#295: Confessions of a Car Market Data Nerd with Tyson Jominy
Dec 14, 2023
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Tyson Jominy, VP of data and analytics for JD Power, discusses the state of EV sales in the US auto market, the role of charging, the profits in the industry, and the disappearance of affordable cars.
EV sales in the US are not meeting anticipated growth, highlighting the gap between expectations and reality.
Price cuts in the EV market have not resulted in the same volume gains as ICE vehicles, indicating a lack of elasticity.
Improving the charging infrastructure is crucial to encourage EV adoption and should go hand in hand with efforts to incentivize consumers.
Deep dives
EV sales in the US are increasing every month
EVs in the US hit an all-time retail share in September and are expected to set another record by the end of November. However, expectations for EV sales were higher than the actual retail share, and the industry is not meeting the anticipated growth. The challenge lies in the gap between expectations and the reality of EV adoption. While there has been progress, with EVs hitting retail share milestones, the industry still needs to see continuous growth in EV sales to meet long-term expectations.
Challenges with EV prices and volume
The auto industry faces challenges in achieving profitability in the EV market. Price cuts have not resulted in the expected increase in sales volume as seen in ICE vehicles. The industry has taken significant price cuts, but the expected volume gains have not materialized. Price cuts in the EV market have not shown the same elasticity as ICE vehicles. This discrepancy is due to factors such as the lack of charging infrastructure and limitations in adapting to the EV lifestyle, particularly for buyers in lower price ranges.
Importance of charging infrastructure and EV adoption
While EVs are gaining traction, the lack of infrastructure remains a challenge. The focus has been on incentivizing consumers to buy EVs, but not enough attention has been given to improving the charging infrastructure. Charging networks need to be more accessible, reliable, and efficient to encourage EV adoption. The industry needs to address issues such as the compatibility of charging standards and the payment systems to make charging experiences as seamless as possible. The push for EV adoption should go hand in hand with the development of robust and user-friendly charging networks.
Hybrids as an alternative to EVs
Plug-in hybrids are seen as a potential solution for consumers who are not ready to fully transition to EVs. However, automakers face challenges with the manufacturing cost and pricing of plug-in hybrids. They are as expensive to manufacture as EVs but do not fetch the same market prices. This deters automakers from producing plug-in hybrids. Despite their potential benefits, the market has shifted towards EVs due to the emphasis on stock prices and the belief in a quick transition to electric vehicles. As a result, the focus has been on EVs rather than plug-in hybrids.
The disappearance of affordable vehicles
Affordable vehicles have become less prevalent in the market, with transaction prices increasing over a third since pre-COVID levels. It has become harder to find affordable options under $30,000. The industry needs to address the growing demand for affordable vehicles, especially in the compact SUV and mid-SUV segments. These segments account for a significant portion of sales and there is a need for EV options that are competitively priced and appeal to the value-conscious market. The loss of affordability in the auto industry has affected the accessibility of vehicles for younger consumers.
With all the furor over the state of electric vehicle sales in the US, Ed and Kirsten called on Tyson Jominy, VP of data and analytics for JD Power, to find out what exactly is happening with the US auto market. The resulting conversation covers the state of EV sales, the role of charging, the profits that are paying for it all, the not-unrelated disappearance of affordable cars, and more.
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