I asked an auto analyst about industry resistance toward electric cars. He told me:
Charles Edward Miller
1.) Automobile manufacturers make less profit building electric vehicles (EVs).
When designing a car that's much different from older models,
research and development costs are much higher.
In addition, stockpiles of old-style car parts i.e., carburetors, might become worthless when building a dramatically different (i.e., electric) new model.
Small design changes, year over year, cost significantly less than big changes.
Carmakers “attempt to rake in profits from traditional vehicles… EVs have historically been unprofitable or produce lower profit margins.”
2.) Automotive Workers can expect lower wages if the company gets lower profits.
Also, an electric car has up to a thousand fewer moving parts then an oil / gasoline car, which means layoffs for United Auto Workers (UAW) members.
"A...study...found that mass adoption of EVs could cost the UAW 35,000 jobs.”
“EVs...require as much as 30% fewer hours of labor for assembly."
"Climate change and the global impact of fossil fuel emissions are a secondary consideration for many union members compared to job security."
3.) Automobile Dealers make less profit selling electric cars.
Dealerships get most of their profits from their “service” departments - doing repairs and maintenance; they make relatively less money from vehicle sales.
Since an EV has fewer parts, there are less things to maintain or repair,
and therefore less money for their service departments.
In addition, if they made the switch to electric cars, they'd have to install several DC fast-charging stations (around $100,000 each) for their car lot.
Dealerships “tend to make their profits on the service side of the operation...
With electric vehicles, there’s far less money to be made on service.”
4.) The analyst didn't mention the many businesses that will lose out with a full-scale transition to electric cars:
- smog check places
- gas stations
- oil change outlets
- car repair shops
- oil companies...etc.
Traditional car dealers & car companies also have a problem similar to
“technological lock-in”, and the “stranded assets” phenomena:
the more EV’s sold by a traditional car dealer or auto-maker,
the fewer of their (more profitable) conventional cars get purchased.
4 tons of toxic emissions (per commuter / per year) come out of conventional