EV owners going back to gasoline
Having seen the other side, EV owners return to gasoline
I’m sure you have all heard that the world’s automobile fleet going from gasoline (and diesel) to electric is “inevitable” and that one reason we know this, is that people who switch from gasoline to electric aren’t “going back.”
Well, it may be time to re-test this assumption. It had not been sitting well with me for a long while, seeing as I already knew someone who had owned hybrid, plug-in hybrid and BEV vehicles over the last decade and two, but is now back in the gasoline ownership camp.
Then I saw this tweet the other day:
https://twitter.com/AnchorInvestor/status/1773999500350181683?t=2qQ-nioIcrM8042kPTxbOw&s=19
He claims that none of the 30% of his friends who bought BEVs are staying with BEV. They’re all going back to gasoline. I have no idea whether that is true or not, and in my personal observation it is far from 100% of BEV owners who will return to gasoline -- but it’s also nowhere near zero.
The argument by BEV advocates is that the number is zero. Nobody is going back. I concede that I don’t think it’s 100%, or perhaps even 90% or 80% -- but I do think it’s a meaningful percentage. Is it 30%, 50% or 70%? I think it may be somewhere in that wide ballpark. Either way, it’s not zero or anywhere close to zero.
More importantly, it may be as low as 30% or whatever only because of the BEV subsidies -- explicit and imputed (in the car price) -- and other incentives for BEV and against ICE. If there were no such incentives, the number may be well over 70%. I have said for a long time -- over a decade -- that in the absence of BEV incentives of all stripes, the natural rate of BEV adoption is likely closer to 0.1% than 1.0%.
A cause of the BEV growth slowdown
This may explain why the BEV market suddenly stopped growing as quickly as it had before, sometime in 2023 and it looks like, also in 2024 thus far. As the BEV market hit the broader mainstream in 2020 or so, those purchases and leases are now coming back for renewal, so to speak. Owners and lessees are pondering their next vehicle purchase.
This might now have been the case as much before 2020. The BEV market had grown rapidly after 2010 because it started from a base that was so small that it was practically zero. Those buyers were enthusiasts, in many cases buying the new technology for its own sake, because they were tinkerers and into math and measuring all things. Some of us can relate.
Then came the HERTZ catastrophe in 2023 and many more “regular consumers” -- not early adopters -- switching from gasoline to BEV. This forced adoption schedule, driven almost exclusively via subsidies and other incentives, is now what is backfiring hard as we entered 2024.
We knew that this would happen to some degree, at some point. However, we thought of it mostly in terms of it impacting sales of new vehicles only, by people who were driving gasoline simply staying with gasoline -- or going with hybrid or plug-in hybrids instead of BEV. That would have been important enough to change the market.
Yet, what I am describing here represents a layer above such rejection by existing gasoline car owners. Instead, this is an outright boomerang effect of BEV owners “returning home” to gasoline after having tried electricity and they didn’t like it. They are now trading in their BEVs in favor of some form of gasoline vehicle -- regular, hybrid or plug-in hybrid, it doesn’t matter which.
Consumer embarrassment
People who buy BEVs don’t like to admit that they made a mistake. It’s a big purchase, and a visible one at that. They don’t like to talk about it as a mistake.
Rather, you have to rely on revealed preferences. When it comes time to get rid of their BEV, they just do it. No talk, no explanation if possible -- they just do it. It was obviously a painful experience for them, and as a friend, colleague or family member, you don’t want to scratch that open wound. Just let the owner be alone in executing on this retreat from BEV ownership to gasoline. Don’t taunt him or her.
The bottom line is that the BEV subsidy wave is encountering a difficult counterforce: The unwilling consumer, even those who already tried a BEV and are now boomeranging back to gasoline.
One of the reasons seldom talked about, as to why people dislike BEVs: Higher tire replacement cost