EV startups from Lucid to Rivian see demand fade, supply chain issues linger
reuters.com
reuters.com
Beautiful cars, targeting the wrong part of the market (luxury sedan), and just not well run.
Went to a sales center this summer and was basically told GFYS. 6-12 months wait, we don't know. No test drives, but if you put in a deposit, maybe you can test drive in the fall before config. Yes, we have a floor model but no you cannot sit in it, let alone even touch it. Again, would you like to place a deposit sir?
Less than 6 months later, by early December, despite reducing targets, and missing those reduced production targets.. they have immediately available inventory?
By EOY 2022 something like 30% of the cars they had ever produced were not yet delivered? LOL.
Right now theres a dozen sitting on their website to "buy now", all in different color combos. I'm sure 100s in inventory to replace those listings as they sell. Reports from show rooms all over the country of people seeing the same cars sitting on the lots. Note Tesla's available inventory generally tells you where the car is, and has a long unique URL that implies strongly that the listing is for a single physical vehicle. The Lucid listings are ambiguous enough to mask there being 10s or 100s of units in that config available. Some of the listings are 2022 model year still!
Insane.
Friends had a similar experience with Toyota - it was impossible to get the exact model and config they wanted (plugin Hybrid) so they settled for a similar model , put a deposit down, and still had to wait 6+ months for delivery.
With a traditional dealer you are dealing essentially with middlemen who inventory vehicles or get order allocations from the manufacturer. Traditional dealers mostly make money on financing/parts/services/etc. If the dealer has no inventory/allocations then they don't really care about you. So they don't want you wasting their time if you are going to go order the car somewhere else. And realistically, you shouldn't care about them.. you have 1000 other places to go buy a Ford.
In the direct sales model, every person in that store works for the manufacturer as well. They are poisoning customers on the brand in its totality rather than just Joe Shmo Ford dealer in town. The stores are all portals to the same national inventory / order queue.
To go from "GFYS" in July to "Please buy our cars" in November/December is inept.
Pre configured cars are either exposition cars, cars registered for a day to move OEM inventory, or dealer inventory, not sold like above. Or they are 6-12 months old and coming from various short term leasing and rental services. This approach makes planning for OEMs a lot easier as well. Oh, and you always pay whatever the ticlet price is,inus negotiated disclunts. Nothing like list price plus, just because the dealer feels like it.
But custom ordering for many cheaper mainstream brands has become kind of pointless. The manufacturers no longer allow picking and choosing individual options and instead roll everything into a couple of large option packages. So, if you want the good sound system then you have to pay for the sunroof as well even if you don't want it.
Many US consumers expect to buy a vehicle off the lot and drive it away that day. Part of that is cultural. But many customers come in to buy because their old car was just wrecked or broken down, so they can't afford to wait months for a replacement.
That has not been my experience at all. I frequently order my new cars when I'm buying a domestic brand. I pay invoice or less. (I did not buy a car during the pandemic mess). The dealer has a guaranteed sale with minimal overhead. I haven't yet had one tell me to go away.
It is not consistent in the US. You can order a car from any of the domestic manufacturers (or European ones, AFAIK). You take what you can get from the Asian manufacturers, when it shows up.
Especially knowing their nearest service center was 100s of miles away, but "coming soon" near me.
Compare this to Hyundai/Kia, where every dealership was staffed by the stereotypical sleazy salesmen trying to charge me $10K over MSRP. They make great cars but lost control over their dealerships.
https://www.frontierford.com/all-inventory/index.htm?composi...
Jim Farley has been CEO since 2020 and hasn't done anything to improve dealerships.
Everybody talks like buying direct from the manufacturer will solve this. I feel like people aren't paying much attention to Tesla. Sure, there isn't a mark-up per se, but they just ratchet the price up as necessary to extract maximum profit. Same as the dealer. The big difference being that the dealer actually has competition for your business but Tesla is the only place you can go to buy a new Tesla.
Walked away and went down the street. Every other dealer was more than happy to go on test drives, even when they had low inventory.
Around the time Kia Stinger GT came out and the hypetrain was pumping at the max (2017-2018), I heard plenty of stories of people being refused Stinger test drives at the dealerships. Most of them had a common theme of the potential buter not "looking right". I.e., too young or not looking like what the dealership employees imagine someone who could afford Kia Stinger would look. Often it was outright refusal, other times it was some bs made up reason, even though it was obvious the cars were used for test drives and were available. Conveniently enough for the dealership, just not for those specific customers.
