Why Electric Cars are Failing

In most of America, outside of the huge metropolitan areas, cars are ingrained into the culture.  Every house has a garage, there are gas stations all over the city, even at Walmart.  The fast food places all have drive through windows, and one place even has the old style “Bring the food to the car on skates” service. Many small cities have little or no public transit.

In much of America, a car is a right of passage to Adulthood, while public transit is seen as the transport of losers who can’t earn earn enough to buy a car, or not skillful enough to get a driver’s license.  (Please, I am not promoting or saying this view is right, just documenting it.)

Yes, cars also litter the streets of the big cities, but with the cheap public transit, many of the mega-city residents can go their entire life riding trains and buses, never needing or getting a driver’s license.

“My car is my Freedom!”  Is a common belief. And for many of us it is true. In my case I could get in my car with its 400 mile range and be almost halfway to New York, without filling up, and without using a Taxi, Uber, Airline or other transit.  It would cost me about $125 or so in gas and tolls to get to the Big Apple.  Of course there are the purchase, insurance and maintenance costs, but I am paying those anyway because of my culture.

How much would it cost you to come to Florida from New York City?  The Taxi, or Uber ride to the Airport, the ticket, the baggage fees?  How much if you bring the family?  (My car holds 4 comfortably, and the gas is about the same cost.)

What does this have to do with electric cars?  Well, outside of the big cities most families have at least 2 cars, and those with children over 16 have one for each.  So, everybody buys a car!  Dealers help folks from 16 to 90+ buy cars, and most of the buyers know little about how the car operates.  They look for inexpensive good mileage cars, or nice luxury cars, or pickups, or suv’s.  The sales folks size up the buyers, show them the car’s features, give them a price, and off they go.

Maintenance costs are generally at historic lows, since modern gas cars don’t need tune ups like cars in the past.  For most the only recurring costs are oil changes and tires.  Many dealers sell oil changes as a loss leader to bring in customers who will wander around the car lot while waiting.  Tires are not a dealer item for most car owners, since the prices are usually much cheaper at other places.  For a hybrid car like a Prius, the batteries are only guaranteed for 100-150,000 miles, and cost around $3500 to replace.

Electric cars are more expensive than the average car, and the buyers know that they need to be recharged, yet there are few public charging stations.  The hassle of not being able to just fill up and go is in the mindset of every driver who has ever run out of gas (all of them).  That is why hybrid cars sell ok, since the drivers still feel safe that they will be able to get home without waiting hours for a fill up.

The people willing to purchase pure electric cars are special, a little richer then the average, and a little more sure in their planning ability.   In my talks with car sellers, the reason they give me for not liking to sell electric cars is that the buyers are usually more knowledgeable about the car and selling it becomes like a trivia contest.  The electric car buyer has studied everything about the car, and still drills the seller, to make sure the seller is worthy of the business.  Most gas car buyers don’t do the relatively simple research about how much the car costs the dealer. The electric car buyer knows the cost and the kickbacks and the incentives, so, the dealer has a much harder time making a profit.

Profit is the key.  Electric cars are more expensive and their buyers are tougher to sell too, making less profit for the dealer.  Profit is why there are fewer sales.

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