A Noisy Truck Market

By Lloyd Graff

There may never be a more fascinating and trying time to be in the automotive business. 

Demand for trucks and SUVs is powerful, but manufacturers cannot build them in the quantities people want because computer chips are short. The executives can blame themselves for being much too conservative in their ordering last year, but demand has been a yo-yo because of the defiant and devious nature of the COVID-19 variants. People didn’t buy cars in 2020 because they were afraid to walk out of their homes. This year things have flipped as folks hit the road. Money is still cheap, old F-150s are looking dilapidated, and the Feds have given so many freebies out that trucks and SUVs look too attractive to pass up. 

Big demand, not enough product. That’s one interesting problem to navigate. 

Then there is your very rich and powerful Uncle Joe (Biden) who observed the Obama Administration resuscitate General Motors in 2009. He feels this is his moment to impact the car builders, forcing electric on them by setting virtually unreachable emissions and gas mileage regulations on their windshields. 

It is possible that Biden really believes that he is saving the planet by dictating a massive changeover from gas to electric by 2030. After all, we do have the convenient existential threat of “climate change” to justify everything from the switch to veggie burgers at McDonald’s to giving billions of dollars to the government operated Washington to Boston trains that never run on time. 

The auto executives and the world of Tier One, Two, and Three manufacturers, whose businesses revolve around Biden’s decisions, are now living in a world of mirrors. Do they prepare for an environment in which the big car makers struggle to build trucks and SUVs that are rechargeable? Does Exxon plan to abandon oil rigs in the Gulf of Mexico and refining operations near Houston? Do the frackers try to raise money to start drilling again with oil prices around $60 a barrel?

It is an utterly confusing world in which Putin and the Saudis set oil prices by jiggering output and Biden thinks he’s saving the world, or at least his presidency, by setting virtually impossible gas mileage goals to increase electric vehicle sales, which he thinks will be made by union workers who will vote for Democrats in the 2022 and 2024 elections. 

Amidst all of the competing interests, you have market research that tells car executives and dealers that real people really do not care much about carbon emissions. They want their Ford F-150s, GM Silverados, and Chrysler Jeeps, and they want them to reliably transport them and their cargo from Boise to Bozeman and Nashville to Memphis. Gas, electric, hydrogen, or pretzels, it really doesn’t matter much to them. The latest data predicts only 15% of the vehicles which will be sold in 2030 will be electric and 3% hybrid. 

So we have the 2021 Dancing with the Stars with Joe Biden and the car bosses doing the tango. Dance and dip. The car guys plead their devotion to defeating the dreaded climate change. Billions upon billions of dollars are pledged to be spent, yet Tesla is the only car company that builds an electric car people will buy. When will that change? Nobody knows.

Demand for gas guzzlers far surpasses the ability to produce them, and gas prices approach $5 a gallon in California. It is pretty weird and goofy, but in the real world of brakes and gas pedals and transmissions, people are trying to plan and order stuff. Meanwhile, used cars are flying off the lots.

Question: What’s stopping you from getting an electric car?

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31 thoughts on “A Noisy Truck Market

  1. Daniel

    Your comment “real people really do not care much about carbon emissions” is the part of this article that scares me.
    Sounds to me as if you don’t believe that “the dreaded climate change” is real.
    The time is now to take action, before it is too late to to avoid the climate disasters that we are seeing every day in every nation on the evening news.

     
    1. Big Al

      Kind of makes you wonder what caused all the ice age swings that have happened over the millennia. Was it methane gas from the dinosaurs? Inquiring minds want to know.

