On E.V.s, Mercedes-Benz Says Genug!

Tom Finnerty27 Feb, 2024 2 Min Read
The Germans walk it back.

From The Telegraph:

The boss of German car giant Mercedes-Benz has said it will make petrol cars “well into the 2030s” as it watered down its targets for electric vehicle (E.V.) sales. Ola Källenius, the group’s chief executive, said the era when E.V.s would cost the same as an equivalent petrol car was still “many years away.” Mercedes had previously promised that its whole car line-up would be battery powered by 2030, but has since walked back that ambition.

Of course, this can't be described as a shocker. One of the big stories of the past year has been the public's lack of interest in purchasing E.V.s, despite sky-high expectations from business forecasters and government regulators. According to Kelley Blue Book, 7.6 percent of new cars purchased in the U.S. in 2023 were E.V.s. That's an increase from 5.9 percent in 2022, but it far off of the growth curve projections that convinced "green" obsessed governments, like those in Canada and the U.K., to mandate that essentially all new cars be E.V.s in just over a decade.

And even that 1.7 percent increase is deceiving. Digging down into Kelley Blue Book's numbers, it's impossible to miss this trend:

Q4 EV sales increased year over year by 40 percent – a strong result by any measure, except when compared to the growth the industry saw in previous quarters. The market posted a 49 percent gain in Q3, and EV sales were up 52 percent year over year in Q4 2022.

Of course, the price disparity always gets the blame. Part of the reason those multi-year E.V. demand projections were so wrong is because they were complimented by multi-year projections showing E.V. costs falling to parity with traditional, internal combustion (ICE) vehicles. As Mercedes CEO Ola Källenius pointed out in the statement above, it is increasingly clear that that's not going to happen anytime soon. Hence the company's changing course.

But if the cost to buy an E.V. were the only issue, we wouldn't be seeing, for instance, similar struggles in the E.V. rental market. A more likely explanation is that the more visible E.V.s became, and the more exposure regular people had to them, the more their downsides became apparent. On top of the purchase price, there was the cost of operating and maintaining them. The headache of charging them for multiple hours (especially if you don't have a garage), and the anxiety of searching for a charger in a sea of gas stations. And the headline grabbing stories about fires and malfunctions that prevent the driver from stopping the car. And on and on.

Consequently, once prime E.V. buyers -- well-to-do urban and suburbanites with a taste for virtue signaling -- had picked up a pricey Tesla to compliment the gas-guzzling Chevy Suburban they use for their real driving, the market was bound to dry up.

Ah, but such are the entirely predictable results of a top-down, dictatorial economy. It's good to see the auto industry adjusting to that reality.

Tom Finnerty writes from New England and Ontario.

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2 comments on “On E.V.s, Mercedes-Benz Says Genug!”

  1. “It's good to see the auto industry adjusting to that reality.”
    .
    I’m not so sure. Toyota’s CEO, for example, is trying to push hybrid vehicles (in lieu of EVs) using the same top-down, philosopher king, we-know-better-than-thou, command economy premises that informed the EV fiasco. Like EVs, hybrids aren’t the panacea, win-win technology that they’re hyped to be—at least not for every consumer. I owned a hybrid but when the time came to replace it, I had no desire to spend the extra money on an hybrid and suffer the poorer performance in order to get a small improvement in fuel efficiency. I went back to a standard ICE. The market is truth.

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