This is extremely ironic, because the more "premium" the car brand is, the better they treat you at the dealership, even if you clearly cannot afford it at the moment. Here is a personal anecdote.
I went to a BMW dealership once (the most "premium" brand dealership I've ever went to by that point in time), because I was thinking of upgrading my decade+ old Camry. I didn't have money at the time to buy, but that was fine, because I had honestly no idea what car I wanted in any terms other than i wanted it to be "good" and "no larger than a Camry, preferably closer to being Honda Civic-sized". So I scheduled a bunch of test drives at different dealerships to try out a bunch of different cars and see it for myself. Plus, even if I had the money to buy at that time, I knew that a major redesign was coming for BMWs I was looking for in the next few years, and I was going to wait until then regardless. I didn't want to waste anyone's time, so I honestly told all of that to the salesman working with me at the dealership. The experience I got was great, even with all of that info in mind. No aggresive sales tactics, no "we might have a financing option that could work for you" insistence after being told "no" once, suggesting other fun cars to try ("since you aren't planning to buy now anyway, wanna try this cool i8? I know a street about a mile away that is a long stretch with no cameras or cops, and it is usually empty, so we can test out the car there for real."), and in general just providing great service all around (any inventory questions and delivery times were discussed in the most plain and no bs terms). I don't even like BMW cars, but this experience made me strongly consider one in the future and understand why some people swear by brands like Mercedes/Audi/BMW/Porsche/etc., despite some of their cars being pretty questionable and (arguably) not the best bang for the buck.
Disclaimer: I've never owned and still don't own a car from any of the brands mentioned, and neither do I have any relationship with those companies outside of test driving a few of their cars.
The guy was like hey here's the car.. let me run a copy of your ID, here's the keys to the car, take it for a spin and come back in 30min let me know what you think. This was at the same time other EV makers couldn't be bothered to keep a demo car on lot, or if they did wouldn't let you drive/touch/etc. Even let me come back with my wife and take if for an hour out on the highway, etc to test in more conditions.
That describes Towne Ford in Redwood City, CA, including the $10K markup.
Source: https://www.coxautoinc.com/market-insights/volume-is-for-van...
How is this GFYS?
The car you wanted was not on the lot, so you had to factory-order it. That meant a wait. And due to the pandemic-related parts issues, that meant a much longer wait than normal.
Would you have preferred they lie to you, tell you that the car you wanted was just about to arrive, and then string you along for months until it actually did arrive?
(I also ordered a Subaru last year in a high-population area. I had to reserve it in advance, and waited 4 months for it. It's a good thing I did, since that model and trim has been selling immediately as soon as it arrives on the lot: within 250 miles of me, the only available vehicles have been reservations on dealer-orders that were placed by buyers who also placed factory orders.)
Nitpick. You don't factory order a Subaru (or Toyota, or any other Japanese automaker for that matter). You can put your desired specs on a waitlist, however, for when one that matches comes out of the pipe. This is distinct from a domestic manufacturer like GM, where you absolutely can place an order for a car exactly matching your desires, and it will get allocated and produced with your name already on it, configured exactly as you want.
This is distinct from placing a reservation on an already-specced vehicle in the pipeline, which you can still modify with packages (but for which the engine, paint, and internal trim colors are locked). I placed a reservation on a dealer-ordered vehicle which just happened to already be specced the way I would have factory-ordered it.
Got a '22 Impreza Sport Hatchback with no hassle, would easily recommend this dealer again. Seems to be the case on the Impreza forum too, as most owners are buying factory orders from the dealers, with a few saying that the dealer only sells Imprezas thru custom orders.
As for other models, that may be different. My family had no issue with getting a Forester.
Did you know the entire company is really controlled by the king of Saudia Arabia? That's a fun fact buried deep in the investor docs. Perhaps he and the company don't care if it's successful? Maybe they'd even like it to fail.
It can't be your primary car. It might need to travel 500 miles to get service and be gone for weeks. It might never get the ADAS software they claim they have in R&D. It might go bankrupt before your warranty is up. It may go to $0 before you can resale it. Etc.
So buying a neat-o car that can't scale production & service network isn't going to help Apple much.
I don’t know whether Lucid is having issues building or moving their inventory, but my experience of their customer service was 100% satisfactory.
Just one anecdote, of course.
Lucid actually has cars on the road. They're great cars, but at their price point they need more exterior visual flair to match the expectations of the luxury set.
Lucid mistimed the market. By the time their cars were ready, the low interest rates were a distant memory and their target market (highly paid tech workers) had started cutting back on spending due to massive industry layoffs.
