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U.S. EV adoption is happening faster than anticipated U.S. EV adoption is happening faster than anticipated

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U.S. EV adoption is happening faster than anticipated

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EV adoption in the U.S. happening much faster than anticipated, according to an observation of research by Recurrent Auto which is focused on providing transparency and confidence in pre-owned EV transactions. The research directly contradicts and challenges a statement by Jack Hollis, the executive vice president of sales at Toyota Motor North America.

According to Hollis, consumer demand isn’t sufficient enough for the mass adoption of battery electric vehicles to develop as fast as everyone would like. He added that battery electric vehicles cost too much and that the infrastructure isn’t ready for recharging the batteries away from home.

“I don’t think the market is ready. I don’t think the infrastructure is ready. And even if you were ready to purchase one, and if you could afford it … they’re still too high,” Hollis said.

Recurrent Auto: EV adoption is happening faster than expected

In an interview with Teslarati, Recurrent CEO, Scott Case shared an observation of a study by Boston Consulting Group (BCG) which has released a market projection for EV adoption annually since 2018.

Scott told me that Recurrent noticed that BCG repeated the same analysis four times since 2018 and has gotten it wrong each time.

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“What we’ve seen every time they’ve done this is that they’ve just missed their forecast and gotten too low every single time.”

He said what was really interesting was that they were seeing BCG’s forecast and noticed that despite having all of the data and models, they’ve been “systematically under forecasting how fast the EV adoption is going to happen.”

 

Credit: Recurrent Auto

The graph above shows how the EV sales projection for 2030 by BCG changed each time it released a report. According to BCG, EV sales projections in the U.S. for 2030 continued to grow to:

  • 21% in the 2018 report
  • 26% in the 2020 report
  • 42% in the 2021 report
  • 53% in the 2022 report

What Scott and the team at Recurrent found strange was that in the course of four years, the U.S. EV sales projections for 2030 more than doubled growing from an estimated 21% to 53%.

Scott pointed out that BCG isn’t the only company that has consistently missed how quickly the auto market is transitioning.

“The market adoption is just happening faster than any moment in the past. This is not about when we get to complete it, or what the numbers have been already. It’s what the best industry experts are forecasting about how fast this is going to happen.”

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“We still have eight years between now and 2030. How many more times is this going to get forecasted? Eventually, they will get it right because we’ll be in 2030 and we’ll know exactly how many cars were sold that are EVs versus combustion engines. But there’s clearly only one direction that this adoption forecast is going.”

3 Major Factors

Scott went over the three major factors BCG uses in its model.

“First, it’s what are the projections for battery prices? This is a huge component of the cost of EVs. Second, is what the vehicle selection looks like and how many automakers are adopting different models. And the third is government policy changes. When you think about those three factors and over the course of the 2018-2022 models, you can sort of understand what’s been changing.”

Scott added that there was a 97% cost reduction in lithium-ion battery prices over the past three decades up to 2018.

“Since 2018, the decrease in cost flattened out, and even over the last year, it increased somewhat because of the supply chain difficulties and global issues. That’s not what was going on in this model. It’s not the battery price changes that are causing this forecast.”

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“I think what you’re seeing over the course of this four-year period is the second factor. It’s vehicle selection and it translates into how many automakers are adopting and adding vehicles to their fleet. That’s a function of how automakers understand what consumers want to buy. I would say that this is a true reflection of market demand and not any government policy whether it’s a ban or a tax credit.”

Scott pointed out that next year, the Tesla Model Y will be the global best-selling vehicle without any help from any tax credit.

“You know what car it’s knocking off? It’s the Toyota Camry.”

One thing that BCG’s 2022 forecast did not include was the impacts of the Inflation Reduction Act which was signed just last month. Another thing not reflected in the 2022 forecast was California’s proposed ban on the sale of gasoline vehicles in 2034.

“California just passed the total ban on new ICE sales in 2035. Washington State where I live has–it’s nonbinding but it’s a 2030 cut-off. I’m not sure either of those is actually going to be needed because I think that the market going to take care of the transition well before those sales projections happen.”

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“The most recent run of the BCG estimate was in the spring. They ran the model in the spring and published it in June. At that point, the Inflation Reduction Act was dead. Everyone thought the EV tax credit was dead and done. That doesn’t even reflect the impact of that. I would expect the next time that this model gets to run in 2023, you’ve got the impact of the EV tax credit which is a ten-year run, and the California gas car ban for 2035.”

He also said the bans will probably not be needed due to how fast the market is transitioning to EVs before they take effect. The forecast will most likely be even higher once they account for tax credits and the changing government policies.

“There’s room to grow here.”

Note: Johnna is a Tesla shareholder and supports its mission. 

Your feedback is important. If you have any comments, concerns, or see a typo, you can email me at johnna@teslarati.com. You can also reach me on Twitter @JohnnaCrider1

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Tesla Semi fleet from Frito-Lay gets more charging at Bakersfield factory

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Tesla Semis showcased at Frito-Lay plant in Modesto, CA
Frito-Lay transformed its Modesto, Calif., site by replacing diesel fleet assets with ZE and NZE alternatives and installing fueling and charging infrastructure for the new fleet as well as on-site renewable energy generation and storage.

Among the several companies that have had the opportunity to add Tesla Semi all-electric Class 8 trucks to their fleets earlier than others, the most notable is arguably Frito-Lay, which has utilized the vehicle for a couple of years now.

However, as their fleet is making more local runs and there are undoubtedly plans to expand to more Semi units, the company has recognized it needs additional Megachargers to give juice to their trucks.

As a result, Frit-Lay decided to build more chargers at their Bakersfield, California facility, according to new permits filed by Tesla:

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There are already chargers at the company’s Modesto, California, factory, but Bakersfield is roughly three hours south of Modesto.

