5 Reasons Why I’m (Temporarily) Switching Back from an Electric Car in 2024
I have owned an all-electric car for more than seven years. Even though I’ve only put ~21,000 miles on the car (a Nissan Leaf), I am temporarily going back to a Toyota Corolla after the repair quote for my Nissan Leaf came back for more than its worth (which is basically nothing from a licensed dealer).
My electric vehicle has been absolutely amazing to operate day to day, and they are the future. But right now, in June 2024, the market structure for electric vehicles in the United States is so messed up that I can’t justify owning one.
I’m a total amateur and actively dislike cars as a consumer good. But based on my experience, conversations with car people, and some digging around on reputable Internet sites, here’s what seems to be going structurally.
Car Insurance Companies Are Scared Due To Lack of Data
Internal combustion engine (ICE) vehicles have been around for 140 years. As a society, we’ve mass-produced and carefully-tracked them for nearly 120 years. And while cars have changed some in the last hundred years, you could teleport a car dealer, a car mechanic, and a car driver from 1924, and they’d be able to get caught up pretty fast.
Not so with electric cars. Even though they look (and are sold) like they are cars with slightly different engines, they are totally different vehicles.
And that scares car insurers to death.
In the late 2010s, they thought they could transfer their 140 years of data over…but it turns out they can’t. So, in 2024, they all feel like they are flying blind and are increasingly unwilling to pay for repairs and parts…or even insure the cars at reasonable rates.
This has so many knock-on effects. One is that it makes electric car repairs fabulously expensive. Unlike ICE cars, where you can change out a small component (e.g., a spark plug, headlight bulb, or AC refrigerant) and have it work, electric car repair requires you to swap out the entire component or system (e.g., the motor, the lighting system, or the entire compressor) before the insurance company will sign off on it.
When our rear passenger window was busted, we had to find a shade-tree mechanic to jerry-rig a new window and forfeit our claim because the dealer wanted to replace the entire door.
Ditto on the air compressor.
In theory, electric vehicles should have much lower maintenance costs. They have fewer working parts that wear out more slowly. But that only works in reality if you can replace the parts that do wear out. If you have to replace the whole car – the economics don’t work out quite as nicely.
There Is No Used or Parts Market…which Accelerates Depreciation
Depreciation is where cars really destroy wealth. But since ICE cars have a thriving used car and used parts market and 140 years of data, the depreciation curve is fairly predictable. Buy a used car to avoid the initial depreciation hit, and then you can generally assume that your car is worth something minus a little for every year and mile driven.
We paid $21,000 for a used Honda CR-V and could confidently sell it today for ~$17,000. I know its worth and how much I should pay to repair it.
But with electric cars…there’s no real used car market or used parts market. When we bought in 2017, I thought I was benefitting from the situation as an early adopter. I got a nearly new car with 10,000 miles on it for $10,000 – and a guarantee from the car company that they’d always buy the car back to recycle the batteries and parts.
That turned out…not to be true. Nissan backed off their guarantees and warranties. The car only lasted to 32,000. There is no aftermarket parts market (see the Insurers section).
The situation has become so bad that Congress passed a $4000 tax credit to try to jumpstart the market again. That’s propped up the lease / rental part of the used market…but had the side effect of destroying the lower end.
The end result is that electric vehicles have an accelerated deprecation schedule that…again, makes it hard to justify buying another used one if you are a moderate driver.**
**the economics might be different if you drive *a lot* of miles – and you can avoid many oil changes and fuel costs. It’s the year-based depreciation that’s the real killer.
Legacy Car Companies Will Not Make The Transition
I’m thankful that Nissan gave the Leaf a go back in 2011. But it became quite obvious that the Leaf is a little PR sideshow for them. Nissan makes SUVs and ICE cars. Ditto for every other car company.
Their business model revolves around selling cars at low margins and profiting from financing and parts.
The business model around electric cars is different. And I think their consumers and employees know it.
This is why Tesla and Rivian own the “full-stack” of their companies. They own everything from raw materials to parts, assembly, insurance, and software.
Electric vehicles are not just cars with a different engine. That’s the same reason Trek doesn’t make motorcycles and why Harley-Davidson never made a mountain bike. They have two wheels and look the same…but they aren’t.
On a global scale, every car company (and the governments of the US, Germany, Japan, Korea, and France) is scared to death of China’s car industry.
I think it’s less about China and more about the fact that they built their car industry as 100% electric—from the very start, just like Tesla…but at a China-scale.
Legacy Car Infrastructure Will Not Make The Transition
The roads and bridges we built for cars were all paid for with gas taxes. Gas taxes are possibly one of the more elegant taxes imagined. They are very much a “user pays” tax. They generally equate to use. And they are easy to collect.
No one has figured how to pay for car infrastructure for electric cars. Since they are still only 4% of the US market, it hasn’t been pressing…but it is now.
My state, Georgia, requires a flat fee of $250 per year. It’s easy to collect and is a “user pays” tax…but it absolutely does not equate to use. It’s the same whether I drive 1000 or 100000 miles, which encourages more resource use…which requires even more money. It’s not a good setup.
