Column: Automotive News Congress themes: EVs, election season and the China threat

Electric vehicles, the presidential election and China were persistent — and intertwined — themes at the Automotive News Congress this year at M1 Concourse in Pontiac, Mich.

Volkswagen Group of America CEO Pablo Di Si is excited about the ID Buzz electric minivan coming out this fall. But he is wary of government mandates for EVs.

While he acknowledges carbon emissions need to be reduced to keep the planet from overheating any further, he doesn't like the idea of governments seeing only one technology — EVs — as the solution. He suggested there could be other routes to progress, such as improving the manufacturing process.

For now, he's carrying on with routine operations while holding off on strategic actions until he sees the November election outcome.

"We're going to comply with the rules of the country," Di Si said. "But am I going to make any decisions on huge investments right now? Obviously not."

The challenge of selling EVs came up several times throughout the day. Marin Gjaja, COO of Ford Model e, said there is such a huge gap in consumer perception of EVs' value compared with reality that it typically doesn't catch up until the third year of EV ownership.

That perception gap makes selling electric cars today difficult — no doubt. But it does kind of argue for the value of leasing.

Leasing eliminates the residual value risk, and unlocks Inflation Reduction Act tax credits that aren't limited by income or battery source. And then if a customer's experience tracks with Gjaja's expectations, there will be a lot more and better options for their second EV in three years.

Of course, that residual risk then sticks on the lessor — typically the brand's captive lender. And those risks can be substantial. "We've seen this movie before," warned Mike Stanton, CEO of the National Automobile Dealers Association, in a panel discussion about the evolution of retail.

Still, it seems like there's a great chance to cultivate loyal, repeat customers.

Gjaja said Model e's target customers have above-average incomes, a home with a garage and three vehicles in the family fleet. I couldn't help but comment that it sounds exactly like the classic profile of a new-car buyer.

This is the perfect use case at this point in EVs' evolution: Charge at home and use the EV for local trips — which is most of them. And you still have the other vehicles for road trips or whatever.

Carbon footprint goes down. Total savings goes up. Range anxiety goes away.

I asked Gjaja what it would mean if those typical new-car buyers added one EV to their family fleet. What type of a market share would we see? He estimated it would be more than 20 percent, which sounds quite plausible to me, if not low.

"The key is selling to customers who can charge in their garage overnight," said dealer Todd Szott, who has Stellantis and Toyota franchises in addition to a Ford store in Holly, Mich. "That's a pretty big segment, and I think that's our opportunity in the short term."

Of course, the outlook for EVs is not yet at 20 percent. And in fact, the outlook is incredibly murky, and it depends on who wins the presidential election.

The presumption is that Kamala Harris would be good for EVs, in that she would maintain the current policies, perhaps with some accommodations to the UAW and the automakers that employ its members.

A Donald Trump presidency presumably would not be as positive for EVs, and could be very good for big pickups and SUVs.

The consensus among the investor class is that Trump would eliminate consumer incentives on EVs from the Inflation Reduction Act. While he has said he doesn't think they're a good idea, he didn't zero out the previous EV incentive system when he was president before, so it's hard to say with certainty.

The thinking also was Trump would not interfere with the credits for EV makers — if for no other reason than that many of them are in states led by Republican governors who are eager to see those jobs come to fruition.

Trump is undeniably unpredictable. While he has suggested broad, steep tariffs on Chinese products, he has also suggested he would be eager to welcome Chinese automakers to invest in the U.S. and build EVs here. That sort of view is consistent with the historical approach to Asian rivals. When America in the '80s was frustrated with Japanese automakers gaining so much market share, they were encouraged to invest here, which they have done — and they currently employ more than 100,000 Americans. (The reality of that seems inexplicably lost on the politicians and unions that want to keep Nippon Steel from acquiring U.S. Steel, but that's another column for another day.)

The difference, though, between a 1982 Camry or Civic and a modern Chinese vehicle is their potential for data gathering.

It's in that context that the Commerce Department is proposing a ban on Chinese and Russian connected-car hardware and software. It will cause some headaches for purchasing and logistics teams, but it blocks a potential national security — and economic — threat in a way that doesn't violate trade policies with Mexico.

And it buys time for established automakers to figure out how to compete with Chinese rivals that, yes, enjoy great subsidies but also have learned a lot about making affordable, exciting EVs.

You may email Jamie Butters at [email protected].