world from ICE vehicles. I suspect there is no way a 30 year old battery would still work, no matter how few the miles and charge/discharge cycles, but my 33 year old van still runs fine, and has had little repair over its lifetime.
April 12th, 2022 at 2:18 pm
E15 great for displacing oil in the short term for national security issues although more Canadian oil could be let in, the extra corn needed for ethanol will be diverted from food and animal feed, have already started to electrify my small engine fleet since my weed whip which was gas 2 stroke haven’t used in 8 months didn’t start my battery electric one always starts has caused me to use a lot fewer blue words. Also remember when the Prius first came out the replacement battery was going to be $20K now a lot less, and many times can be repaired hence 10 years from now how much will it cost?
April 12th, 2022 at 2:20 pm
@5, 10, 16 fortunately many car buyers do not choose based on a detailed financial analysis. Fortunately, because if not the automotive industry would only sell cheap appliance-type vehicles.
The success of the world’s most successful OEM, TESLA, is based on selling to people who are excited by their products and their mobility experience. All other OEMs make profits on those products that appeal to people, not because they are a few cents cheaper than somebody else’s.
One hot seller in the U.S. market, my daily driver the Jeep Wrangler, must be one of the worst in fuel consumption, one of the most expensive in accessories: my Rubicon EcoDiesel cost $65k for a vehicle with a $30k. If I would have to worry about cost, I would be dumb; if I don’t have to worry about cost, enjoy off-roading and love the look of the vehicle, I am a happy buyer.
April 12th, 2022 at 2:21 pm
@21: I meant @5, 10, 17
April 12th, 2022 at 2:23 pm
@21 wow, I am good at writing today:
for a vehicle with a $30k base price.
April 12th, 2022 at 2:27 pm
17 According to KBB, a 2012 Nissan Leaf with 100K miles has an average private party value of $4753. A same year, same mileage Toyota Corolla, which would have cost much less than the Leaf, is worth $7769 according to KBB.
April 12th, 2022 at 2:35 pm
Tesla does a little better than what some consider to be the competition. A 2013 Tesla S is $24,537 according to KBB, and a Mercedes S550 is $18,006. I’d rather take my chances with the Benz, if it appeared to be well taken care of.
April 12th, 2022 at 2:38 pm
24 Correction: The Corolla is $8349. The $7769 was trade in value, not private party.
April 12th, 2022 at 3:01 pm
21 I know Wrangler drivers who never even go off-road, but just bought them for the way they look, the removable top and doors, and the “image.” Wrangler (and Gladiator) must be really high profit vehicles for the company, especially when loaded with options. So far, it doesn’t look like the arrival of Bronco has hurt Wrangler sales much. 204,610 Wranglers were sold in the US in 2021, one of the best years ever.
April 12th, 2022 at 8:42 pm
#17, 19, 21, 24 and 25.) Very, very interesting points, about used EVs. Individuals who are looking at vehicles that are ten years old or more, are usually first time buyers or someone looking to get a reliable vehicle for their teen aged son or daughter. From personal experience, most when looking to buy used are looking for the best price first for the vehicle they want. If that’s not available or in their price range, their next favorite or they vehicle they could live with! In the case of the Leaf vs the Corolla, as much as one may be in love with the Leaf and like the price advantage, how do you fuel it? If at home, there is the cost of the charger. Ten years ago it may have cost a couple grand to install, but now after all this time, do they still make the charger for this year and, if so, will it cost extra? At a charging station, it may take considerably long to refuel then newer vehicles? That is quite a responsibility for a teen and a first time buyer may see this as a lot if hassle, when the easier to live with Corolla is sitting right next to the Leaf on the used car lot! At six years old, a BEV is still new enough not to be concerned about it being to old to service, but eight years is a different story. With the the next few years looking to be ones of rapid change in the auto industry, buying an 8-10 year old BEV today, may be a little risky! While it may be new to you, it may be really showing its age in a year or two. With the landscape looking to explode with EVs and the need for rare materials on the climb, I wonder if it might be good to put an ‘end of use date’ on EV batteries that are tens old and older? That way they can be recycled and there will always be a supply chain of materials that are difficult to replenish! No need to mine for it, if its already out of the ground.
April 12th, 2022 at 10:38 pm
28 You’d be able to charge a 10 year old Leaf at home with a 240 volt dryer outlet, or a regular 120 volt outlet if you’re not in a hurry. I wouldn’t want to pay even $4700 for the car, though, unless the battery had already been replaced. The battery would definitely be on “borrowed time” if original.
April 13th, 2022 at 4:10 am
Nissan Leaf – Not the best example. It’s the only EV I know of that never got a liquid-cooled (or heated!) battery pack. Which does not preclude its usefulness, but certainly hastens degradation.
While some Model S’s have racked up over 300’000 miles. Let it be said that not all battery chemistries are equal.
April 13th, 2022 at 6:38 am
Anyone stupid enough to use gas prices as the sole reason to buy a EV deserve to get fleeced of their cash. If you already own a car that gets 25 MPG and decide to buy a 50K vehicle need to go back to math and economics class. Even at $5 would be a difference of 10,000 gallons of gas. If your car gets the 25MPG I mentioned would give you a range of 250,000 miles and if you dive the 12,000 mile per year average would take you over 20 years for the price of the car to ever pay for itself over the cost of fuel.
