Dan Neil is the automotive columnist for the Wall Street Journal and one of the funniest writers around. He also has one of the best jobs on the planet as one after another car manufacturer delivers cool test cars to his house and lets him "drive them like he stole them" for a week. He makes a compelling case that the two main knocks on electric vehicles (EVs)–their cost and range– will diminish rapidly over time. He writes
When commercial batteries attain specific energy levels on the order of 500 watt-hours/kg, and when pack-level costs level off around $50/kWh—within a decade—mass-market EVs will be capable of 700+ miles between charges and cost less to build than gas-powered equivalents. With that kind of energy onboard you could make cars fly—and houses and restaurants. Gas-electric technology will become as irrelevant as quadraphonic sound.
Sounds good, but what about the dealers? A WSJ article notes
As auto executives and investors buzz about the coming of age of the electric car, many dealers say they are struggling to square that enthusiasm with the reality today on new-car sales lots, where last year battery-powered vehicles made up fewer than 2% of U.S. auto sales. Most consumers who come to showrooms aren’t shopping for electric cars, and with gasoline prices relatively low, even hybrid models can be a tough sell, dealers and industry analysts say.
Tesla Inc.’s influence on the electric-car market has created a new standard for car shoppers, offering an online transaction and a simplified lineup with no price negotiation. Other electric-vehicle startups, like Rivian Automotive and Lucid Motors, say they’ll likewise sell directly to consumers and bypass traditional dealerships. Some car companies are now following their lead, initially stocking dealership lots with few if any electric models and allowing customers to order more directly from the manufacturer.
Adding to the dealer uncertainty
Electric vehicles typically have fewer mechanical parts and don’t require the same type of service that gas engine cars need, such as oil changes. That work right now is a big profit center for dealerships.
Why do I care here at the Voice? Auto Row has been a signature feature of Burlingame since, well, there have been dealerships. My 1939 directory lists 27 Auto Agencies – New and Used including Nash, LaSalle, Packard, De Soto, Hudson and Terraplane dealers. Autos and Transportation is our number one sales tax revenue source at $1.2M in 2Q19. That dropped to $800K in 2Q20 as Covid took effect. It's one thing to dedicate eight off-Broadway parking spaces to EVs that seldom show up for a charge. It's another thing to see a major revenue source get whacked. We have a Tesla showroom in town, but I'm not sure if they "make the sale" in B'game or on-line. This is a very long term trend, but one that bears watching just like the hoped-for recovery in hotel occupancy and ToT.
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