Here comes a forecast: the electric vehicle will not replace the vehicle with an internal combustion engine, ICE. The EV will become a supplement, a niche vehicle, but the bulk of our individual transportation will still take place in an ICE-powered vehicle.
You can thank America for this.
We Americans love our automobiles. We have more vehicles per household than most Europeans do, and we generally pay less for the same vehicle. This means, of course, that we can buy ‘more’ vehicle for the same money as Europeans can, but we can also buy much bigger and fancier vehicles than you commonly see on European roads.
One of our big passions—pun intended—is the so-called sport utility vehicle, the SUV. We invented that type of passenger vehicle. The SUV has been around for decades: the Chevrolet Suburban, which better than any other vehicle defines this segment, has been in continuous production since 1935 and is currently the longest+living automotive nameplate in the world.
America also invented the pick-up truck as we know it today. The Ford F-150, which first rolled off the assembly line in 1948, continues to top the sales charts. We buy more Ford F-series trucks than any other vehicle.
For those of us who don’t like Ford, there are tempting alternatives. three out of the four best-selling vehicles in America are pick-up trucks, with the Chevy Silverado in third place and the Ram 1500 in 4th.
In total, U.S. auto buyers purchase almost one million light-truck vehicles every month. This includes both pick-up trucks and SUVs. Not all of these are of the impressive full size of the examples given above; there are mid-size versions of both SUVs and pick-up trucks that perform very well. But for reasons that are hard to explain to someone who has not owned a full-size SUV or pick-up truck, we continue to favor large, opulently equipped vehicles, often powered by V8s.
But wait—weren’t these behemoths supposed to go away because they destroy the planet? Were we not supposed to cram ourselves into computers on wheels by now?
If you listen to what is coming from the left side of the political spectrum, the answer is unequivocally ‘yes.’ So why do the big manufacturers keep churning out these vehicles?
The answer is simple: we Americans love them, and we are not going to give them up. That love comes from both sides of the auto market. We buyers appreciate full-size light trucks, whether SUVs or pick-ups, because they are fast, comfortable, safe, and roomy. They can tow and haul impressive loads. Having owned two pick-up trucks myself, I can testify to the incredible versatility that these vehicles provide. Three family moves, two of which included long drives across multiple states, were neatly executed at moderate cost, without the reliance on a moving company.
Light trucks also boast all-weather prowess at a level that few regular passenger cars can match.
From the car manufacturer’s viewpoint, full-size light trucks are indispensable because of their profit margins. Without having the numbers in front of me, I would bet that there are no mass-market passenger vehicles sold on this planet that make as much money for their manufacturers as SUVs and pick-up trucks do.
Back in July, Reuters reported that General Motors makes an average of $10,678 on every light truck it sells. It is reasonable to estimate that other manufacturers of similar vehicles make approximately the same profits.
These profit margins are incredible incentives for manufacturers to build more of these vehicles. In fact, this past summer General Motors announced that it is going to continue to build its big, V8-powered, full-size SUVs through at least 2035. This makes perfect sense, especially since they already know very well how to sell as many of these vehicles as they can, and do so at carefully stacked price points—which is exactly how they can pocket an average, pre-tax profit of more than $10,000 on each of these vehicles.
To use GM as an example, the entry-level Chevy Suburban comes with a sticker price of $57,200, but when equipped with the larger V8 engines offered, and with a whole range of practical and opulent extras, the buyer can easily dole out $90,000 for it. When the Suburban is sold as a GMC Yukon XL and loaded up with all available extras, it sells for more than $100,000.
Not to mention the Cadillac Escalade: in its most lavish outfit it rings up at $120,000. That is more than the starting price of a Mercedes S-class.
The neat part of this line-up is that all these models all share the same ‘bones.’ The extra equipment that merits the higher prices of a Yukon or an Escalade over a Suburban obviously costs money, but thanks to them sharing the body-on-frame structure, powertrains, and other components, General Motors can secure solid profits from these vehicles. They can then, for example, cash in a lot more than the $10,000 as profit on the Escalade.
The intangible cachet of driving a ‘blingmobile’ accounts for a good part of the 110% markup on the top-line Escalade over the entry-level Suburban.
Ford has a similar strategy, selling its pedestrian Expedition SUV as the Lincoln Navigator for a handsome extra profit. Japanese manufacturers do the same:
- Nissan sells both the Armada and the much-costlier clone Infiniti QX80;
- Toyota has for decades offered a whole range of gussied-up Camrys, 4Runners, and Land Cruisers under the Lexus moniker.
