Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.
I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us.
Many car buyers have come to rely on a $7,500 federal tax credit on electric vehicles to soften the blow of high prices (versus gas-powered cars). But these EV credits could disappear after President-elect Donald Trump takes office, leading to an almost immediate drop in sales of electric vehicles.
EV sales could fall 27% if consumers lose the $7,500 federal tax credit, according to estimates published last week by three economics professors at the University of California, Berkeley, Duke University and Stanford University.
Registrations of electric models are on track to hit 1.2 million this year, but this latest study estimates are that there would be about 317,000 fewer registered annually without the credit.
We can look to Europe for some indication of how this might play out. Other countries that eliminated EV subsidies have seen similar drops — in Germany, electric vehicle sales tumbled 27% in the first 10 months of the year, after the government last December abruptly canceled an incentive worth $4,900.
The tax credits, which can be as high as $7,500 for new electric cars and plug-in hybrids, and up to $4,000 for used models, are a cornerstone of President Biden’s Inflation Reduction Act, a law meant to address climate change and spur domestic manufacturing. Since January, consumers who buy or lease eligible cars have driven home with $2 billion in credits on 300,000 cars, according to the Treasury Department.
New-car prices are flat in 2024, but have risen nearly 30% since the start of the pandemic. And the gap between battery-powered cars and internal combustion models remains wide. Consumers paid $56,900 on average for an electric car in October, $9,000 more than for the average gasoline car or hybrid, according to Kelley Blue Book, though the tax credit often significantly reduced that gap.
We have other, but related, news this week coming out of California.
California seems committed to zero-emission vehicles, even if and as the federal mood shifts.
The state’s governor, Gavin Newsom said Monday that if the incoming Trump administration cuts the $7,500 EV tax credit, he will propose rebates for eligible residents who buy electric vehicles.
Newsom said he would propose a new version of California’s Clean Vehicle Rebate Project, which was phased out in 2023, but funded more than 594,000 vehicles in its lifetime. The proposed rebates could come from the Greenhouse Gas Reduction Fund, which is funded by polluters under the state’s cap-and-trade program.
In a shot across the bow, Newsom said that Tesla’s electric vehicles likely would not qualify for California’s new state tax credits. Which clearly is not going to make Elon Musk happy.
We’ll see how this evolves over time, but you can be sure that it will cause tension between Trump, Musk, California and Newsom.
So, with that, let’s transition to Our Companies to Watch.
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and take the opportunity here on this segment each week to share that company with you.
Today, our new company to watch is EVident Battery.
EVident Battery is a startup that develops automated, comprehensive, non-destructive inspection and imaging systems for EV battery packs powered by proprietary hardware and artificial intelligence.
EVident Battery employs an advanced robotic mobility system equipped with a variety of sensors for comprehensive, non-intrusive, fast diagnosis of your EV battery pack.
They assess the battery pack condition through correlation between data signatures and known failure modes. This assessment is enhanced by a sophisticated refined machine learning algorithm. As a result, the company delivers a detailed report on a battery’s health, an estimated remaining lifespan, and its financial valuation.
Distinct from typical post-sale inspection technologies that focus solely on battery cell measurement, EVident Battery’s approach covers a wide range of critical battery pack aspects. This includes analysis of the thermal system, insulations, internal structure, and the battery pack’s enclosure, ensuring a thorough understanding of the battery’s condition and performance.
EVident Battery provides detailed information for all battery pack components by detecting the failures, including external and internal structural damages and integration issues among seals, insulation, terminals, cells, and thermal system.
EVident Battery offers its automatic inspection services and information to businesses needing reliable battery inspections or evaluations, including dealerships, service & auto shops, car fleet management, individual EV owners, car manufacturers, and insurance companies.
If you’d like to learn more about EVident Battery you can check them out at www.batteryevidence.com.
So that’s it for this week’s Future of Automotive segment.
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Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!
