Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know as electric vehicles slowly take over the news cycle.
1st Gear: People Just Aren’t Buying Hybrid And Electric Cars
Most U.S. car owners just aren’t buying hybrid and electric cars, and they have good reasons for it. It goes along with the general leasing trend in the U.S. right now, as a lot of owners think it doesn’t make sense to pay off a financed car anymore: If it takes eight years to pay the car off, the technology in it will be older than that keyboard-having Blackberry you still keep in the nightstand.
Bloomberg’s research shows that drivers in the U.S. lease almost 80 percent of EVs and 55 percent of plug-in hybrids, but it’s still a small group we’re looking at—about 1 percent of the global market is electric. From Bloomberg:
The lease rate for the country’s entire fleet hovers around 30 percent. (There’s one blank spot in the data: Tesla does not divulge how many of its vehicles are leased, and since it sells its cars directly rather than through dealerships, the company doesn’t have to.)
The lopsided consumer preference for leases is fueled by the meager demand for battery-powered vehicles on the used market. Partly this is a consequence of public policy meant to spur electric vehicle adoptions: buyers of pre-owned cars can’t grab thousands of dollars in federal and state incentives.
The high lease rate is also fueled by the bet Jablansky and others like him are making that upcoming models will far exceed today’s in value and capabilities.
Bloomberg has a great, in-depth story full of wild statistics and realizations about the ownership of EVs, and you can read the rest of it here.
2nd Gear: People In Norway Are Buying A Lot Of Hybrids And EVs
More hybrids and EVs? Why, yes—in this news roundup and in Norway.
Reuters reports that more than half of new-car registrations in Norway in 2017 were hybrids or EVs, which means people there are really adopting this “electric future” thing we’ve got going. That’s with help of Norway’s generous subsidies and perks for people who go electric, since its parliament hopes to phase out the sales of gas cars by 2025. From Reuters:
Pure electric cars and hybrids, which have both battery power and a diesel or petrol motor, accounted for 52 percent of all new car sales in 2017 in Norway against 40 percent in 2016, the independent Norwegian Road Federation (OFV) said. ...
Norway exempts new electric cars from many taxes and road tolls and owners often get free parking and charging. ...
Last year, the International Energy Agency (IEA) said Norway was far ahead of other nations such as the Netherlands, Sweden, China, France and Britain in electric car sales.
Some roads have even started charging higher tolls for diesel cars, according to Reuters. Diesel sales in Norway fell from 31 percent in 2016 to 23 percent in 2017, while the sales of all-electrics went from 16 to 21 percent across those years.
3rd Gear: Tesla’s Keeping Everyone Guessing On Model 3 Deliveries
Tesla hasn’t said much about the deliveries of its new Model 3, which hundreds of thousands of reservation holders are waiting for. Tesla CEO Elon Musk’s goal in August was to be producing 10,000 Model 3s per week by the first quarter of 2018, but that first-quarter goal dropped to 5,000 per week in November.
The company had a “manufacturing bottleneck” in late 2017 helping lead to that drop, but non-employee deliveries seem to have picked up lately. Tesla’s lack of delivery disclosures still has Wall Street guessing, though.
Bloomberg has some estimates from analysts, which are all over the place:
... the automaker has kept details on Model 3 shipments close to the vest, leaving Wall Street largely in the dark about what fourth-quarter production figures will look like.
As a result, analyst estimates are all over the map. Jeffrey Osborne of Cowen & Co. on Tuesday forecast deliveries of 2,250 Model 3 sedans in the final quarter of 2017, down from his earlier estimate of 9,100. Colin Rusch of Oppenheimer estimates only 800. Manufacturing bottlenecks limited third-quarter deliveries to just 220 cars.
Gene Munster, co-founder of research-driven venture capital firm Loup Ventures, estimates about 2,500 Model 3 deliveries for the quarter but said he remains bullish on the stock long term.
Those guesses sound about as good as all of those answers you dreamed up on free-response college exams after not studying a bit, but hey, they tried.
4th Gear: It’s All About The Dudes At CES
In something that finally isn’t (directly) about hybrids or EVs, the Consumer Electronics Show is in just a few days and it sounds like it’ll be by dudes, for dudes! Automotive News reports that after the Consumer Technology Association, which organizes CES, announced an all-male lineup of keynote speakers for the show, people weren’t exactly thrilled. Understandable!
And what was the excuse for the lack of women? Automotive News reports that the association posted a blog in response, saying there just weren’t enough women to pick from. From Automotive News:
The Consumer Technology Association, the trade association that hosts the conference, has since added a keynote panel and other discussion events that include women, but some say the initial oversight is a symptom of a greater lack of diversity in leadership that could affect the development of new technologies.
On Nov. 9, the association announced the latest addition to the 2018 conference’s keynote lineup, a panel about TV featuring Hulu CEO Randy Freer and Turner CEO John Martin. The executives were joining Intel CEO Brian Krzanich, association President Gary Shapiro, Ford Motor Co. CEO Jim Hackett, Huawei CEO Richard Yu and Lyft President John Zimmer.
The homogeneous lineup sparked pushback from CES attendees, with Twitter announcing its own event within the conference — titled #HereWeAre — featuring only female keynote speakers.
Karen Chupka, a senior vice president at the association, said in the blog quoted by Automotive News that keynote speakers at CES have to be at the president or CEO level of a large entity in the industry.
“As upsetting as it is, there is a limited pool when it comes to women in these positions,” Chupka said.
5th Gear: Hyundai And Kia Think This Will Be A Slow Year For Them
Affiliates Hyundai and Kia set low sales goals for 2018, which Reuters reports is in anticipation of a slow recovery from already low sales. After selling under 7.3 million vehicles in 2017 when their target was about 8.3 million, the companies said their hope for 2018 is a 4-percent sales growth. U.S. sales are expected to be down this year anyway, but Hyundai and Kia have their own problems.
The ongoing tension between South Korea and China has affected production and sales for both companies, as has a lack of SUVs in America. Both companies seem to think it’ll be a gradual upturn from that, too. From Reuters:
Hyundai and smaller affiliate Kia said demand was expected to soften in the U.S. and Chinese markets as they unveiled a combined sales target of 7.55 million vehicles this year, from 7.25 million vehicles last year.
”The market environment is expected to be difficult due to a slowdown in major markets like the U.S. and China, prolonged low growth in the global economy and trade protectionism in major countries,” Hyundai Motor said in a statement.
A lower sales goal than last year? Yikes!
Reverse: An Expensive Fruit Is Born
Apple Inc. was incorporated on Jan. 3, 1977, eventually introducing a popular computer, music device and smartphone. Now the company has a bunch of secretive potential car projects going on, which it never says much about.
But it sure does slow down phones. Happy new year!
Neutral: How Many Model 3s Do You Think Tesla Has Delivered?
Is it 2,500, or 900? Maybe a million? (Probably not.)