       
  2. Lloyd+Graff

    Daniel, I am extremely skeptical of the “existential threat of climate change” trope that is promoted by The New York Times and PBS as if it unassailable gospel. Many experienced and reputable scientists dispute the dire warnings. Is climate changing? Yes. Does it always change? Yes. Is the change going on today any more significant that the change that went on in any decade over the last hundred years. The data says, unlikely.
    Forest fires have always happened. Ask Smokey the Bear. But because of poor forest management, people building homes in forested area like Paradise, California, we get conflagrations that hurt more people.
    Warmer weather will mean fewer deaths by cold and ice which kills way more people than slightly warmer temps.
    Air pollution from cars in America has never been so benign. And the polar bears weigh on average 300 pounds more today than 25 years ago and their population has more than doubled in recent years because there are more seals to feast on.
    Climate change is a phony threat foisted on us by political elites that have an agenda different than the “real folks” who buy F-150s. Lloyd

     
    1. Misterchipster

      Lloyd, I often don’t agree with you but on this issue I believe you hit the nail on the head. Electric has it’s place but we do not have the infrastructure or the will to make the the change at the speed many would like to see. Enter Uncle Sam with massive redistribution of wealth and a few will profit but most will lose. Many users would be better served with electric in the “local” sense, multiple short runs would be a panacea for it’s use, a family road trip, not so great. Maybe a hybrid would be a possibility.
      The carbon footprint of electric is seldom discussed in accurate detail. When its total life cycle carbon cost is added up we are only kicking the can down the road and leaving even more toxic residues behind. Keep government out and promote free enterprise and we will find a way to be more responsible with our environment with cost effectiveness.
      Show me one thing that the government got involved in that is a success and you may have a foothold in this debate. Until then follow the money and you will know what and where the real motivator is.

       
      1. Jay Sauder

        I would really like to mention a few things that the government did but you said only one, so here it is;
        The internet, would we have the internet if the government had not funded it from the get-go. There are many good books written on this and if you study history you will find your answer.
        Here’s a link to get started;
        https://en.wikipedia.org/wiki/History_of_the_Internet

        Best,
        Jay

         
    2. Jay Sauder

      Lloyd, would you please check on the status of the ice melt in the Arctic and let me know if there are any changes since record keeping began.
      And if there are any reductions, how soon can we expect it to be restored after this short, normal, warm snap? Without having any change in sea level of course……..
      Please, just please, do the math on the cubic feet of ice left and tell me happens if it melts.
      Thank you for your attention to this matter!
      Best,
      Jay

       
  3. Jay Sauder

    A gallon of gasoline weighs 6.3LBS. How much does it weigh after it is burned? The answer: 20 pounds.
    If you think about it, if you burn billions of tons of carbon over a century and expect nothing to happen, I truly question your ability to do math.
    Insanity is doing the same thing over and over and expecting different results.

    This link explains the petrol question above;
    https://www.fueleconomy.gov/feg/contentincludes/co2_inc.htm#:~:text=It%20seems%20impossible%20that%20a,the%20oxygen%20in%20the%20air

    I burned coal to heat my home a few years ago and then switched to natural gas. With coal I produced 14 tons of carbon per winter and now only 6 tons with gas. Lesser of 2 evils.

    Anyway, I purchased my first Tesla and I will tell you my wife and I will never buy another petrol powered vehicle. It’s so simple and cheap to operate, it’s just stupid not too. Starting price of $35K (think Chevy Impala price range)
    Pros; to many to list
    Cons; have yet to find any

    I love to have dialog with electric car haters, it’s fun, LOL!
    Best Regards,
    Jay Sauder

     
    1. GK Lindstrom

      until they can be charged in the timeframe a petro car can be filled with fuel, the majority won’t embrace it. We use electric forklifts in our business, an 8 hour shift of use takes at least 4 hours to charge; hard to justify with multiple shifts.