The model strategies that make these SUVs so profitable are applied to pick-up trucks as well. The cheap work truck models that sell in large volumes to small businesses are also the skeletons for much costlier models, often selling at twice the price. There are even luxury versions of these pick-up trucks; if you want a luxurious Toyota Tundra, you can go for the Limited for $52,000—or you can dole out another $27,000 and get the Capstone version.
Big SUVs and pick-up trucks are the geese that lay golden eggs for car manufacturers. This is why they, absurdly, are indispensable in allowing for the so-called transition to an all-electric automotive future. General Motors, Ford, Stellantis (which owns Chrysler), Toyota, and other manufacturers need their profit machines rolling off the assembly lines at hefty profits, or the EV transition is in jeopardy.
Electric vehicles are more expensive to build than comparable vehicles with internal combustion engines, ICEs. Ford offers an excellent example: they make good money on their traditional F-150s, but they actually lose money on building EVs. According to one recent report, the loss amounted to $36,000 per EV.
If we assume that this is an average number, we can apply it to the F-150 Lightning, a fully electric version of Ford’s incredibly successful truck. Let us also assume that Ford, like GM, makes $10,000 on every light truck it sells. This means that every EV that Ford sells and loses $36,000 on, gobbles up the entire profit from three ICE-powered light trucks—and takes away 60% of the profit on a fourth truck.
Needless to say, this is an unsustainable situation, to which Ford has responded by postponing a multi-billion dollar investment in electric vehicles.
We have no reason to believe that GM or other major auto manufacturers on the U.S. market are doing any better with their EVs than Ford does. Therefore, when politicians, whose vision is blurred by green fog, continue to push for the transition from ICE vehicles to EVs, they are jeopardizing the very future of the auto industry.
There may be those on the fringe left who do not care much for major corporations like Ford, Toyota, Honda, or GM. It is entirely possible that they would like to see those corporations go out of business. However, for common-sense-minded people, the problem reaches much farther than to ideological forums on social media.
This is a matter of preserving an essential part of our free society.
Americans, free-minded as always, are taking the lead globally in revolting against the encroachment on economic and individual liberty that comes with the EV transition. This encroachment is primarily financial in nature. Electric vehicles are for the most part unaffordable to people who live on ‘normal’ wages and salaries. Nobody is entitled to a car, but everybody has the right to access a free market and, to the best of his ability, satisfy his needs and wants. This includes the passenger-vehicle market, where we go to satisfy our need to be mobile.
With government regulations pushing the auto market in the direction of electrification, government is also slowly pricing personal mobility out of affordability for the large majority of Americans.
As a case in point, last year The Hill reported that “the average price for an electric vehicle was about $18,000 more than the average price for cars generally” while EV buyers could only expect to save $6-10,000 in fuel costs over the course of their EV’s life. In other words, the electric vehicle is a losing proposition even for the lucky few who can afford the extra $18,000 upfront.
We can pile on more exceptional costs associated with EV ownership. It is well known that EVs consume their tires much faster than ICE-powered vehicles. The reason is a combination of weight—those battery packs weigh considerably more than a traditional ICE powertrain—and the instant torque that an EV produces. The last point is essential: it means that EVs ‘speed off’ from red lights and other stops much faster than comparable ICE cars, but also by forcing their tires from a standstill to speed with notably more violence.
In a manner of speaking, all EVs ‘smoke’ their tires in ways that very few ICE vehicles do. A recent article in the Swedish daily Expressen found that EVs can come with tire costs that are up to 900% higher than for equivalent ICE cars.
Then we have the problem with range. Car buyers are skeptical, to say the least, of EVs because of their limited range. The range varies with weather, with cold winter weather significantly short-changing the EV owner who was planning a long trip. The EV also consumes more energy per mile on the highway than it does in the city—the exact opposite of how ICE vehicles work.
With strictly limited charging opportunities, EV owners are confined in the ways they can use their vehicles. When manufacturers try to compensate for all these problems by building extended-range batteries, they actually add more weight to the vehicle—which increases tire costs and shortens the range.
It goes without saying that with both finances and practicality stacked against electric mobility, America will never make the transition from ICE vehicles to EVs. The electric automobile is probably here to stay, but as a supplement to, rather than a replacement for, ICE vehicles.
At best, we may see a future where people own a small, nimble EV to run errands with, and a larger, always reliable ICE vehicle for more complex transportation needs, and for those long multi-state road trips that are embedded in the American DNA.
Sure, it is easy to get frustrated at your full-size truck when it only gets 19 miles per gallon (that would be 12.4 liters per 100 kilometers for you in the metric world). I will also admit that I brag about how my new car, powered by a turbocharged four-cylinder engine, gets 40 mpg (5.9 l/100km) on the highway, even at sustained speeds around 85 mph (135-140km/h). But I would never want to lose the opportunity to buy another one of those full-sizers, if only because they are so durable, so utilitarian—and so unabashedly American.