And even though we all voluntarily let Google, Apple, Facebook, and a million advertisers track our every movement all day every day…and store the movements forever in a database that can be checked by any random intern at every agency from every jurisdiction in America – the idea of letting State governments impose a fee per mile driven based on a digital odometer and invoiced via your elected tax commissioner is right out! as an un-American, ridiculous, insane, privacy-invading, and completely non-workable.
And that’s just the roads & bridges that haven’t been worked out.
It’s the fueling infrastructure that is an absolute clown show.
The short version is that gas stations are out. On a trip to Savannah, I got to see a Tesla Supercharging station at a gas station in Reidsville, Georgia in June.
I don’t care how fast your car charges or how many snacks you buy or how clean the bathrooms are – nobody wants to hang out at a gas station for one second longer than they have to
And… no gas station owner wants to make the upfront investment or the ongoing maintenance commitment for a market that might be totally different than what we expect
It’s pretty obvious to me that we’ll all charge electric cars at the destination, not during the journey.
But right now, no one, except homeowners, has a business model for building, maintaining, and paying for charging stations.
Even the Nissan dealership where I bought my car from can’t even keep their charger maintained and open for use.
I have generally gotten over range anxiety….but only because I don’t take my Leaf exploring new roads or visiting new cities. I charge it for crazy cheap at my house overnight, and I’m never more than 30 miles from my house with it. That makes up 90% of my family’s trips…but as my family gets older, changes jobs, changes routines, etc., the electric car can’t change with us.
I’m very optimistic that in 20 years, gas stations will be like old train depots or grain silos that randomly dot the landscape.
But wait, there’s more. And that’s the repair infrastructure.
America has many tire shops, oil change shops, and fast independent car repair facilities.
And none of them know how to deal with electric cars.
Even the dealerships that sell electric cars don’t have the mechanics or capacity to service them.
I’ve had shops that asked me to change the cabin air filter so they weren’t liable for “opening the car up”. My tire shop put the wrong tires on my car. It’s all just a mess right now.
China Beat The World To Batteries – and The West Doesn’t Like It
Back in 2017, the batteries were improving rapidly. I was confident that we’d be able to get a cheap 300-mile-range EV by 2024, and I couldn’t wait.
Well, it turns out that batteries did keep improving. And cheap 300-mile EV cars exist…but Americans can’t buy them.
The plot twist is that Chinese companies beat the world to better batteries…at the same time that everyone got all nationalistic.
Tesla is the only real competitor to Chinese companies, but they’ve run into their own problems and delayed their mass-market model. Meanwhile, US politicians of all stripes agree that we must keep Chinese-made electric cars out of the US via tariffs, policies, and potentially more.
So, after 7 years of owning a Leaf…the range increases are still insufficient to fit our needs (the ability for family members to travel more than 30+ miles in different directions overnight, without issues).
And I’m not confident enough in the build quality of any cars on the market to last more than 40,000 miles.
The Electric Transition Will Be Weirder & Better Than Expected
It’s weird to go back to an ICE car when electric cars are clearly the better technology in every way.
The situation reminds me of Blackberry and Nokia from 2008 to 2012. The iPhone was out, but the 3G network had not been fully built out. The apps were awful, the websites were not responsive, and the battery life was short.
So many people (like the US President) loved their Blackberry. I loved my Nokia. They just worked. My battery lasted forever. Messages went through. I always had a signal. I did all my online work on my amazing desktop. But I could tell that smartphones were where the world was headed.
It turned out that it wasn’t just a pure swap. Cellphones were truly an even swap for home phones. But smartphones were truly different—even the business model was different. AT&T is no longer one of the top 10 most valuable companies—Apple is.
I’m all-in-optimistic about electric vehicles. But I think the transition will be even weirder than we all think. It won’t be an even swap. With phones, it was less about the phone and more about communication.
Electric vehicles will be less about the car and more about transportation.
Electric cars are better than ICE cars. They have no emissions and require no fossil fuels to operate. But they are still cars. They are too big. They still kill people. They still require a lot of natural resources to manufacture. And they still use tires, which create serious ongoing pollution. In total, electric cars are still rough, though, again, at nowhere near what ICE cars do, but more than, like, my shoes or my bike or a subway train.
But moving away from ICE cars should mean a broader look at how we get around. My city is building bike lanes that allow my whole family to bike & walk to the library, restaurants, and grocery store. That eliminates a good half of our car trips.
I work from home or in a neighborhood coworking space – which has eliminated all of my commuting trips. We were able to live in a city, which massively cuts down on all trips. Amazon and Kroger both have electric delivery vehicles which cuts out all sorts of car trips to malls and stores.
It will take a lot of money to speed up the transition from fossil fuels. And while China excels in a top-down, narrow-goal approach, I hope the US spends our money in a more experimental approach, pushing for e-bikes, delivery vans, creative housing, trains, or transportation solutions that we haven’t even thought of.
I’m sure the electric car market will get out of its weird funk soon. But it’d be great if we didn’t force people who just need to get around into a single A or B choice. And it’s not just me, even JD Power found this trend.
