Future of Travel: Is It Boom or Bust Time for EVs?

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Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. And you're listening to our special three-part series on the future of travel, where we look at the business and tech trends affecting how we make our way through the world. Today, we're talking about automobiles and the EV industry, which we talk a lot about on Pivot. Here to chat with us about the future of EVs is Bea Spiller. Bea is an energy economist and the transportation program director for the Resources for the Future. Welcome, Bea.

Bea Spiller: Thanks so much for having me.

Kara Swisher: So let's talk about the state of the EV industry. Growth rates for sales have slowed, though prices have come down. Ford has scaled back EV expansion plans and Tesla laid off 10% of its global workforce. Is the industry truly slowing or is everything settling out given the boom in the investments made?

Bea Spiller: Well, I try not to be too pessimistic about this situation, right? We are at 9.1% of monthly sales being plug-in electric vehicles, with 80% of those being battery electric vehicles. So I think we're in a great spot. And the issue really is that there's a lot of reasons why we might see, you know, a count like in 2022, we're at 6.8%. Well, that ramped up to 9.3% in 2023, and people are expecting to see a further increase year over year. But I'm not so sure we should expect it to move so quickly. Because what ends up happening is that we start moving into a really different segment of the population who's purchasing these vehicles. We started in the early years with people, environmentalists, who care about the environment and maybe techie. They definitely have garages. Now we're moving into the customers who don't have garages, right? And so they're going to depend upon public charging stations. You have people living in cold weather areas. And what we've seen, well, cold weather really decreases the range of these vehicles. So there's going to be a lot more trepidation on the part of these individuals living in the Midwest and the Northeast to purchase these vehicles. People who have to drive a lot, right? Maybe they're not really willing to go into electric vehicles. And crucially, households who only have one car. What have we seen right now? We've seen a lot of these households, they have a gasoline vehicle and they have their electric vehicle. So they're switching off between the two. But now you're starting to get into people who only have one vehicle. How risky is it for them to move into electric before they really know how these are going to function, where they're going to charge it and such? So I think at this point, we need to start really stepping up issues like education, outreach, getting people to understand how they can use these vehicles and how it would work for them. And we have to start really focusing in on the reliability of the chargers, making sure that they work during the wintertime, making sure that the chargers are price transparent. You show up to a charging station, there's no prices listed. Yeah, yeah. It's a real janky experience still, although it is certainly getting better and you're seeing them in apartment buildings. You're seeing them all over the place. One of my places I go, there used to be two. Now there's dozens. Airport, for example, at DCA and IAD have a stream of chargers down on the end, which made it easier to think, oh, I'll go here, right? This is actually easier. But one of the things that I think about, I have a car, I have a gasoline car, a hybrid car, and then an electric car. We're thinking about going fully electric because it's been easy for us. Obviously, we're a dual-income household, and we're a little more educated on the topic and understand how we actually drive, which isn't very far, right? Isn't particularly far. Scott, what's your question for where we are right now?

Scott Galloway: I'm just curious what you think of BYD and whether or not these tariffs imposed on BYD. Does that considerably slow the adoption of electric?

Bea Spiller: Well, I think to a certain degree, import tariffs are really problematic because they don't force us to have competition, right? It doesn't allow us to have really cheap electric vehicles. But at the same time, even before those tariffs were jacked up, we were not seeing a lot of Chinese vehicles here. We already faced some tariff in imports, but at the same time, they just weren't being sold. So I'm not really sure that the tariffs will have sort of meaningful changes in how many electric vehicles are actually imported since we were already starting with kind of close to zero coming from China. But I think it's a real failure because right now these electric vehicles are expensive. And so we have to be subsidizing them as a country. We have to rely upon the federal tax credits, which are not great. There's a very few percentage of vehicles that actually are eligible for these tax credits because of where the minerals come from and where the batteries are being manufactured. And so, you know, we were trying to pump money at demand rather than saying, hey, how do we actually increase competition? And letting some of these vehicles come in and forcing manufacturers to take a look at, you know, how are they actually going to produce low cost vehicles? is really important because what are the OEMs doing, right? For the most part, they started off with the most expensive vehicles. You've got the Ford Lightning. You've got the Mach. Well, that's what they do. That's what they all do. That's how it typically starts. And they have very high profit margins on those vehicles. And so they are using that to reinvest in their industry. Rather than the inexpensive ones. But when it comes to a lot of electric cars, everyone thinks Tesla. for before. Now there's a lot more when it comes to EVs. Are there other players in the game you think don't get enough attention here in the U.S. that are doing a more competitive job?

