Turmoil as car industry puts new EV plans on hold & moves to PHEV. How did we get in this mess?

Summary

In this video, Harry delves into the turbulent state of the car market, focusing on recent shifts by major manufacturers in the UK, Europe, and beyond. He discusses the struggles and strategy changes of brands like Lotus, Volvo, BMW, and Porsche, who are reevaluating their electric vehicle plans due to poor sales and shifting consumer demand. Harry provides historical context, including the impact of 'dieselgate' and the rise of Tesla, while exploring the viability of electric vehicles in the current market. He also highlights the role of hybrids and the influence of government policies, particularly in the UK, and predicts how the car market will evolve in the coming years.

Takeaways

• 😀 The car market is experiencing significant confusion and turmoil, with manufacturers changing direction and announcements being made frequently.
• 😀 Lotus, Volvo, BMW, Bentley, Audi, Porsche, and Aston Martin are all reevaluating or delaying their shift to all-electric cars, citing slow sales and market challenges.
• 😀 The push for electric cars initially began after the Dieselgate scandal, as manufacturers sought alternatives to meet stricter emissions standards and to compete with Tesla.
• 😀 Early premium electric cars faced issues, including rapid depreciation, which has led to reduced consumer confidence and a shift toward hybrid options.
• 😀 Plug-in hybrids, like the Range Rover Sport, have gained popularity due to their improved electric range and flexibility, offering a better experience for many consumers.
• 😀 Small, affordable electric cars, such as the Renault R5 and the upcoming Fiat Panda, are expected to see significant growth in sales as they make more sense for consumers, avoiding the issues of larger electric vehicles.
• 😀 In countries like France, high taxes on CO2 emissions and vehicle weight have made hybrid cars more attractive, with huge tax penalties for larger non-electric vehicles.
• 😀 Governments, particularly in the UK and Europe, are pushing towards electric vehicles, but there is a growing concern that 100% electric car adoption may take longer than expected, possibly until 2050.
• 😀 The UK government’s zero-emission mandate is seen as a major hurdle for hybrid vehicles, which can still be very practical for many consumers, and needs to be reconsidered.
• 😀 The global shift to electric cars is uneven, with some regions (like India, Japan, and the US) lagging behind, which impacts the strategies of global manufacturers who still rely on combustion engines for markets outside Europe.

Q & A

What is the current state of the car market in the UK and Europe according to the video?

The car market in the UK and Europe is in turmoil, with a lot of confusion and constant announcements from manufacturers about changing their direction. Many manufacturers are rethinking or delaying their plans to go all-electric, often citing low sales or poor market reception of early electric cars.

Why did Lotus change its direction on electric vehicles?

Lotus initially planned to go all-electric with models like the Evija, but sales of their electric vehicles, particularly the Lotus Evija, were low. As a result, they decided to rethink their strategy and are now considering super-hybrid cars with either hybrid or range extender engines instead of fully electric.

How is Volvo altering its approach to electric cars?

Volvo has announced that it will no longer pursue a goal of being entirely electric by 2030. Instead, they are responding to growing demand for plug-in hybrid vehicles and are planning to incorporate engines into their electric models.

What did BMW announce about its V8 engine?

BMW announced that its V8 engine will live on indefinitely, at least in markets like the USA and the Middle East. The company is diversifying its approach, betting on electric vehicles, plug-in hybrids, and performance M cars to cover different market segments.

Why did Bentley cancel its plan to go all-electric by 2030?

Bentley canceled its plan to go all-electric by 2030 after reassessing the future of electric vehicles and their internal combustion engine (ICE) development. They believe that there are still one or two generations of ICE vehicles left in their product lineup.

What challenges is Porsche facing in the electric car market?

Porsche is experiencing a decline in sales, particularly with its Taycan model, which has seen a 40% drop in sales in 2024. Despite these challenges, Porsche is working on introducing electric models like the Boxster and Cayman, though these models are also facing delays due to development issues.

Why are premium manufacturers rethinking their shift to electric vehicles?

Premium manufacturers are reevaluating their electric vehicle plans due to low sales, high development costs, and the challenges faced by early electric cars. Many early adopters were disappointed with the performance or practicality of those vehicles, which led to a decline in demand for premium electric cars.

What are the advantages of plug-in hybrid vehicles according to the video?

Plug-in hybrid vehicles, like the Range Rover Sport 460e mentioned in the video, offer the best of both worlds. They allow for significant electric driving range (50-60 miles in certain conditions) while still having the flexibility of a gasoline engine for longer trips, making them practical for a wide range of users.

How are European countries incentivizing the adoption of electric vehicles?

European countries like France have introduced taxes on CO2 emissions and weight, which encourage the purchase of electric and hybrid vehicles. For example, a high-emissions car can face significant taxes, while hybrids are exempt, making them a more attractive option for buyers.

What role do Chinese manufacturers play in the European electric vehicle market?

Chinese manufacturers are entering the European market with competitively priced electric vehicles. They can sell electric cars at lower prices due to government incentives and sell carbon credits to other manufacturers who do not meet zero-emission mandates, which gives them an additional financial advantage.