America Will Save Internal Combustion
Photo: Jonathan Weiss / Shutterstock.com
Here comes a forecast: the electric vehicle will not replace the vehicle with an internal combustion engine, ICE. The EV will become a supplement, a niche vehicle, but the bulk of our individual transportation will still take place in an ICE-powered vehicle.
You can thank America for this.
We Americans love our automobiles. We have more vehicles per household than most Europeans do, and we generally pay less for the same vehicle. This means, of course, that we can buy ‘more’ vehicle for the same money as Europeans can, but we can also buy much bigger and fancier vehicles than you commonly see on European roads.
One of our big passions—pun intended—is the so-called sport utility vehicle, the SUV. We invented that type of passenger vehicle. The SUV has been around for decades: the Chevrolet Suburban, which better than any other vehicle defines this segment, has been in continuous production since 1935 and is currently the longest+living automotive nameplate in the world.
America also invented the pick-up truck as we know it today. The Ford F-150, which first rolled off the assembly line in 1948, continues to top the sales charts. We buy more Ford F-series trucks than any other vehicle.
For those of us who don’t like Ford, there are tempting alternatives. three out of the four best-selling vehicles in America are pick-up trucks, with the Chevy Silverado in third place and the Ram 1500 in 4th.
In total, U.S. auto buyers purchase almost one million light-truck vehicles every month. This includes both pick-up trucks and SUVs. Not all of these are of the impressive full size of the examples given above; there are mid-size versions of both SUVs and pick-up trucks that perform very well. But for reasons that are hard to explain to someone who has not owned a full-size SUV or pick-up truck, we continue to favor large, opulently equipped vehicles, often powered by V8s.
But wait—weren’t these behemoths supposed to go away because they destroy the planet? Were we not supposed to cram ourselves into computers on wheels by now?
If you listen to what is coming from the left side of the political spectrum, the answer is unequivocally ‘yes.’ So why do the big manufacturers keep churning out these vehicles?
The answer is simple: we Americans love them, and we are not going to give them up. That love comes from both sides of the auto market. We buyers appreciate full-size light trucks, whether SUVs or pick-ups, because they are fast, comfortable, safe, and roomy. They can tow and haul impressive loads. Having owned two pick-up trucks myself, I can testify to the incredible versatility that these vehicles provide. Three family moves, two of which included long drives across multiple states, were neatly executed at moderate cost, without the reliance on a moving company.
Light trucks also boast all-weather prowess at a level that few regular passenger cars can match.
From the car manufacturer’s viewpoint, full-size light trucks are indispensable because of their profit margins. Without having the numbers in front of me, I would bet that there are no mass-market passenger vehicles sold on this planet that make as much money for their manufacturers as SUVs and pick-up trucks do.
Back in July, Reuters reported that General Motors makes an average of $10,678 on every light truck it sells. It is reasonable to estimate that other manufacturers of similar vehicles make approximately the same profits.
These profit margins are incredible incentives for manufacturers to build more of these vehicles. In fact, this past summer General Motors announced that it is going to continue to build its big, V8-powered, full-size SUVs through at least 2035. This makes perfect sense, especially since they already know very well how to sell as many of these vehicles as they can, and do so at carefully stacked price points—which is exactly how they can pocket an average, pre-tax profit of more than $10,000 on each of these vehicles.
To use GM as an example, the entry-level Chevy Suburban comes with a sticker price of $57,200, but when equipped with the larger V8 engines offered, and with a whole range of practical and opulent extras, the buyer can easily dole out $90,000 for it. When the Suburban is sold as a GMC Yukon XL and loaded up with all available extras, it sells for more than $100,000.
Not to mention the Cadillac Escalade: in its most lavish outfit it rings up at $120,000. That is more than the starting price of a Mercedes S-class.
The neat part of this line-up is that all these models all share the same ‘bones.’ The extra equipment that merits the higher prices of a Yukon or an Escalade over a Suburban obviously costs money, but thanks to them sharing the body-on-frame structure, powertrains, and other components, General Motors can secure solid profits from these vehicles. They can then, for example, cash in a lot more than the $10,000 as profit on the Escalade.
The intangible cachet of driving a ‘blingmobile’ accounts for a good part of the 110% markup on the top-line Escalade over the entry-level Suburban.
Ford has a similar strategy, selling its pedestrian Expedition SUV as the Lincoln Navigator for a handsome extra profit. Japanese manufacturers do the same:
The model strategies that make these SUVs so profitable are applied to pick-up trucks as well. The cheap work truck models that sell in large volumes to small businesses are also the skeletons for much costlier models, often selling at twice the price. There are even luxury versions of these pick-up trucks; if you want a luxurious Toyota Tundra, you can go for the Limited for $52,000—or you can dole out another $27,000 and get the Capstone version.
