March 1, 2024 12:04 pm

The EV Graveyard Reckoning, Hardly Anyone Wants to Buy a Used One

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via Mike Shedlock:

The market for used EVs is plummeting. What will car rental companies do with the used ones? Problems started in China but have spread to Europe and the US.

China’s Abandoned, Obsolete Electric Cars Are Piling Up in Cities

Bloomberg notes China’s Abandoned, Obsolete Electric Cars Are Piling Up in Cities

A subsidy-fueled boom helped build China into an electric-car giant but left weed-infested lots across the nation brimming with unwanted battery-powered vehicles.

On the outskirts of the Chinese city of Hangzhou, a small dilapidated temple overlooks a graveyard of sorts: a series of fields where hundreds upon hundreds of electric cars have been abandoned among weeds and garbage.

Similar pools of unwanted battery-powered vehicles have sprouted up in at least half a dozen cities across China, though a few have been cleaned up. In Hangzhou, some cars have been left for so long that plants are sprouting from their trunks. Others were discarded in such a hurry that fluffy toys still sit on their dashboards.

The cars were likely deserted after the ride-hailing companies that owned them failed, or because they were about to become obsolete as automakers rolled out EV after EV with better features and longer driving ranges. They’re a striking representation of the excess and waste that can happen when capital floods into a burgeoning industry, and perhaps also an odd monument to the seismic progress in electric transportation over the last few years.

Shenzhen-based photographer Wu Guoyong was one of the first people in China to document the waste that results from frenetic development, taking striking drone shots of the piles of abandoned bicycles in 2018. In 2019, he filmed aerial footage of thousands of electric cars in empty lots around Hangzhou and Nanjing, the capital of China’s eastern Jiangsu province.

“The shared bikes and EV graveyards are a result of unconstrained capitalism,” Wu said. “The waste of resources, the damage to the environment, the vanishing wealth, it’s a natural consequence.”

Hoot of the Day

EV graveyards are a result of unconstrained capitalism.

Mercy!

The Chinese government literally forced people to buy the damn things. Biden is attempting the same in the US.

That article is from August. Let’s flash forward to December 21 to see how things are going in Europe.

No One Wants Used EVs, Making New Ones a Tougher Sell Too

What started in China is not limited to China. A second Bloomberg article reveals No One Wants Used EVs, Making New Ones a Tougher Sell Too

Because most new vehicles in Europe are sold via leases, automakers and dealers who finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs. That’s hitting demand in some European markets that were in the vanguard of the shift away from fossil fuel-powered propulsion. Some of the biggest buyers of new cars, including rental firms, are cutting back on EV adoption because they’re losing money on resales, with Sixt SE dropping Tesla models from its fleet.

The problems are expected to intensify next year, when many of the 1.2 million EVs sold in Europe in 2021 will come off their three-year leasing contracts and enter the secondhand market. How companies tackle this problem will be key for their bottom lines, consumer confidence and ultimately decarbonization — including the European Union’s plan to phase out sales of new fuel-burning cars by 2035.

“There isn’t used-car demand for EVs,” said Matt Harrison, Toyota Motor Corp.’s chief operating officer in Europe. “That’s really hurting the cost-of-ownership story.”

“One has to slash prices significantly just to get customers to look at EVs,” said Dirk Weddigen von Knapp, who heads a group representing VW and Audi dealers.

Biden Struggles to Convince People to Buy EVs, Only 12 Percent Seriously Considering

On April 18, I reported Biden Struggles to Convince People to Buy EVs, Only 12 Percent Seriously Considering

On July 13, I noted Despite Huge Incentives, Supply of EVs on Dealer Lots Soars to 92 Days

On August 20, I reported Clean Energy Exploitations and the Death Spiral of an Auto Industry

On October 16, I commented Wake Up Mr. President, Consumers Want Hybrids, Not EVs

More accurately, that should read Wake Up Mr. President, Consumers Don’t Want EVs.

GM Decreases EV Investment in Favor of Buybacks

And on December 2, I noted To Shore Up Share Price, GM Decreases EV Investment in Favor of Buybacks

Last month, GM said it would push back the opening of an electric-truck factory in suburban Detroit by a year. It also scrapped an earlier goal of producing 400,000 EVs over a roughly two-year stretch, through mid-2024.

Slam Dunk Ford Project Now Unclear

Ford’s EV plan is similarly distressed. Ford pauses and then scales back proposed Michigan facility backed by government funding.

Manchin Blasts Biden’s Definition of “Foreign Entity of Concern”

In the you can’t make this up department, Biden’s EV Subsidy Rules Leave Room for Chinese Suppliers

Depending on the definition of “foreign entity of concern” a number of things are floating in the wind including $7,500 tax credits.

Officials worked for months to define a foreign entity of concern but failed. It is not even clear if Ford buyers are eligible for tax credits. “Licensing technology, might be permissible under the rules,” officials said.

Who wants to buy a new EV on the basis a $7,500 credit “might” be allowed?

Q&A on What’s Delaying the Definition

Q: Why the struggle on the definition of “Foreign Entity of Concern”?
A: Ford wants to use Chinese technology but GM wants to block it.

For discussion, please see An Epic Battle: Ford to Use China’s Battery Technology, GM Wants it Blocked

My comment then was “Biden is guaranteed to upset someone. That’s what happens when you interfere in the free markets, taking sides.”

Biden is avoiding a firm definition hoping the problem will go away. But it won’t.

Green Fantasy

In the real world, The Green Fantasy Ends Because Consumers Don’t Want to Pay for It

EVs are not selling because despite massive subsidies to both the manufacturers and consumers, the latter via tax credits, consumers don’t want them.

But here we are, blaming this mess on capitalism. “It’s a natural consequence.

What a hoot.

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Original Source: The EV Graveyard Reckoning, Hardly Anyone Wants to Buy a Used One

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