The Expert Podcast

Okay, by now, everybody's seen the news where the state of California is looking to ban sales of gas-powered cars. Basically, everything has to be an electric vehicle (EV). But there's more to it than just California because you might think, "Well, California is only one state. I don’t live in California, it’s not going to affect me."

Even though California is technically one out of 50 states, it represents about 15 to 18% of the automobile market. So, when manufacturers build vehicles, they have to make sure they keep California in mind because it’s a larger-than-average share of the national vehicle sales market. In addition, there are other states doing this. The state of Washington has already announced that they’re doing this. So now you add those two together, and there are four or five other states that have either announced they’re going to phase out gas-powered cars within the next few years—by 2030—and some of them have already put in place or are expected to do so very shortly.

If you add up all of the states that have either announced or certainly will, you have about one-third of the population of this country living in a state where gasoline vehicles will no longer be eligible to be purchased. In fact, some states will not even allow you to register them. In the state of Washington, the law says that not only can you not buy them, but you can’t even register them. If you already own one when this law passes, your registration will be rejected when you try to renew it.

California, it seems, will let you keep your gasoline car that you already have. It’s unclear whether you’d be allowed to buy one in another state and bring it into California, but the writing's on the wall: electric vehicles are being shepherded in as a requirement, where gasoline vehicles won’t be. At this point, if the states pass these laws, even if the manufacturers are still making gasoline cars, it might even be impossible for you, as a consumer, to buy one because manufacturers aren’t going to build cars that are essentially illegal in a large part of the country. In addition, they’re not going to build parts for cars that are being phased out. So, if you have a 10-year-old or five-year-old car that needs parts, you might not be able to get them.

A lot of people think, "Well, I’ll just keep my gas car forever and keep driving it." Good luck with that. You might not be able to continue to maintain that car in operating condition if parts aren’t available, even things like computer chips, electronic parts, or collision parts. What if a car gets crashed, and you need a fender, but there are no fenders? What if the brakes wear out, and you can’t buy brakes?

So, you might think, "Well, maybe I’ll just bite the bullet and buy an electric vehicle." Well, not so fast. At the same time this is happening, EV prices are going up. According to this article from The Verge, electric vehicle prices are going up. In fact, Ford announced today that for a lot of vehicles, they’re increasing their prices between six and eight thousand dollars for electric vehicles due to what they call "production cost increases."

What does this mean for you as a consumer, for the market, and for the industry? Let’s first start with what your thoughts are as a consumer. What are your thoughts on the fact that electric vehicles may not be a choice anymore but might become a requirement? You might think, "I’m not in California. I live somewhere else." But what if your state decided to do the same thing? What if the market realities made it so that you couldn’t find a gasoline vehicle because the manufacturers aren’t making gasoline vehicles?

Are you prepared to live a life with electric-only vehicles? Do you have the capability to charge it? Does your transportation usage require driving long distances that need extended range? Are you in the automotive industry? Are you a repair shop? Are you prepared for the transition to electric vehicles? Does your shop have the right technology to repair and fix these vehicles? In fact, are third-party repair shops even going to be a thing? Electric vehicles might be dealer-only repairs.

Think about this: If you have a cell phone or a computer, most of those things are under warranty, or the repairs are done through a download or only at the authorized retailer. It may be that third-party repair shops, aftermarket parts, and local garages are not even needed anymore because everything’s electronic. There are no mechanical parts. Is that industry going to fade away?

What about collision repairs? Well, collision of an EV may be more than just sheet metal. In most cases, the floor pan of a car—basically the underneath of a car—gets damaged in almost every collision. Even light impacts damage the floor pan, and that’s where the battery is. If the battery is damaged, that’s more than just sheet metal repair; that’s a mechanical item that may have to go back to the dealer.

What about dealers themselves? Are you in the automotive retailing industry or car dealerships? What does this kind of change mean for the future of automotive retailing? Is it going to change how you run your dealership? What about used car lots? Will used cars be practical to buy and sell, especially used electric vehicles? A five-year-old electric vehicle might have more than 100,000 miles, and now your battery is out of warranty. Most manufacturers warranty the battery for eight years or 100,000 miles. Well, some people hit 100,000 in five years. That’s only 20,000 miles a year. Many people drive more than 20,000 miles a year.

So, in five years, if that battery is out of warranty, does that make the car worth anything? Is it worth even buying or selling these cars, because the battery, if it costs fifteen thousand to eighteen thousand dollars, is a five-year-old car even worth that to replace the battery?

Tell us your thoughts. This is all brand new. It’s a new world, a new era, and all new information. We’d like to hear your feedback on what you think about the transition to electric vehicles and what these new laws mean for you. What opinions do you have about this?