Note that Lucid today is basically exactly where Tesla was at this point a decade ago, but Tesla had the benefit of 0% interest rates goosing spending.
I've had friendlier interactions at Porsche dealers.
The same white collar workers that can afford the price of a new EV and have a place to charge it, are doing WFH now; they were also the same people doing daily commutes and paying into public transit which made it cheaper for everyone.
There's alot more to life than commuting to and from work, and public transit needs to account for that.
(shameless plug for people to read Robert Caro's _The Power Broker_)
Higher interest rates for dealers and buyers, decreasing price market adjustments coupled with increasing interest rates on held inventory which aren't selling.
American Car Center went bust last week.
https://www.bloomberg.com/news/articles/2023-02-25/subprime-...
It will be harder to sell EV startup products in a down economy especially if lavish public fund (ie your tax money) subsidizations of purchase are removed.
Looking to go all electric and I’ll wait as long as I can to do so for a reasonable price.
In the mean time looking at electric cargo bikes.
Cash for Clunkers has long been derided for the same reasons. Sure some real lemons got turned in and destroyed, but so did a lot of perfectly serviceable older vehicles. Used car prices are still elevated thanks to that.
Cash 4 Clunkers gave both used cars and new cars a price jump and increased sales, which helped the auto makers to coast along some more. I'm sure no lobbying effort went into that at all.
Heard someone say recently: "we need less cars and we need less car"
For my part my family has two old Toyotas that I can't justify getting rid of until I either get an unexpected windfall or their engines/transmissions give out, and if one got totaled tomorrow our budget would be sub-30k for a replacement.
EV aftermarket is expensive, DRM makes parts picking v difficult, plus few people understand EVs and are scared of being electrocuted.
There are some companies that make aftermarket replacement controllers for motors and stuff, although they are generally performance oriented.
I hope in time more 3rd party repair options open up, due to sheer tenacity or competent right to repair legislation.
The next generation of vehicles are likely to drive away themselves if you haven't made payments and even drive themselves to be crushed.
https://www.thedrive.com/news/future-fords-could-repossess-t...
Then this isn't really an EV problem, it's an industry problem.
https://www.coxautoinc.com/market-insights/kbb-atp-december-...
There are business who buy basic new cars yet (tax law and deprecation makes this a smart move), but otherwise nobody will buy a basic new car: there is always a better deal.
In the 1950s a basic car made a lot of sense as cars did not last as long (without major maintenance - engine rebuilding used to be a lot more common)
If you don't have a car at all there is potential for several hundred thousands more saved. However if you live where this is good transit you are spending several hundred thousand on that: not only do you have to account for fares, but also areas with good transit tend to have both higher taxes and higher rent. Still getting rid of a car is a great idea to save money, and if you can get rid of all you are mostly likely better off (just not by as much as you would think compared to the frugal car owner)
I doubt that would be thr average price if car financing wasn't expanding to much longer lengths than 3-5 years.
When these vehicles stop being only for virtue-signaling and actually made for the masses, I will definitely be getting one.
I am willing to wait but Rivian and the others have lost so much credibility to deliver that I do not even trust a deposit with them.
So I will continue to wait until manufacturers can ship these things as ordered.
If I wanted a dual motor config I'd just have ordered a Ford, which would probably deliver sooner, for less money, and probably better supported in the long run.
So mostly the "drastic" things that have changed are related to motor/battery unknowns.
Adventure pack no longer includes kitchen or tent, etc
They are using BOSCH motors and Samsung batteries. At least until their new dual motor config comes out with their own motors. I'd say this is neither poor or great since these are mostly industry standard options.
Munro has done a very detailed teardown of both the Rivian and the Lightning. The main complaint of the Rivian was that it was overbuilt and they are spending too much money. Otherwise, it's been given very high reviews for quality.
I suppose you could argue that the quad motor config is maybe something other OEMs wouldn't take up for many reasons, but it's not a "Poor" choice. It's resulted in one of the most unique vehicles to ever exist, which was probably a very good brand building strategy. The problem with Rivian now is that they haven't been able to pivot to mass market vehicles quickly enough.
The main issue is both. Communicating constantly is not helpful if you also change everything you say all the time
Cars that mostly met my criteria were Tesla Model Y Long Range and Toyota Camry hybrid. I then proceeded to calculate the cost in fuel($4.40/gallon near me) and in energy($0.35.kwh off-peak thanks PG&E) and the cost to drive Tesla for 1000 miles were within a dollar of the cost for Camry Hybrid to do the same thing.