Big SUVs and pick-up trucks are the geese that lay golden eggs for car manufacturers. This is why they, absurdly, are indispensable in allowing for the so-called transition to an all-electric automotive future. General Motors, Ford, Stellantis (which owns Chrysler), Toyota, and other manufacturers need their profit machines rolling off the assembly lines at hefty profits, or the EV transition is in jeopardy.
Electric vehicles are more expensive to build than comparable vehicles with internal combustion engines, ICEs. Ford offers an excellent example: they make good money on their traditional F-150s, but they actually lose money on building EVs. According to one recent report, the loss amounted to $36,000 per EV.
If we assume that this is an average number, we can apply it to the F-150 Lightning, a fully electric version of Ford’s incredibly successful truck. Let us also assume that Ford, like GM, makes $10,000 on every light truck it sells. This means that every EV that Ford sells and loses $36,000 on, gobbles up the entire profit from three ICE-powered light trucks—and takes away 60% of the profit on a fourth truck.
Needless to say, this is an unsustainable situation, to which Ford has responded by postponing a multi-billion dollar investment in electric vehicles.
We have no reason to believe that GM or other major auto manufacturers on the U.S. market are doing any better with their EVs than Ford does. Therefore, when politicians, whose vision is blurred by green fog, continue to push for the transition from ICE vehicles to EVs, they are jeopardizing the very future of the auto industry.
There may be those on the fringe left who do not care much for major corporations like Ford, Toyota, Honda, or GM. It is entirely possible that they would like to see those corporations go out of business. However, for common-sense-minded people, the problem reaches much farther than to ideological forums on social media.
This is a matter of preserving an essential part of our free society.
Americans, free-minded as always, are taking the lead globally in revolting against the encroachment on economic and individual liberty that comes with the EV transition. This encroachment is primarily financial in nature. Electric vehicles are for the most part unaffordable to people who live on ‘normal’ wages and salaries. Nobody is entitled to a car, but everybody has the right to access a free market and, to the best of his ability, satisfy his needs and wants. This includes the passenger-vehicle market, where we go to satisfy our need to be mobile.
With government regulations pushing the auto market in the direction of electrification, government is also slowly pricing personal mobility out of affordability for the large majority of Americans.
As a case in point, last year The Hill reported that “the average price for an electric vehicle was about $18,000 more than the average price for cars generally” while EV buyers could only expect to save $6-10,000 in fuel costs over the course of their EV’s life. In other words, the electric vehicle is a losing proposition even for the lucky few who can afford the extra $18,000 upfront.
We can pile on more exceptional costs associated with EV ownership. It is well known that EVs consume their tires much faster than ICE-powered vehicles. The reason is a combination of weight—those battery packs weigh considerably more than a traditional ICE powertrain—and the instant torque that an EV produces. The last point is essential: it means that EVs ‘speed off’ from red lights and other stops much faster than comparable ICE cars, but also by forcing their tires from a standstill to speed with notably more violence.
In a manner of speaking, all EVs ‘smoke’ their tires in ways that very few ICE vehicles do. A recent article in the Swedish daily Expressen found that EVs can come with tire costs that are up to 900% higher than for equivalent ICE cars.
Then we have the problem with range. Car buyers are skeptical, to say the least, of EVs because of their limited range. The range varies with weather, with cold winter weather significantly short-changing the EV owner who was planning a long trip. The EV also consumes more energy per mile on the highway than it does in the city—the exact opposite of how ICE vehicles work.
With strictly limited charging opportunities, EV owners are confined in the ways they can use their vehicles. When manufacturers try to compensate for all these problems by building extended-range batteries, they actually add more weight to the vehicle—which increases tire costs and shortens the range.
It goes without saying that with both finances and practicality stacked against electric mobility, America will never make the transition from ICE vehicles to EVs. The electric automobile is probably here to stay, but as a supplement to, rather than a replacement for, ICE vehicles.
At best, we may see a future where people own a small, nimble EV to run errands with, and a larger, always reliable ICE vehicle for more complex transportation needs, and for those long multi-state road trips that are embedded in the American DNA.
Sure, it is easy to get frustrated at your full-size truck when it only gets 19 miles per gallon (that would be 12.4 liters per 100 kilometers for you in the metric world). I will also admit that I brag about how my new car, powered by a turbocharged four-cylinder engine, gets 40 mpg (5.9 l/100km) on the highway, even at sustained speeds around 85 mph (135-140km/h). But I would never want to lose the opportunity to buy another one of those full-sizers, if only because they are so durable, so utilitarian—and so unabashedly American.
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