Bea Spiller: I actually think what not getting a lot of attention are some of these new charging station companies these startup charging station companies that are working to actually bring revenues into the hands of individuals For example one is called It Electric. And what they do is they work with a homeowner to actually, you know, they identify homeowners who have excess capacity on their electric panel, and they pull the electric cord out into the street. They make an investment into a public charger. And then the homeowner is actually able to get some of the revenues from that. And there's several companies who are looking to do that in multifamily dwellings. And I think those types of solutions are really exciting. And nobody's really talking about that. Everyone always talks about the big national charging stations like Evigo and Tesla. And we're not really thinking about how do we actually bring charging station revenues into the general public. I have a charger at my house and I thought, why don't they borrow my charger in some fashion right on the street? And you've seen some things where the chargers come down from the top of the pole and they drop down and then where you're parking. You plug it in. There's all sorts of innovative ideas. But talk about the supercharger team layoffs. And why did this happen after he struck deals with other car makers after Tesla did?

Bea Spiller: I'm not going to try to look into the brain of Elon Musk at all. We can take him at his word, which what he said when he did the layoffs was we need to think about reassessing how reliable these chargers actually are. I think that the winter fiasco of those Teslas all piled up, at a charging station, taking them hours to recharge, which should have taken 20 minutes, was a huge reputation hit for Tesla's chargers. So I think this idea of rather than continuing to expand, let's make sure we're actually getting the ones that we have to work so that our reliability is up in the Midwest and in the cold states. I think that's actually a really good strategy. And I'm excited to see the market open up to other players. There's a lot of competition out there. And if it's being dominated by three or four companies, then we're not going to be able to have actual price competition come out. So we've had government subsidies. We had some great companies come into the space. We've had huge investment by the traditional guys inspired by the new guys. And yet there's still the vast majority of cars that are sold are still internal combustion engines. Do you think there's just a certain, maybe even the majority of car owners that just want an internal combustion engine? Is there a limit to the market share that EVs can acquire?

Bea Spiller: I don't think so. I really don't think that people enjoy refueling with gasoline. I think they're just nervous about what it means to go electric. Obviously, there are some folks who are just like really anti-environmental anything. And so they love their diesel. They love the gasoline. I just want to press pause there because I do think you're dismissing a group of people who do like the sound and the feel of an internal combustion engine who still care about the environment. And I'm one of them. I bought an EV for all the reasons you're talking about, But I still prefer driving an internal combustion engine. And I think there's a lot of us out there.

Scott Galloway: Well, that's interesting. Because of the sound? Because of the feel, because of the responsiveness, because it makes me feel strong like bull, because of the rumble. It makes him feel like a man. Quite frankly. Of course, that's not what makes the hum. A humming car is not what makes you a man. But he doesn't like the hum over the vroom, vroom. There you go. Anyways, what I will agree with, though, just to validate your point, the gas station, once you stop going to a gas station, you forget how awful they are. It feels like carcinogens and that's where you're likely to get shot. I agree with you. Not having to go to the gas station is a big, big differentiator. Yeah. I drive past gas stations and I go, so long, sucker. I yell out the window. Just wave at them. Yeah, I do. I say so long, sucker. I do it. It's so pleasurable. But go ahead. Keep going. So what I understood is that electric vehicles, especially the new ones that are out there, are extremely responsive. They have a lot of torque. They have more torque and really great performance. The performance is amazing. They're amazing. I think to a certain degree, if folks can try it out and see, you know, does it actually give them that performance that they're looking for, we might be able to sway some of the people who really love their gasoline vehicles. So what would reduce prices increase adoption or what's the biggest hurdle facing the EV industry?