But Tesla would cost $20k more and a trip SF-LA would mean 2 stops to recharge, whereas Camry Hybrid can do it on a single tank of gas.
So i bought a lightly used 2020 Camry hybrid after expanding my search to about a 500 mile radius using AutoTempest.com which aggregates multiple car marketplaces.
[1] My current car at the time was Volvo XC70 with extremely comfortable seats that Volvo is known for and i wanted to replicate as much of that comfort as I could.
That describes every startup that wasn't founded by an 18yo college dropout.
We ended up purchasing a 23 Chevy Bolt EUV that happened to be sitting on a lot in Omaha while we were passing through. Snagged it for MSRP and I've put almost 5000 miles on it since November. Couldn't be happier with the purchase.
If your pickup trucks start around US$100,000, you have a problem.
The company that really gets this is BYD, in China. They started out making low-end vehicles, and now they make decent mid-range EVs. They passed Tesla in output in mid-2022. So far, they haven't sold into the US, but they do sell in Europe.
1. affordable, nationwide rail networks
2. affordable local public transportation
3. Expansion into walkable cities
4. range extended EVs, or EVs where it's trivial/cheap to get (either rent or buy) a range extender for long distance trips
Taking a train to New York or Chicago is fantastic. If you've never used their transit systems before it may take a bit to get used to them, but you can step off the train and go about your business. When I have Amtrak points to burn, I love taking a "day trip" to Chicago, a thousand miles away. I can arrive at 10am and leave at 9pm, and run out of time before I run out of things to do.
If you take the train into a smaller city, you better hope there is a car rental on whatever bus loop they have.
Out of curiosity, what time do you have to leave to arrive at 10?
#4 – why bother. ICE cars have all the range you need
It would be really cool if you could rent/add battery expansion packs to your EV when you do need them - like a big USB power bank - but we need a lot more standardization in the technology first.
In batteries and charging only Hyundai/Kia is competitive, and that's somewhat by brute force, because their cars aren't as efficient. VW charging speed peaks at half of Tesla's speed. Renault, Nissan and Stellantis charge at 1/3rd or 1/4th of Tesla's speed, and they probably don't even realize how important that speed is. They are so far behind that I don't expect them to survive.
And every legacy manufacturer still sucks at software. I don't mean self-driving stunts, but basics like navigation that includes charging stops accounting for charging speed and availability. They still think they can upsell you $2000 for an Android tablet from 2010.
Somehow I doubt that. Do you have Wh/mi data on various cars to compare?
https://ev-database.org/uk/compare/efficiency-electric-vehic... https://ev-database.org/uk/compare/rapid-charging-electric-v... https://docs.google.com/spreadsheets/d/1V6ucyFGKWuSQzvI8lMzv...
Note that the cars which come close to Tesla in the raw wattage value are usually with less powerful single motor and a smaller battery (lighter).
And I'm including myself here, I'm genuinely surprised that Tesla has managed to survive and even thrive, with insane production growth rates YoY. I genuinely believed it was a hype fueled meme (I still wouldn't touch the stock, though) that would stall the moment they attempt scaling production, but the results are pretty conclusive on that regard.
https://www.thedrive.com/car-reviews/2022-lucid-air-review-p...
That said, they have been making consistent, steady improvements to the software, such that over the past 6ish months it has gotten much, much better (especially since the 2.x update which was vastly more stable and performant). I rarely hit software issues these days.
This also seems like an exploit that could be used to lock someone in or out of their car.
Definitely disagree. I read this blurb in the article, and honestly if I were the author I would have been embarrassed to put that in there. The app and the car give you tons of warnings that the car will be locked while an update is running. It also never starts updates automatically - it's a multi-step process you have to go through in either the app or car.
I posted above that I definitely had issues early on with some of the software, but the fact that the car locks during an update was not one of them, and I've never seen this complaint on the Lucid owners forum.
Is there really no company that specialize in stuff like this?
That being said, several tech companies whose names you'd recognize have attempted to get into the vehicle infotainment space over the years, including Microsoft. But no one has found long-term success in the market (likely for the reasons mentioned above).
It’s kinda sad because it’s a major selling point and everyone would benefit from it not being shit.
But they don't have a history of selling their platforms.
Many cars are basically iPhone accessories, no need to risk that market by making your own car.
I actually went through the experience as a potential customer and bought a similarly priced competitor from a German legacy maker because there was no BS.
It’s not like you selected 73 options and they keep changing them before delivery
It isn't that people want EVs they want truck form factor EVs. And yes, Tesla has failed on providing that.
Personally, I don't care if it can do what I need.
