EscapeVelocity's Net Worth for December 2023


Assets Value Change ($) Change (%)
Stocks & Bonds $23,412,779 $1,520,806 6.95%
Retirement $1,634,664 $147,431 9.91%
Home $2,775,450 - -
Other Real Estate $561,920 - -
Cars $85,000 $35,000 70.00%
Personal Property $0 - -
Business $100,000 - -
Sail Boat $405,000 - -
Power Boat $150,000 - -
$29,124,813 $1,703,237 6.21%
 
Debts Value Change ($) Change (%)
Home Mortgage(s) $0 - -
Other Mortgage(s) $0 - -
Student Loans $0 - -
Credit Cards $0 - -
Car Loans $0 - -
Other Debts $0 - -
Total Debts $0 - -
Net Worth $29,124,813 $1,703,237 6.21%
*All values shown in USD ($)
Notes:
We bought a new vehicle to replace an old one. We looked at pure EVs and, for the first time, I had to confront whether we wanted to buy one. We ultimately bought a traditional internal combustion engine (“ICE”) vehicle, and here's why.

Before I get into the weeds, however, let me say I've done a ton of thinking, reading, and due diligence. There will be people who smugly will say that I'm wrong while they talk about alleged adoption curves, scaling of infrastructure and manufacturing, repurposing of minerals and batteries, reductions in price, etc., etc., which is all part of “the dream.” I'm not persuaded.

At the end of the day, regardless of what we can afford, I'm convinced pure EVs will have limited appeal long-term and, at least in the United States, only be adopted as a luxury (during my lifetime, anyway). That said, I *do* think the market for *hybrid* plug-ins will continue to accelerate and probably dominate.

There are several reasons pure EVs will be limited, in my opinion, and here is a non-exclusive list in no particular order:

* A huge number of people do not live in a place where they can realistically charge EVs. Many people live in apartments, rental homes, or homes with only street parking; none of which will provide the infrastructure on a broad scale for them to charge an EV.

* EVs are useless bricks when the battery dies, the life of their batteries is truly unknown, their re-charging performance is shown to go down considerably over time (i.e., more charge cycles, less performance), and the cost to replace the batteries is astronomical and likely not worth doing for most people. That is, unlike an ICE vehicle, which can be rebuilt indefinitely at a low cost, replacing an EV battery is about $40K to $50K in today's dollars, battery warranties are all over the map, and whether you will even want to replace the batteries when they are worn out (or whether the vehicle has any residual value with a dead battery) is debatable (recent articles show EVs lose as much as 50% of their value in only one year).

* In many places, the power grid, such as it is, is already strained to provide the basic electrical power needed for running air conditioners and washing machines. How will people cope with rolling blackouts or power shortages that prevent them from charging their vehicles? Indeed, we happen to live in a place where most people have backup generators because we lose power in the winter. And, on that note, extreme temperatures (both hot and cold) also drain batteries and wear them out faster.

* Even with so-called fast-charging capabilities, who wants to wait 20 minutes while on the road to charge an EV? And, if EVs really did take off, what makes anyone think they will roll into a convenient “fast-charging station" and not have a line of other EVs needing 20 minutes to charge before them? By the way, fast charging is harder on the batteries (i.e., reduces their life) and you can only charge a battery so fast without damaging it (i.e., it's an energy-density thing). So, for those dreaming of “60-second charges,” it's not happening.

* The environmental argument for EVs is simply not reason enough to buy one for most people, but even if it were, the argument is rubbish as we will inevitably burn fossil fuels to create the additional electricity to charge all these batteries. And then there is the disposal of the used batteries—we can't even figure out how to properly dispose of laptops and mobile phones safely, so how will we handle old vehicle batteries any better? As someone said to me recently, “EVs were invented to save the auto industry, not the earth.”

* I recently rode in a friend's Rivian SUV. Yes, it was luxurious as hell, fast as fuck, built like a tank, and amazingly spacious and comfortable and fun. But, it weighs 7,100 lbs (that's 30% more than a Hummer!) and, as a result, its tires wear out quickly (and, of course, it causes more road wear as well, which will need fixing). In fact, EVs are so heavy that there are already reports that car garages will need reengineering to support their weight.

* On that note, Rivian also just reported that it loses over $33K per vehicle it sells (Lucid Motors loses even more per vehicle). That does not represent a compelling argument for investors or for the future viability of the company, which could then leave you with an unsupported expensive vehicle.

* The Rivian, like other EVs, is also stupidly complex. It's gorgeous but it is not going to be easy or cheap to fix. Try Googling the cost to fix a Rivian and you will see how just a small, cosmetic fender bender (that would have been a few thousand on a typical car) caused a huge bill due to Rivian's complex unibody construction. And then consider what happens to batteries in EVs during a serious collision—you will learn that damage to the batteries in a collision is a huge problem for EVs in terms of cost to repair and fire danger (which is an unknown risk for EVs as they age).

* And all this is before the juicy government financial incentives are, as they must ultimately be, removed. Does a $7,500 refund from the government really make an EV more attractive? It does, to a degree, but most EVs are priced at luxury levels (because it's mostly luxury shoppers who are buying them!) and don't even come with a charging cable (incredible, I know) and the Level II (220 volt) charging cables cost about $750, plus at least that much to install in your home. Oh, and most states charge an extra fee on your registration for driving an EV, allegedly because of lost revenues from gas taxes. Could that amount ever go up, perchance? And how much more often will you have to change the tires on your EVs? This goes on and on.

* Speaking of government, some people argue EVs are destined for success, based on government mandates, like California or Norway. This is a ridiculous argument since we all know such mandates can change or be entirely eliminated (see, for example, what's going on in Virginia right now where they're trying to repeal mandates). Rest assured, for better, or for worse, the government will not be able to force the success of EVs if even *some* of what I'm saying is accurate.