Bea Spiller: It definitely was at a lull, but it suddenly feels like maybe it's going up again like the people are. They overdid and now the prices are coming down. Because I do think people do want to try these things out. I do. I think there's a feeling among a lot of people, not just the elite necessarily, that this is interesting. And then some of the cars, the Mach is great. That's an expensive car, but even the little inexpensive cars are very... I have a Chevy Bolt, as I discuss all the time. I love it. It's my favorite car I've ever owned. But what's the biggest hurdle facing the EV industry right now? And will reduce prices, increase adoption? I do think that reducing prices significantly would help adoption, But that's not it. That's not all of it. Right. There's so many other issues. And part of it is range anxiety from individuals, particularly those who don't have garages. Is it really going to be able to get me where I need to go? If not, what do I do? How do I get my car? You know, it ran out of electricity. I can't just walk to the gas station and bring, you know, some electricity with me to power the car. So these are some issues that are going to require a massive expansion in the charging station network, which we are headed in that direction, but also a lot more education. And I would also say, you know, can we start to actually really test out the range before telling people, hey, you're going to have 350-mile range. I'm hearing from EV drivers. I was told 350. It's never more than 200. Okay, how does this happen? Why are we being told something, but then it's totally different? It feels a little bit like when you go to buy a gasoline car, they tell you the mile per gallon is going to be 30, and then you're getting 15, which is what happened with my Subaru Forester. And so, you know, it does feel like a little bit of bait and switch. So what's interesting is that there's been a bump in hybrids, which to me indicates people want to move in this direction. But they want that little bit of safety of a gasoline, that you have both choices, you know, and you'd like to rely on electric. It is a whole lot less – range anxiety is a real thing, but you really don't when you actually look at how most people, many people drive. Not everybody and certainly not in the Midwest or in these more rural areas. But you still don't want that. If you have kids, you don't want range anxiety and stuff like that. What about reduced prices? I think reduced prices is what will get people buying these things correct Absolutely I mean you know if you can go and purchase a electric vehicle I think that would really ramp up demand. I mean, there's a lot of needs. And I also just want to mention, a lot of people have needs that aren't being met by the options that are out there. So, for example, there's just no similar type of vehicle, for example, like a Forester, like the one that I have, which has a really big trunk, really big carrying capacity. The only option is like the Rivian, which costs like $100,000. So where are these affordable vehicles that provide these other needs that people have? The minivans, the big carrying capacity that's not completely unaffordable. So once we start having more options, and it's not just about the cheap ones, because maybe I don't want to buy a, you know, four-door sedan that has no carrying capacity for $25,000. Right. Well, the Ford Lightning is quite a car. I drove it. The Hummer. And it's really expensive, too. But it's cool. I drove it, and everyone loved it. Okay, let's take a quick break. When we come back, we'll talk more with Bea about the future of EVs.

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Scott Galloway: Scott, we're back with our special series on the future of travel. We're talking EVs with Bea Spiller. Scott, what is your question here about the environment? What's your next interest? Have you thought about, has anyone looked at this? So some old school people who are trying to probably protect the incumbents will say that the environmental impact of EVs, whether it's rare earth materials or the cost to build charging or build these factories, that the environmental protection offered by EVs has been overstated. Do you think, I'll put that there, do you think there's any truth to that argument?

Bea Spiller: I think it depends on how we see things moving into the future. So we will need a lot more critical minerals. If we continue to just make mines that are completely bad for the environment and really harmful, then yeah, there's our trade-offs. And this is exactly what we need to avoid. So there's new technology out there that is actually really thinking, how can we actually get those minerals out of the ground in a way that's not harmful, that reduces the land impacts, that reduces the social impacts. And so there's a lot of new technologies out there. I think we really need to be pushing this technological innovation on extraction and make sure that we can reduce the environmental impact of it. And there's a lot of efforts that are being made now. So I don't think that it's going to continue in the same way as it has before. And for me, I believe that the environmental impact of electric vehicles will just improve over time.

