Do Customers Really Want Electric Vehicles?

[John Lynch]

Five years later, I think this thread aged pretty well, but I would answer the original question differently now.

Do customers want EVs?

Some absolutely do. Some absolutely should not own one.

To me that is the part the industry keeps trying to turn into a yes-or-no argument when it is really a customer-fit question.

If I have somebody who can charge at home, drives 40 miles a day, rarely takes a 500-mile road trip and likes how an EV drives, it can make a ton of sense.

If somebody lives in an apartment with no reliable charging, drives long distances all the time, tows regularly or does not want to plan charging at all, I am not going to try to talk them into one because somebody decided EVs are the future.

Five years ago we were asking whether people would like the cars once they actually lived with them. I think we have a pretty good answer now. J.D. Power says satisfaction among current BEV owners is at its highest level since they started measuring it, and 96% of new-BEV owners would consider another one.

But EVs were still only around 6% of new-car sales last quarter.

That tells me the product can work really well for the right customer, but it is nowhere near a one-size-fits-all replacement for ICE.

The piece dealers still need to get better at is the conversation before the sale.

Where do you live? Can you charge at home? What is your commute? How often do you road trip? What happens in the winter? What does charging actually cost where you live? Are you leasing or keeping it eight years? What happens if you need to tow?

J.D. Power also found only about one in five EV owners said their dealer gave them any education or advice about home charging.

That one jumped out at me.

We can argue EV versus gas all day, but if we are selling a completely different ownership experience and four out of five customers are leaving without much charging education, that part is on us.

I do not think the job is to convince everyone to buy an EV.

The job is to help the customer figure out whether an EV actually fits their life before we sell them one.

There is certainly a lack of information among those shoppers that are considering EVs and it is an exceptional dealer that can help arm the buyer so that the purchase is a positive experience.

There are a lot of arguments against EV's from 5 years ago and a few still hold but most are outdated. The best remaining reason not to buy an EV is if you cannot level 2 charge at home. That is it. The other ones have dissipated into either being far less important or flipped to the EVs advantage. Perhaps if you are considering non Tesla EV's there are some that are not state of the art but these issues are not a factor with Teslas EVs and that is 1/2+ of the US market.

1. What is your commute? Tesla owners wake up with over 250 miles of range charged at 80%. Few need more range than that. No Tesla has less than 300 miles of range and the model Y (best selling car of any type in the world) has about 350 miles of range.

2. How often do you road trip? Most Tesla owners strongly prefer road tripping in their car above an ICE one. This is where the AV side can really shine. Drive 600 mile roadtrips without one time touching the steering wheel or pedals including short (15min) recharging stops which afford me time to go to the bathroom and get a drink. Arrive without the fatigue of a 600 mile trip at all. Refreshed.

3. Cold weather affects on range? EV's have a reputation for shaving almost 40% off range in very cold weatther. Tesla invented a manifold device called the Octovalve which significantly reduces the negative effect, cutting the reduction in range during cold weather in about half. Coldest day of the year might cut range down to 200 miles if the car sat outside overnight.

4. Cost of charging? This varies across the country but my disounted evening rate is 7 cents/kWh which means I could charge from 0-100% giving me 350 miles of range for about $5.50. Supercharging rates are usual 6-8 times as much making the cost close to gas prices in normal times. I only pay for supercharging after my first 350 miles of a roadtrip.

5. Keeping the car a long time? EV batteries are lasting longer than expected. When the degredation curve flattens is when the EV will thrive. Only 7 moving parts compared to something like 250 on ICE cars sets up a longer lasting lifespan and less depreciation per mile. While the tech is always getting better, the current HW4 computer in Teslas are expected to be sufficient for full autonomy. When they add being able to sell datafrom the car's computer back to Tesla when the car isn't being used, it will further enhance the economics.

Now for the kicker and this is a warning to those who think it is only a decision between ICE and EV..... ICE cars will not just lose out to EVs for EVs sake. They will lose out to autonomous vehicle AV/EVs which is every Tesla that is HW4 and also the ones that are HW3 whose owners paid for FSD in full (no subscription needed). I would encourage every dealer to experience FSD in a HW4 Tesla with V14.3.7 software. Until you do, I have no chance of convincing you that the world is about to change. Tesla is about sold out of their models 3 and Y for the rest of the year, starting to give delivery dates into Q1 of 2027. Yes, the cars are that good but that is not why. People are starting to buy FSD and having to pay for the car that comes with it. Tesla has 1.5 million cars on the road driving around on FSD and the last 2 quarters have seen this number increase by 200k each quarter.

What's a dealer to do to position the business to survive and thrive should EV adoption accellerate? Independent auto dealers are absolutely the best positioned to thrive in the environment that is coming. This starts with being able to understand that Teslas are as much of a computer as they are cars. You need to learn to value the Tesla for what it is and, later, for what it will become. I will take 2-3 dealers and lay out the plan for them and get their feedback, revising and improving that which I can offer to dealers. These first dealers will get my ideas with permission to use them at absolutely no cost, other than the time we spend in discussion (and maybe an NDA). I need to prove out my ideas and get the feedback from the dealers on the ground regarding how to opitimize the plans. Whether you would like to buy and sell Teslas more profitably or would like to have a business within your rooftops that can enhance your profitabilty and reduce the risk of the changes that are coming, I can help.

This is not an effort to sell anything. I am offering what I think is valuable information, in exchange for feedback from a few dealers who are curious, so I might refine and improve my ideas and solutions to roll out a system that will add significant value.


John Lynch, Founder
WattMatters.ai
Engineer, USMA class of 1986
MBA, Finance, NYU Stern School
704-231-9794