#202 What are the impediments to the mass adoption of electric vehicles. More information, including show notes, can be found here. Episode Summary Over the past few months David has been traveling across the country and throughout the trip, he’s covered thousands of highway miles and seen countless vehicles. This inspired him to ask the question, “Will my next car be electric?” On this episode of Money For the Rest of Us he outlines how the vehicle market is changing, the benefits of electric vehicles over gasoline-powered vehicles, main factors prohibiting widespread adoption of electric vehicles, and the impact governments can have on consumer buying decisions. Conversations behind renewable energy and reliable transportation abound, and you’ll want to listen to this episode for the latest information on this heated debate. Cars are changing: they’re safer, but we’re purchasing less of them In 2017 there were 40,109 reported motor vehicle deaths, down 1% from 2016 figures. The number of deaths per 100 million vehicle miles traveled has been on a downward trend for decades. This is due in part to enhanced motor vehicle safety laws but also refined manufacturing techniques. Cars are getting safer! However, consumers are purchasing fewer vehicles than in years past. Vehicle sales peaked at 17.9 million for the year ending in March 2018, compared to 18 million in the prior year. In 2017 electric vehicles surpassed 1% of the entire market – a nominal figure compared to future projections of 25% of the market being comprised of electric vehicles by 2040. Electric cars are extremely efficient compared to gasoline-powered vehicles Perhaps the most common argument in support of electric vehicles is their efficiency. Popular models such as the Ford Focus Electric and Chevy Volt top the list of efficiency on a kilowatt-hour (kWh) to miles per gallon (MPG) scale comparison. These two models boast 19-20 kWh used per 100 kilometers driven. Conversely, a traditional gasoline-powered vehicle that achieves 20 MPG efficiency requires 131 kWh of energy to travel 100 kilometers. As the world moves towards cleaner, greener, and more renewable sources of energy, efficiency will become an even more important factor in the debate. What’s preventing electric vehicles from being widely adopted? Since electric vehicles are far more efficient than their fossil-fuel powered counterparts, what’s preventing their widespread adoption? David outlines 4 main reasons on this episode of Money For the Rest of Us: High upfront cost Cost of battery Production limitations Limited infrastructure for charging stations New electric vehicles start at around $30,000 and only go up from there. While battery costs are down from $1,000 per kWh of storage to $200, the cost is still prohibitive for many consumers. Battery replacement (while extremely uncommon) could have a price tag of over $5,000. Production lines are currently unable to mass produce electric vehicles at scale, which is an issue that must be corrected if the vehicles are to have a mainstream place on our highways. Finally, drivers must have reliable and widespread charging stations at home, work, and travel destinations in order for electric vehicles to be convenient. How governments can encourage consumers to focus on electric vehicles for their next car purchase Putting data and costs aside, one of the biggest questions David poses on this episode is, “Do consumers want electric cars?” There are many differences between traditional and electric vehicles that consumers will have to adjust to, such as the lack of engine noise, differences in braking, charging routines, etc. For example, David explains that even though the Chinese government offers financial incentives to purchase electric vehicles, consumers are still more interested in gasoline-powered SUV-style vehicles. Countries such as Norway, India, France, and the UK are all making progress towards mandating electric vehicles, and legislation can encourage manufacturers to pursue cheaper and faster production methods. Electric vehicles are here to stay, now it’s a matter of determining how many of them and for how much. Episode Chronology [0:35] David asks the question, “Will your next car be electric?” [4:18] Why are cars safer? [6:44] Cars are changing [7:39] What’s preventing electric vehicles from becoming widely adopted? [22:43] Do consumers want electric cars? [26:58] Government policy can encourage or prohibit adoption of electric vehicles See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

#200 Joshua Sheats from the Radical Personal Finance podcast and I discuss our different views regarding the national debt and the severity of the U.S. government fiscal situation. More information, including show notes, can be found here. Episode Summary Navigating a housing bubble is often on everyone’s minds. With changing family needs, balancing multiple incomes, and varying environmental factors, finding a great house is a struggle most families face. On this episode of Money For the Rest of Us, David responds to a listener’s question of how to navigate a housing bubble. He explains the idea of “economic gravity,” outlines factors that are influencing the global housing market, and offers solutions to the housing bubble crisis. A housing bubble cannot break free from economic gravity David discusses the idea of “economic gravity” on this episode. Simply, over the long-term housing prices can’t be disconnected from the ability of households to service a level of mortgage debt – to successfully make those payments every month. Nobel prize-winning economist Milton Friedman explains, “When (corporate) earnings are exceptionally high, they don’t just keep booming – they can’t break loose from economic gravity.” The same concept applies to home prices. When prices are high, they can boom for an exceptionally long time. But they cannot break free from this underlying economic concept. Factors that are driving up the global housing market Housing bubbles are being created across the globe because of a few major factors. Low interest rates, offshore demand for domestic property, influxes in immigration, and interest only loans are all contributing factors to the housing bubble discussed in this episode of Money for the Rest of Us. David draws many parallels between the US housing market and those in Australia and Canada. Housing markets don’t always align with growing family needs Joe, the Money For the Rest of Us listener that submitted the question for this episode, is seeking different housing for his family as it grows and shifts. But he’s finding that unfortunately, housing markets don’t always align with growing family needs. Better school districts, larger homes, easier commutes, etc. are all factors that millions of Americans are seeking for their prospective homes. David encourages listeners to consider what type of housing their family can reasonably afford and still maintain the type of lifestyle they desire. You never want to purchase a house that you cannot comfortably afford. To hear more about the housing market in the US today, data on current housing prices across the country, and even more great information, don’t miss this episode. 3 ways you can respond to rising house prices After considering all the data related to the housing bubble and overall market in your area, you essentially have 3 options: You can stay put You can move to a cheaper locale You can buy, while being patient and prudent In order to make the most of the housing opportunities for your family, David encourages every listener to consider their personal affordability and examine their ability to handle unforeseen financial stress (loss of a job, medical emergencies, etc.) Navigating a housing bubble is challenging, but this episode of Money For the Rest of Us can help you make sense of all the angles. Be sure to listen. Episode Chronology [1:05] A listener poses a question about how to handle a housing bubble in his area [6:47] Current data on the American and international housing bubbles [10:02] Is the current housing bubble starting to break? [10:57] What factors are driving the home prices in Australia, for example? [12:41] Comparing the Canadian housing bubble to Australia’s [15:45] So what should you do during a housing bubble? [18:09] Housing markets don’t always align with growing family needs [21:36] How to combat the factors driving up housing prices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.