Indeed, the whole EV thing feels like a weird virtue-signaling flex that's going to lose the "head of steam" it's been surviving on until now. “Hey, look at me, I paid 25% to 50% or more for a luxury vehicle that runs on pure electricity so I don't have to pay for gasoline!?” And, "after I drive it for 8-10 years or about 100K miles, it will be a worthless brick because I cannot afford a new battery, they don't make them anymore, the company is out of business, and the vehicle is dead and stuck in my driveway and no one wants to buy it.” Where are the cost savings for real consumers?

Again, I think hybrid vehicles are a great alternative (but try finding one that is available immediately these days) and, as a result, ICE vehicles are a bargain by comparison (I'd expect prices on hybrids to continue to fall as they become more available). In fact, with folks splurging on EVs and hybrids, the cost of gasoline should stay low … so thanks to them, I guess!

So yeah, EVs are cool, fast, and fun to drive, but I don't see the long-term appeal to consumers beyond a limited market share to a certain wealthy demographic because of all the stuff above (i.e., not just limited to range, environmental issues, cost, but all the other things). And yes, I am aware of the analogy to the horse and buggy versus the automobile. But, unlike the switch from a horse to an automobile, the switch from an ICE/Hybrid vehicle to an EV does *not* provide quantum leaps in comfort, range, or safety without the need for huge investments in infrastructure.

It's actually the opposite. Horses can only go 30-40 miles per day, it's an uncomfortable way to travel, and potentially dangerous. Even the original Model-T had a 200-mile range (they actually got 20 mpg!) and you could refill them over and over to go indefinitely. They were far more comfortable than riding horses, far more capable and prestigious, and, of course, not easily spooked by noises, etc. You simply cannot compare the arrival of EVs to the arrival of the automobile.

Anyway, not that anyone asked, but that was our thinking on not buying an EV.

p.s. Notice I didn't even mention things like the Tesla lawsuit concerning their “diversions team” for fraudulently handling complaints about false driving-range information, or Ford's halting its $3.5 billion battery plant project, or GM and Honda scraping their plans for “affordable” EVs, or Toyota's CEO having been a long time skeptic of EVs … Be it corruption or economics, EVs are already looking like a failure and folly for the rich, at least for the time being.

Comments

12/27/2023 9:02:43 AM cloudcaster
I wish I would have read this before the holidays, as it would have armed me with some salient facts. I just purchased a Honda HRV, my brother-in-law just purchased a Tesla. Christmas dinner discussion over my "folly" got so heated, it felt like a religious war. I'm glad I'm not the only one who thinks EVs are simply impractical and expensive without absolutely massive spending on electrical infrastructure.
12/27/2023 9:21:28 AM FatStacks
This is better than any Car and Driver article I've read. Are you interested in an editorial position? :) Fantastic info, and an eye-opener for me. We're a couple years away from purchasing, but as a performance nut, I was on the fence between an EV (Tesla) or a higher-perf ICE. Needless to say, this is incredibly helpful data to consider and I think our decision has been made. Thank you!
12/27/2023 10:12:20 AM EscapeVelocity
Like you both, I felt pressure to consider an EV but hadn’t figured out why I was hesitant. This was my way of laying out my current thoughts and, if nothing else, I’m glad someone found it interesting! I’m admittedly a horrible prognosticator, but another fact: The US just broke an all-time production record for oil in December.
12/30/2023 9:00:33 AM mydogwantsmetoretire
Great write-up here on EVs. For consumers, until there is true cost parity with ICEs and EVs, governments will need to incentivize for mass adoption. Without even more state and local incentives, the mandates will not be hit for various reasons. I just don't see buying an EV soon until more cost parity is obtained.
1/2/2024 11:34:50 AM ZenFinance
Thanks for your input. I purchased a Tesla Model X, a few years ago and here is my take on it 1) It is one of the fastest and most fun cars that I ever driven, 2) It is safer than most if not all ICE cars. 3) No maintenance for oil changes, fluides, etc. 4) Not going to or thinking about a gas station is so convenient. I plug in everyday at home. 5) Range is good enough for 95% of driving needs. 6) Tech is awesome and best in class compared to most cars I've experienced. It's kind of like upgrading to an iphone from a flip phone. Downsides that I have seen 1) Save money vs gas- in my experience, electric prices increased over the last 2 years and there isn't much of a daily savings. 2) Build quality could be better 3) Parts are expensive and hard to come by 4) Depreciation is massive My take is EV is a fun toy that is safe and perfect for daily driving. EV is not a good long term investment so buy one for the enjoyment versus an investment.
1/4/2024 12:04:35 AM testertest98
To offer a a different data point: I have 2 EVs. 1 hatchback that is 6 years old and still have 90% of the range. The other a plugin hybrid minivan that runs on Electric alone for first 33 miles. This is 5 years old. The hatchback cost me 18k after rebates. The minivan cost me 43k. I think for me the case for both these purchases as EVs has become clearer over the years as I look at the running and maintenance costs.
1/6/2024 10:24:42 AM jbmil
This is one of the best analysis of EV purchasing that I've seen. You should find a broader audience for this, well written. I have been going back and forth on a EV lease. I am not willing to purchase because of the massive depreciation, and the battery technology seems to be moving at a pace that a 3 year old EV with some battery degradation will really plummet in value. This makes the lease a little safer for trying and EV through leasing, along with most manufactures offering high earners to be able to use the 7500 credit for the lease (it's a loophole). The longer I look at this, it just appears that the EVs are just marked up, and the leases come in line with many of their ICE products. So I likely will just purchase an ICE or PHEV as it seems the safe bet and better value at the moment.