What these experts think about EV goals

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The United States federal government issued proposals earlier this year for new automobile pollution limits that include requiring up to two-thirds of new vehicles sold in the U.S. to be electric by 2032.

Like any political goal, pointed out Liz Clark, automotive team lead from the Office of Transportation and Machinery at the International Trade Administration, the 2032 deadline is a stretch goal.

“And you kind of have to put those stretch goals out there in order to kind of push the industry where you want to go,” she said during the MEMA Aftermarket Suppliers Vision Conference, a day after the proposals were announced. “And so whether or not we reach them, that remains to be determined.”

They also expressed concern about whether or not the goals match up with consumer demand.

“Is that actually where we’re going to land in terms of what is actually demanded? I think that that jury’s still out,” she said during the session, 3 Dragons: A View from an Economist, Wall Street Analyst and Aftermarket Analyst.

Both Bret Jordan, managing director at Jefferies, a consulting firm that works in the automotive aftermarket, and Todd Campau, associate director of aftermarket solutions at S&P Global, expressed concerns over infrastructure lining up with regulations.

Another concern Campau noted was the used market.

“Yes, it’s infrastructure, but it’s also monitoring the used vehicle opportunity around electric vehicles,” he observed. “And it’s really easy to say, ‘We’re going to make 70 per cent of new vehicles sold electric, by some year out there.’ But it’s really hard when they’re not selling used.

“They’re not selling at the rate that we’ve seen traditionally, for internal combustion vehicles. It might just be that it’s early. They come with an eight-year, 100,000-mile warranty on the battery.”

So EVs cost more, consumer loans are longer but the warranties are longer. So owners are likely keeping them longer.

“But until we start to see a vibrant use market around EVs … that leaves out a whole segment of our population that are going to need some form of mobility,” Campau said.