But it is fair to say that acceptance often has a very significant social component (and most engineers ignore this). It's often impossible to gain acceptance of a very new thing in one step (to different), but possible by producing multiple in between points. This is true even if the end thing is much better.
So for other vehicle makers, I would expect them to be smart enough to get to amazing end state in steps instead of trying it all at once
If you look at a map of the best selling vehicle by state and overlay who they voted for in the last few elections it's pretty clear who he needs to cozy up to and win over. I'm not thrilled about it, and it solidifies my choice not to buy a tesla, but it makes business sense to my uneducated eye.
Personally I like my nissan leaf and would like a nice simple plug in hybrid truck, not an electric brodozer.
Second, it already had massive preorder demand from before the Twitter drama. There was no need to ensure demand.
Finally, the market for the cyber truck is going to be all of the people who were conscious about fuel efficiency and wanted a truck before but downgraded to a car/crossover. The cyber truck will not make a dent in any rural truck sales where towing and hauling is common.
I’m even fairly ambivalent to the fact that it has a truck bed. Maybe I’ll carry lumber once a year. I’d rather have a 3rd row of seats.
No self-driving, just four wheels, motor and battery pack with whatever is needed to pass safety and standard regulations.
Edit: am aware that Tesla is opening up their network. I want to wait and see how that works out practically. Are enough of them going to be upgraded to support 3rd party cars to make road trips feasible?
Fisker seems to be aiming its sights a bit lower. I remember walking past their showroom in Bellevue, and oohing and ahhing at the supercars, therein.
I have been using the portable charger that came with my EV, sharing the 30A outlet with my dryer. The only times I've "wasted time waiting for charging" is when I'm on a road trip, and that time was spent in a nearby store doing shopping I've needed to do anyway.
My municipal electrical rate is $0.11/kWh and I've saved a small fortune compared to my old gas vehicle.
Fuel taxes pay for the roads, so who is funding your fuel tax avoidance?
Edit: looks like it does in fact act as the fuel tax for EVs.
[PDF] https://iowadot.gov/mvd/vehicleregistration/Electric-Vehicle...
My town puts a $9/mo fee on my water bill to pay for road improvements. Everyone in town pays in regardless of how much or what they drive. The money is also being spent on sidewalks and bike routes, so non-drivers benefit too.
For you it makes sense. Our residential rate just hit $0.20/kWh, excluding rider and admin fees. Plus higher purchase cost plus several thousand dollars more insurance rates compared to an ICE.
Also, many have mentioned the possibility of charing at work ... good luck with that.
I am in favor of EVs, but infrastructure is not there yet and as said they are still too expensive. Also, given the pace of innovation, I think EVs depreciates faster than Hybrid equivalent.
Frankly even if solar were even with gasoline I'd still prefer solar because I generate it myself. No supply chain issues, refining problems, or oil disruptions can stop me from driving or increase my cost to drive.
If you keep saying "infrastructure is not there" then it will never get there. You need demand to kickstart infrastructure deployment. Maybe infrastructure isn't good where you live but for a lot of people it exists and continues to improve. Lots of parking lots in the bay area have electric charging points now - there were approximately zero just 10 years ago.
Electricity has the benefit of an existing grid everyone is already connected to, large chunks of time when that grid runs at a tiny fraction of its capacity, and really easy capacity upgrade paths that operators already do all the time (eg when an industrial plant expands or a new commercial facility is built).
Let me guess … you have a Tesla…
I will just wait perhaps in the next 5 to 10 years. For now I am happy with my hybrid.
I'm fine with EVs being only 75% of new cars sold for now
So as long as L1 trickle charging is available at home or work, this can be a non-issue for many driving habits.
Or are they just angling to be bought up by the big boys as an exit?
I would be open to them if they would provide a better warranty than the competition
This was all totally planned for by the oil companies pushing for more investment in exurbs and highway construction
However because a subset of rich (and debt insensitive) individuals want a sexy new thing that has marginal ecological benefits at small scale, we had a boom period where excess capital (and unsustainable debt) was being spent to try and push EVs into the market.
When cleaning ladies and burnouts are using EVs because it's as trivial as using a petro-car then I'll grant that the market is working, but as it stands 'The Market" is only given token nod to electric and it's a fashionable thing to do in the US, it's not sustainable the way it is happening.
It's like crypto - people got excited with Musk's sexy vision of the future and so it caused a mania around it. A private company cannot possibly fund this scale of infrastructure development because it requires decades of losing money.
The challenge is that it's in conflict with 100 years of oil-based infrastructure development that still has the same incentives.