April 13th, 2022 at 8:22 am
12 – Kit – Astute observation of yours, quote: I know a lot have people with pickup trucks, but few seem to be clamoring for electric ones. I would expect small-mid size “crossovers” to dominate the EV market as it matures, but will pickup trucks continue to have 20% US market share as EVs replace ICE vehicles? I wouldn’t bet on it.
April 13th, 2022 at 8:22 am
21,30 While I totally agree that buying a vehicle on economics alone is rare, myself included. I felt that XA351GT stated it best that making the decision to switch to a BEV for economic reasons (gas prices) would likely be foolish. Gas prices fluctuate and with the next administration they could be back to $2.50 a gallon. Or maybe even as soon as this Russian invasion is over. So deciding to spend an extra 25k to get a BEV for something that is likely temporary also seems foolish and makes the math even harder to justify.
But absolutely if you were already considering an EV and this uptick in gas price is enough to sway the final decision then go for it.
My personal buying criteria requires that 1) I like the looks of the vehicle, Thats pretty broad and not so rigid that it determines the vehicle but weeds out the ones I just wouldn’t drive like a Prius or Leaf, 2) It has to meets my needs and preferences like performance, options, price range. 3) Then when I’m down to a few vehicles, things like interior, fuel economy and safety might sway the final decision.
However some purchases are made when you just fall in love with a vehicle like the new C8 I would buy simply because of its looks and performance the other criteria would take a back seat.
April 13th, 2022 at 8:25 am
31 I agree. Maybe those few that buy trucks just for the sake of owning a truck will consider an electric truck but anyone that actually tows or hauls stuff in the bed other than dogs and bikes will probably not want an EV. Guess time will tell.
April 13th, 2022 at 8:29 am
29 The Leaf is the only example I could think of that has been around 10 years. Yeah, maybe others will do better, depreciation-wise when they are 10 years old. Also, charging infrastructure will be better in a few years, and a “battery recycling/rebuilding” business will develop, which should help resale value of EVs.
April 13th, 2022 at 8:35 am
33 EV trucks will definitely not be good for towing anything very big for road trips, with the short range, long charge time with the big batteries, and need to unhitch the trailer to charge.
They would be ok for towing things short distances to work sites. I know someone who tows a Bobcat to local jobs, and probably never drives more than 50 miles in a day. An EV truck, charged overnight, would work for that, and he could set up charging so he would need to unhitch the trailer.
April 13th, 2022 at 8:36 am
35 Typo: so he “wouldn’t” need to unhitch…
April 13th, 2022 at 8:46 am
33 I don’t haul much more than bikes and camping gear on my full sized pickup and I wouldn’t consider an EV. We end up camping in areas that don’t have cell service let alone electric charging stations. Maybe in a decade from now…
April 13th, 2022 at 8:53 am
30) That is the math equation that I am using. My Hybrid gets 38-42MPG so there is no math that favors buying a new EV right now. It literally is a case of making that decision once the wheels fall off this hybrid. By that time battery and charging tech will be better making the cars more useable. They will probably be cheaper.
April 13th, 2022 at 9:09 am
19) I wonder about this as well. I was just watching a person that restores old Model As. I looked at that and wondered if there will be someone restoring 100 year old TESLA model S’s. Where will they find the battery? The old Detroit electrics get restored simply because you can put in newer lead acid batteries that largely haven’t changed over the years and are not structural elements of the Detroit electric EV. That is not the case with battery tech for EVs now. Will someone replicate structural battery cells for a 100 year old Model S?
The indication is the EV1 which is only 32 years old. Nobody makes parts for it. Nobody can reproduce the battery pack for them. There are one or two that you actually see driving on a video but they don’t go more than around the corner, most likely because they can’t go further without a battery replacement. That battery pack is not available nor can it be reproduced inexpensively. So most existing EV1s that missed the crusher just sit and rot as nobody knows what to do with them. Luckily for EV1 owners, the battery pack is not structural so you can possibly rig something up to give some limited range. Such is not the case for a TESLA model S.
April 13th, 2022 at 9:25 am
Ethanol in fuel – Once a year or so I break down & fill my gas cans with no ethanol recreational fuel for garden tractors, chain saws, weed wacker, generator, etc. Costs a few pennies more, however IMO worth it to avoid issues with ethanol fuel messing up carburetors as it sits. In addition to the no ethanol fuel, I also add Marine Sta-bil to the gas cans when filling.
Cars & motorcycle are all fuel injected which is less sensitive to ethanol in fuel.
April 13th, 2022 at 6:51 pm
Good luck for the people going out to get EVs so that they don’t have to pay higher gas prices. We did an analysis, that if you removed one large gas station like Thorton’s (12 to 16 pumps), the electrical distribution system will require an increase in effect as having to deal with 1,200 new homes. And that was done with the least variables. With other options on the variable, it could be a lot more. So if even a small population of the cars on the road went electric, they might not be able to plug in.
April 21st, 2022 at 9:00 am
The bZ4X, which will be produced in Japan and China, is the company’s first EV to be developed using the e-TNGA universal platform developed by Toyota and Subaru.