‘Too expensive’
There are many reasons why people may hesitate to switch from internal combustion engine (ICE) vehicles to electric ones. According to O’Leary, the primary issue is the price.
“The basic problem with EVs is that the mid market, where the majority of cars are sold, is they're too expensive,” he said.
O’Leary was not alone in highlighting the costly nature of the EV transition.
Last year, Tesla CEO Elon Musk mentioned that cost is “more of an issue” for EVs than range, emphasizing that “a long-range car needs to be affordable.”
But this pricing gap is closing. At the end of last year, the average transaction price for a new EV was $50,798, compared to $48,759 for a new gas-powered vehicle, according to Cox Automotive.
Invest in real estate without the headache of being a landlord
Imagine owning a portfolio of thousands of well-managed single family rentals or a collection of cutting-edge industrial warehouses. You can now gain access to a $1B portfolio of income-producing real estate assets designed to deliver long-term growth from the comforts of your couch.
The best part? You don’t have to be a millionaire and can start investing in minutes.
Learn More‘Memory loss’
O’Leary identified another factor that may deter people from going electric: as EVs age, their mileage might decline.
“There's a memory loss aspect to batteries,” he explained. “This happens with any lithium battery. And it's starting to manifest itself because some of these cars are getting into older age — past seven years — and people are starting to see the drop off in their ability, their capacity to store electricity. So the overall mileage goes down.”
The degradation of lithium-ion batteries is influenced by several key factors, including temperature, charge/discharge cycles, and time. The rate at which EV batteries degrade also varies based on the battery's design, the vehicle’s usage patterns and operating conditions.
Telematics and fleet management solutions provider Geotab conducted a study analyzing the battery health of 6,300 fleet EVs and found that the average battery degradation was around 2.3% per year. The study described this loss as “arguably minor.”
This is one of the factors influencing pricing, however. "Battery-powered vehicles retain just 38.4% of their initial value on trade-in after 36 months and 60,000 kilometers (37,200 miles), compared to 53.3% of the original value for all fuel-types," wrote Bloomberg columnist Chris Bryant, citing UK data compiled by Autovista24.
This 2 minute move could knock $500/year off your car insurance in 2024
OfficialCarInsurance.com lets you compare quotes from trusted brands, such as Progressive, Allstate and GEICO to make sure you're getting the best deal.
You can switch to a more affordable auto insurance option in 2 minutes by providing some information about yourself and your vehicle and choosing from their tailor-made results. Find offers as low as $29 a month.