       
      1. Jay Sauder

        I have 330 mile range and my family and myself need a potty break at least that often. This past weekend we went on a mini vacation and charged at a supercharger, it was amazing, we had 38 miles left in the battery and needed only a total of 80 miles to get home. In the first 5 minutes it whacked in 110 miles and by the time we got back to the car after a total of 10 minutes it had a total of 180 miles in!! It takes about 35 minutes to fill it completely as it has to slow it down in the last 20% of filling.
        Check out the new Carbon / Aluminum battery tech, that’s really where the future is…..
        Best,
        Jay

         
  4. Lloyd Graff

    Honestly, Jay, I am intrigued by the Tesla. Elon Musk has done the impossible to build a good electric car that is cheap enough to buy partly because of Government subsidies while all the other car companies cannot make it happen. I can only laugh at VW and BMW that throw money at it and still cannot compete. If American builders truly commit to compete with Tesla or the Japanese we may get some real competition. They are lobbying for the juiciest subsidies. When they get them we will see if Ford’s 150 electric will be a real player. Lloyd

     
    1. Jay Sauder

      BTW, I didn’t receive any discounts, subsidies or tax refund for my Tesla purchase.
      Correct me if I’m wrong, but I believe Tesla received far less government money then the gas guzzling Big 3 did.
      Best,
      Jay

       
  5. Gordon Erickson

    How sure are we that generating power is actually that much more environmentally than running the car. Burning coal and diesel seems to be a zero sum game. Solar and wind don’t generate enough to get the job done. And wait til they kill those nuke plants…..

    There are plenty of gas stations, yet only a few chargers. There are a few chargers near me that have been broken for months. Getting outside about 100 miles from home will require some planning. I want to own a bar with 12 chargers in front of it for sure, to give people something to do for an hour while they wait to charge up.

    The vehicles have come a long way. If you are into cheesy cars like the volt, bolt, and model 3 you can easily afford the vehicle. If you like Caddys, Audis, and Merc’s, you wont find much under 100k. Models S is around 130, and Taycan 185, the benchmarks in my book.

    Now for the elephant in the room. When they laid out my street, I would bet the planners thought 200 amps per house would be plenty and sized the service to the street accordingly. On a hot summer day with all 3 refrigerators running and the AC cranking, who knows what else is on, and we all come home from work and plug in the superchargers at the same time, pushing every house draw close to capacity in every neighborhood. Yea, sounds like a great plan to me too. You can wait until late at night to turn it on, but I know a lot of people who cant even set the clock on their microwave.

    There is a place the the cars, but there are going to be some pitfalls too. I already see pictures of diesel generators on the side of the road charging cars, there is another business that will be worth starting.

    And, while we are bouncing around, has anything figured out what we are going to do with all the spent batteries.

     
  6. Lloyd+Graff

    Jay,
    Tesla received $518 million in regulatory credits in the first quarter of the year, the difference between profit and loss.
    Lloyd

     
    1. Jay Sauder

      Lloyd,
      I don’t mean to be a jerk (really, I having a great time writing these comments)
      Would you mind sharing a link to the source?
      Thanks,
      Jay

       
    2. Jerrold Levine

      And this $518 million number will shoot up when the Biden Administration increases the CAFE standard up to the proposed 55 mpg.

       
  7. Russ Ethridge

    Lloyd, I usually find your remarks cogent and accurate, but I think you got this one wrong. Yes, we are not as far along the alternative power generation highway as we need to be to answer the legitimate remarks made here by others, but change is inevitable, and electric vehicles may be just a stepping stone. The steam engine didn’t last very long, but it changed the world. Recovering and burning carbon is messy and expensive and will inevitably yield to something else. We are on the way to figuring that out. Ask carriage makers who became horseless carriage makers.
    The concern for the turned metal products industry is, perhaps, based on a fear that electric cars an a turn away from hydrocarbons may require less turned parts, but I see all other sorts of opportunities for the industry. Change is inevitable, and we prosper when it knocks.
    As far as climate change, I hardly think it is a political posture, ginned up by the moneyed elites for some nefarious reason you did not describe. If it was about “the money”, why does every other country embrace the concern, even China? The science IS overwhelming, and there really are no reputable contrary opinions, just varying degrees of concern. The climate changes we see today are vastly more dramatic and rapid than the well documented changes that have occurred over millennia, not decades. And as far as the government, sure there’s waste we hate and stuff we think is stupid. But private enterprise wouldn’t have built the interstate or provided rural electricity and clean water to millions. Governments worldwide provide infra structure and an organized business and social forums we all participate in. It is called civilization, and it takes some vig (taxes) from us to make it work. I don’t like where some of mine goes, but with 350 million people, you’re not going to agree with everything.