Interestingly, Tesla is calling the chargers “Semi Chargers” in the filing, potentially hinting that it is no longer referring to them as “Megachargers,” as they have been in the past. This is a relatively minor detail, but it is worth taking note of.

In 2022, Frito-Lay began installing these chargers in preparation for the Semi to become one of the company’s main logistics tools for deliveries in California and surrounding states.

Frito-Lay is not the only company that has chosen to utilize the Tesla Semi for these early “pilot” runs. PepsiCo has also been a company that has used the Semi very publicly over the past two years.

Additionally, the Tesla Semi participated in the Run on Less EV trucking study back in late 2023, where it managed to complete a 1,000-mile run in a single day:

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Tesla Semi logs 1,000-mile day in Run on Less EV trucking study

Tesla is planning to ramp production of the Semi late this year. On the Q4 2024 Earnings Call, VP of Vehicle Engineering Lars Moravy said the company would be focusing on the first builds of the Semi’s high-volume design late this year before ramping production in the early portion of 2026:

“We just closed out the Semi factory roof and walls last week in Reno, a schedule which is great with the weather. In Reno, you never know what’s going to happen. But we’re prepping for mechanical installation of all the equipment in the coming months. The first builds of the high-volume Semi design will come late this year in 2025 and begin ramping early in 2026.”

Tesla will build these units at a new Semi production facility located in Reno near its Gigafactory. The company is getting closer to finishing construction, as a drone video from this morning showed the facility is coming along at a good pace:

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Tesla Cybercab no longer using chase vehicles in Giga Texas

Elon Musk expects Tesla to produce about 2 million Cybercab units per year.

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Credit: Joe Tegtmeyer/X

The Tesla Cybercab is the company’s first vehicle that is designed solely for autonomous driving. And while the spacious two-seater is expected to start volume production in 2026, the vehicle’s development seems to be moving at a steady pace.

This was hinted at in recent images taken by a longtime Tesla watcher at the Giga Texas complex.

Tesla Cybercab Production

The Cybercab will likely be Tesla’s highest volume vehicle, with CEO Elon Musk stating during the company’s Q1 2025 All-Hands meeting that the robotaxi’s production line will resemble a high-speed consumer electronics line. Part of this is due to Tesla’s unboxed process, which should make the Cybercab easy to produce.

Elon Musk expects Tesla to produce about 2 million Cybercabs per year. And while the vehicle is expected to see volume production at Giga Texas next year, the CEO noted that the vehicle will be manufactured in more than one facility when it is fully ramped.

No More Chase Cars

While the Cybercab is not yet being produced, Tesla is evidently busy testing the vehicle’s fully autonomous driving system. This could be hinted at by the Cybercabs that have been spotted around the Giga Texas complex over the past months. Following last year’s We, Robot event, drone operators such as longtime Tesla watcher Joe Tegtmeyer have spotted Cybercabs being tested around the Giga Texas complex.

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At the time, videos from Giga Texas showed that the driverless Cybercabs were always accompanied by a manually driven Model 3 validation chase car. This was understandable considering that the Giga Texas complex features pedestrians, other cars, and construction areas. As per the drone operator in a recent post on social media platform X, however, Tesla seems to have stopped using chase cars for its Cybercab tests a few weeks ago.

Aggressive Tints

The reasons behind this alleged update are up for speculation, though it would not be surprising if the Cybercab’s autonomous driving system could now safely navigate the Gigafactory Texas complex on its own. Interestingly enough, the Cybercabs that were recently photographed by the drone operator featured very aggressive tint, making it almost impossible to make out the interior of the robotaxi.

This is quite interesting as other Cybercabs that have been spotted around Giga Texas were only equipped with semi-dark tints. One such vehicle that was spotted in February was even speculated to be fitted with an apparent steering wheel.

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Tesla reiterates FSD’s biggest advantage, even if it’s still Supervised

Even in its current Supervised state, FSD is already pretty life-changing.

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Tesla FSD Unsupervised Giga Texas
Credit: Tesla AI/X

Tesla Full Self Driving (FSD) has a ton of potential. Once it is rolled out as an Unsupervised system, it could change the transportation sector. But even in its current Supervised state, FSD is already pretty life-changing.

This was highlighted recently by the electric vehicle maker through its official Tesla account on social media platform X.

Tesla FSD Unsupervised

Tesla’s self-driving aspirations are expected to come to fruition with the release of FSD Unsupervised, which is currently already being used in the Fremont Factory and Giga Texas. With FSD Unsupervised, Teslas are able to navigate from the end of their production lines to the facilities’ outbound lots without a human driver.

Tesla has previously noted that FSD Unsupervised should see its initial release in Texas and California this year. As noted by Tesla in a post on X, autonomy, when deployed at scale, does not just make cities more livable. It also gives back time to people. This is what makes autonomous driving systems potentially world-changing. 

Still Supervised, But Already Useful

FSD today, however, is still Supervised, which means that it still requires constant attention from the driver. This is one of the main points of criticism from Tesla skeptics, as FSD’s current Supervised nature is typically used to argue that it is no better than other adaptive cruise control systems that other carmakers offer. As per Tesla in a follow-up post, however, FSD Supervised already makes life easier. 

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This is because FSD Supervised works on inner city roads, and while the driver is still observing the car to ensure that it operates well, trips could easily become a lot less tiring. This is especially true for long trips, which could take a toll on the driver if vehicles are driven manually.

“You can get a glimpse of that today: although FSD Supervised currently does require your supervision, you will still notice that your commute or long drives are suddenly so much less taxing. No constant micro-adjustments in rush hour traffic. No frustration. Car does it all for you,” Tesla wrote in its post on X.

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