Kara Swisher: So when you think about what's to come, you have, Scott mentioned, you know, regulators and different things like that. You have the Biden administration, which is sort of not all in on EVs, but all in on EVs. And then you have Trump talking about getting rid of EVs. Um, what, what, is there, is there any, does that really matter? Will the, will, will their statements matter or not? And obviously California is trying to get everyone to buy EVs and get rid of gasoline powered cars. Um, where do you think, what, what impact will the politics have on this?

Bea Spiller: Politics could have some impact. For example, if they, you know, slow the, the release of funds through the charging and refueling, the charging and fueling infrastructure grants and the NEVI funds, the National Electric Vehicle Infrastructure Funds. These are programs that provide billions of dollars to investing in charging station. The federal government could slow roll the release of those funds, and that would then reduce how many charging stations are built, for example. I think it might be really hard to get rid of the federal tax credits. You know, this is legislation, so they would have to, you know, they could work towards that. They could try to remove the federal tax credits. But in the end, it's really hard to tell manufacturers you can't do this, right? If the demand is headed that way, a lot of manufacturers have made commitments to this and are really invested. There's somewhat of a ball rolling that it's just really, really hard to stop, regardless of how much Republicans might dislike electric vehicles. once you sort of get that demand going. And California is not the only one. There's a lot of states that have adopted the ZEV mandates. And so they will be pushing manufacturers to require sales of electric vehicles ramping up pretty quickly. And that covers a lot of the sales in the country. So I think there very limited amount that the federal government can do to stop this.

Scott Galloway: Yeah I think the car companies are well ahead of Donald Trump on this issue They far beyond it even if you don like some of the restrictions the government puts into place So where do you think the EV industry will be in five to 10 years? Any big changes or new top players? We have talked about Tesla losing market share, which it's been doing as others come into four, not just Chinese companies, but all the companies are sort of committed in this area. So the more competition and choice consumers get, the more cars there will be, et cetera, et cetera. So where do you think the industry will be in five to 10 years?

Bea Spiller: I'm hoping that we're going to have a huge amount, a huge array of options, right? Like I was telling you about, you know, no minivans, no really affordable SUVs or, you know, vehicles that are actually SUVs and not just look like crossovers for these people who have these other needs. So I think we're going to see a lot more options out there. And I would also say that we haven't talked at all about trucks, like actual long haul trucks and delivery trucks. I think we're going to see a lot more adoption in the medium heavy duty vehicle sector and probably more push to make sure that these fleets are able to shift to electric when they want to. Well, there's Aurora, obviously, and that's also autonomous. You know, there's a lot of interesting investments there. I always think those are going to be first because they're efficient. It's easier to charge them. They'll go to charging stations outside of a city, and then smaller trucks will take things into cities. Some of these autonomous long-haul trucks are really exciting. I think they are. And you can see how much money they save. I mean, the autonomous thing, I think that's a whole separate issue, right? And they do need to be electric. But I think there's a lot of concern about autonomous vehicles. And, you know, are they actually safe? Are they able to work? Yes, of course. Well, they're safer than people. That's for sure. I agree. I agree. I'm going with the autonomous over people in the end.

Kara Swisher: Scott, that's it for our part two of our three-part series on the future of travel. We've given you trains and automobiles, and we'll be digging into planes next. Thank you, Bea Spiller, for talking to us. We appreciate it.

Bea Spiller: Thank you so much. This was fun.

Kara Swisher: Today's show was produced by Lauren Eamon, Zoe Marcus, and Taylor Griffin. Brandon McFarland engineered this episode. Thanks also to Drew Burrows and Emile Silverio. Nishat Kerwa is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back later this week for another breakdown of all things tech and business. Support for the show comes from Mercury. What if banking did more? Because to you, it's more than an invoice. It's your hard work becoming revenue. it's more than a wire it's payroll for your team it's more than a deposit it's landing your fundraise the truth is banking can do more Mercury brings all the ways you use money into a single product that feels extraordinary to use visit mercury.com to join over 200,000 entrepreneurs who use Mercury to do more for their business Mercury banking that does more.