Everything we see says electric car purchases are on the rise. Many hold that they will overtake conventional and hybrid cars in the not-too-distant future. From just a 0.14% share of the market in 2011, they’ve powered ahead to 2.1% in 2018. 2019 looks to break that record, even with the overall downturn in sales.
Neutral Confidence In EVs
But according to surveys by both JD Power and Survey Monkey, most buyers say they have a “neutral confidence level” for electric vehicles (EVs). Further, the results indicate there is not much interest by consumers in purchasing EVs in the foreseeable future.
The Power survey concludes that 68% of all consumers in the US have never even been in one. Consumer Reports found that in a 2019 plug-in electric vehicle survey only 36% said they would consider buying an electric vehicle. With all of these optimistic predictions what are the EV companies seeing that actual buyers aren’t?
Tesla Continues to Confound
That is, except when it comes to Tesla. The Model 3 sold slightly less than 40,000 worldwide in June 2019, according to Inside EVs. They sold almost 140,000 Model 3s in 2018 alone. Tesla has three of the top four best selling EVs including the number one spot. Chevy’s Volt and Bolt come in sixth and seventh. At the bottom of the top 10 is Ford’s Fusion Energi.
What confounds the numbers is that Tesla posted a $408 million loss for Q2 2019. Plus, their rising long-term debt to service is just shy of $10 billion. Yet they make up more than 50% of total EV sales in 2018. In May, Tesla CEO Elon Musk told internal staff the company would run out of cash by the end of Q1 2020 unless “hardcore cost-cutting efforts are made.”
So with all of the questionable financial issues plaguing Tesla and the small market for EVs their value should be low, right? Instead, they are valued at $53.5 billion—three billion more than GM. Tesla has the highest value of any American car company.
Where Are They Buying EVs?
While EV sales in the US are underwhelming, China has seen a rise of 62% in 2018 while Europe is the leader in EV usage on a per-capita basis. According to China’s Association of Automobile Manufacturers, a total of 1.3 million EVs were sold in 2018. As impressive as that number is, that puts EV sales in China at just two-percent—the same as in the US.
More Questions Than Answers
Will China’s EV rise level out this year? Will China and the US only see incremental increases of about two-percent in the coming years? Can Tesla weather its poor financial position? How will Tesla reconcile their finances with their investors? If nothing else the future of the automobile will be interesting to watch.