VEIC

Everyone thought that the US and Europe would electrify our vehicles first and then the developing world would keep buying gas vehicles for a while before electrifying but it looks like it might be the opposite. The cost advantage and overnight charging convenience of small, cheap EVs is starting to make them appealing in places like Brazil, China, India, and Indonesia. The people there are at a very different economic moment and might be upgrading from bikes or scooters into electric bikes and scooters and small EVs. Their gasoline infrastructure isn’t as built-out as ours is and the average length of a journey is shorter. Also, lots of middle-income countries (unlike the US) don’t have much of their own oil. Meanwhile consumers in the US (especially) have a ridiculously high standard of what a new car needs to be able to do (fit eight children and drive 800 miles without stopping and have a motorized lift gate and 25 freaking cameras and keep everyone alive in a head-on collision with a semi) which is just a lot harder to get a cheap EV to do. Also, culture is harder than technology and people will have a culture battle about freaking ANYTHING THEY CAN. Meanwhile American auto makers also make all of their profit in SUVs and trucks, so they don’t want to make cheap little EVs that go 250 miles (even if Americans would buy them). But if you do that, you can make EVs pretty inexpensively so that’s exactly what Chinese companies are doing. As a result, middle-income countries look like they’ll be the ones that drive EV technology and global market share forward. That’s just…not really what folks expected! Very different from how mobile phones happened, for example where middle and low income countries leapfrogged over telephone wires, but not until after rich countries developed the tech for wealthier consumers. EVs will still happen in the US, but new car buyers here are so well-off and picky and we have so many regulations and so much long-distance infrastructure and such high expectations for the fill-up experience that we are going to be the old stodgy dinosaur as the world runs laps around us in this way (and possibly a number of others.) The tech might end up getting pushed forward mostly to serve people in middle-income countries, and then once it’s top-notch and obviously better than any gas car, only then will EVs will take over the last bits of the American market. Not the end of the world (probably), but not great! P.S. I learned about this and had these thoughts listening to this week’s episode of “Shift Key” which is about why China is kicking our ass at EVs. Search for it wherever you get podcasts!