     
    1. Robert Ducanis

      Russ,
      I agree with much of what you say with the exception of China being concerned about global warming. Like most things, pay heed to what they do, not what they say. It is politically expedient for China to say that they are addressing global warming issues, while on the other hand, their true modus operandi is full-speed ahead on building massive fossil fuel plants.

      https://e360.yale.edu/features/despite-pledges-to-cut-emissions-china-goes-on-a-coal-spree

       
  8. Lloyd+Graff

    Hi Russ,
    I think you have bought the New York Times mythology about the 99% of scientists believe in the “existential threat” propaganda. I suggest you read the work of Bjorn Lomborg, the Danish climate scientist who has eritten extensively on the topic. I will send you some of his stuff.
    Yes, Governments have done some good things like Operation Warp Speed and Interstate Highway System but we all know how lazy and inept the burocracy is. Witness the current debacle in Afghanistan with no passports for yhe interpreters and only 3,000 of the 55,000 imigration lottery winners being processed this year with time running out next month for this year’s winners.
    My point with the piece was to get a conversation going on the current auto business. It appears I succeeded. Lloyd

     
  9. Lloyd+Graff

    One stock tip. Buy Generac Corp, the biggest maker of home generators. Stock has doubled lately but will keep going up as power failures become common. A decent chance Gavin Newsom who shut down the fossil and nuclear plants in California will be recalled.
    The stock goes up with every new fire in California. Delivery is several months out. It is a good play if you believe in climate change AND the failure of governments to deal with it properly.

     
  10. Al

    In the midwest there are now large diary operations that are building methane digesters connected to manure lagoons and connecting to natural gas pipelines. A very large investment, running miles of pipeline to connect these farms to the gas infrastructure. Capturing gas from something that is already there. Have to wait and see how it turns out long term, but must be fairly confident as there is a significant investment being made. Lots of F250 Fords and large Caterpillars at these sites as I drive by on the way to work. Not sure if this is private investment or public funded. But another energy source.

     
  11. Robert Ducanis

    Question to our esteemed engineers & physicists out there with regards to the electric vehicle vs. ICE engine cars.

    Can you calculate energy equivalents of gasoline consumed for transportation purposes in the USA vs. the amount of energy equivalent of electricity required to run those same vehicles if converted to electric? I’m not sure whether the measuring stick would be BTUs, Joules, Newtons, etc.

    Then can you convert the electricity draw on our current power grid to fuel those electric vehicles? If our ‘current’ system can accommodate the increased load demand, how much more fossil fuel will need to be burned to charge the electrical grid?

    If I remember the law of the conversation of energy, “Energy cannot be created nor destroyed”. It can only be converted into something else.

    I am a native and resident of Florida. I grew up without A/C in our house. It was hot during the summer. Without A/C, the population in Florida would be 1/10 of what it is today….same with a lot of other sunbelt states. It is ironic that we have to burn something to stay cool here in Florida. Temp is currently 90-degrees with a heat index of 101 as I type this. Cooler than yesterday! Heat index in August & September usually hovers around 113-degrees. Lots of humidity.

     
  12. Gloria

    The lease is expiring soon on my company car and I have decided to take the plunge and try a Hybrid version of Toyota RAV4. Incentives and mileage are the biggest reasons.

     
  13. Lloyd+Graff

    Gloria, probably a good choice. Lots of folks love RAV4 and Toyota is the best at hybrids. Go for it.

     

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