How EV makers are trying to appeal to the 'average consumer'

Autoblog Editor-in-Chief Greg Migliore joins Yahoo Finance to discuss what's next for Volvo as the company moves forward with an IPO in Stockholm, the news surrounding Rivian, and the future of the EV market.

Video transcript

BRIAN SOZZI: There continues to be a lot of action in the auto industry. Lucid is nearing the delivery of its first electric cars. Polestar is gearing up for an early 2022 IPO. And there could be a few more market debuts very soon.

Autoblog Editor-in-Chief Greg Migliore is here to break it all down. Greg, news out this morning from Volvo that it will, in fact, explore an IPO. What is the state of Volvo? Because I think back to when they were owned by Ford, they were known for their safety but really not a very cool brand.

GREG MIGLIORE: So I think in probably the decade since Volvo has progressed from Ford ownership to now, you know, Geely ownership, it looks like an IPO. They've really like reinforced a couple of areas like safety and, of course, design. They've done some things like, just from the details on the cars, to the interiors. You can actually get an orifice crystal shifter in a Volvo right now.

They've really tried to invest in the product. And now they're going to use this IPO, I think to really solidify their EV strategy and perhaps an autonomous strategy while also really reinforcing safety. Which is, when we think of Volvo, we always think of safety.

JULIE HYMAN: And I feel like also, Greg, that Volvo has kind of also built itself in recent years as a more luxury brand or, if not top tier luxury, sort of bottom end luxury. Bring us up to speed on their status in that front-- on that front. And also, you mentioned the EV strategy. Where do they fit into the EV pantheon at this point.

GREG MIGLIORE: So Volvo, I think, was probably like a relatively early adopter. You know they had some credible, relatively short-range electric vehicles and hybrids out in the middle part of the last decade. So they, you know-- they showed up at the party. They were ready to go before some other people.

Right now, we don't have, I would say, a tremendous like EV execution from them. And I think that's what we're going to see as they really transition to being much more electric as part of their overall strategy. You know, basically as, under Geely ownership, they've received some investment.

When they were under Ford, there was a lot of uncertainty. Ford was trying to unload Volvo as well as Jaguar and Land Rover, and some other brands. When they were sort of trying to grow their own international portfolio. And they sort of just kind of languished for a few years.

Geely ownership has been good for Volvo. They've really invested in the product the cars are better. They have a broader portfolio. Like I said, they've tried to make design definitely part of who they are, a bit of their calling card.

And I definitely think Volvo is in a better shape right now than they were 10 years ago. Would I say they're cool? Probably not. But it's definitely something that's a different kind of unique offering as opposed to some of the more traditional premium brands.

BRIAN SOZZI: Well, Greg, to me, a crystal shifter is pretty cool. A lot better than the leather one I have in my Infinity here. But switching gears here, no pun intended, Rivian, a lot of focus this morning on what they reported over the weekend in their S1. Lost nearly a billion dollars through the first six months of the year. Is there just too much hype around Rivian?

GREG MIGLIORE: Oh, that's a great question. I was going through that-- those IPO documents, and there's a lot to unpack there. There's some, I'd say some definitely like strong KPIs for them. They have like almost 48,000 preorders or orders however you want to count them. So there's a big interest in the brand.

They have a contract with Amazon, which is generally a good thing if you're trying to do business and sell things right now. It's not an exclusive contract. So it's probably better for Amazon than it really is for Rivian but nonetheless, some stability for them.

And then they're going to try to roll out an electric truck and an electric SUV. Which are really going to be like luxury models for Rivian. This is where you're going to try to capture some of the people who might cross-shop this with, say, the Tesla cybertruck, perhaps a Lucid vehicle. It's really the EV as a luxury instrument. And I think they have a chance to be successful.

It's interesting you ask that question, though. I've been kind of pondering this for almost like a year because a lot of people said: why is Rivian the brand with like the secret sauce that like Amazon is interested into, and some other automakers we're looking to partner with them for a while? I don't know. I think if people are talking about you like this, you're doing something right. So we'll see. I mean, the products do look compelling.

JULIE HYMAN: Greg, I want to ask you a bigger question about EV demand, because, you know, we're talking about all of these new EV entrants. We're talking about-- we were talking in the last hour about General Motors and its electric aspirations. But I think Sozzi brought up a good point when he talked about being at that car show this weekend.

And the trend, particularly on the truck side and on the pickup truck side is bigger, honking vehicles that guzzle a lot of gas or diesel, even, in many cases, that are really souped-up. And I just have to wonder how much the car industry is going to come up trying to cram something down consumers' throats that they don't actually want. And you cover cars. That's all you do. I mean, how are you thinking about that question?

GREG MIGLIORE: Right now, I think luxury is sort of the selling for a number of these electric vehicle offerings. It's a selling point. I just test drove the electric Hummer. And it's the truck version, they're also going to build an SUV version of it. And it was pretty amazing, but it's going to cost over $112,000.

But for that much money, you get like 1,000 horsepower. So there's definitely going to be performance. The screens are enormous inside it. It's really an amazing vehicle, let me put it that way.

And I think you're going to see like the Hummer, the truck face-off against Rivian's R1T. We have an article on our site today about the Super truck wars. And I think that's how you're going to have to try to play it. As some of these, whether it's a new automaker or a traditional automaker, you really have to play up the gee-whiz aspect of it. Because--

JULIE HYMAN: But Greg, who's the customer for that $112,000 Hummer? Like who's going to buy that thing and how many people are there out there?

GREG MIGLIORE: Well, it's obviously very well-heeled affluent people who want to invest in the technology. I think what you're trying to capture is almost like the traditional Tesla buyer. Somebody who wants to be different and really is an early adopter.

At this point, if you're an early adopter of EVs, the world is your oyster. You know Ford, General Motors, Rivian, Tesla, they're all making something for you. And you probably could get a nice little tax break for it. You might get some incentives from your local utility company to install a charger in your house. It really is good right now if you're an EV buyer, perhaps with some means, to go out and get what you want.

The trick, what you said, Julie, is how do you get this to your average consumer who maybe wants to spend about $40,000. The average price of a new vehicle in the United States right now is like $41,000, I think. You've really got to get into that sweet spot.

And you're seeing, you know, Tesla has been there a little bit. The Chevy Bolt is there, problem is that the Chevy Bolt right now is being completely recalled. So there's a lot of growing pains. I think Ford's mach-e really hits a sweet spot because it's like a performance crossover, and it's priced in that $30,000 to $40,000 range depending on what kind of model you want to go for. Volkswagen with the ID 4 is there. So there's also some offerings, sort of from mainstream consumers.

The trick, I think, is also awareness infrastructure, and you know people have to want to buy them. And that's something that I don't think automakers have the answer for, and I don't either. You know, it's just going to be a very large shift from where we've been for the last 120 years.

BRIAN SOZZI: Greg, we-- last late last week, we talked to Alec Gores, who's backing the upcoming Polestar SPAC and IPO. He made a very important point on why he's-- among many reasons why he's bullish on that company because it is backed by Volvo. It has a lot of infrastructure already in place. How serious do you think a Polestar is in the industry?

GREG MIGLIORE: I think Polestar actually really delivers an interesting value not only to consumers, but also investors and even sort of their parent Volvo, and ergo Geely, Because. It's different. Polestar used to be the performance brand of Volvo. They used it in racing for years and years. It's cool, it's different.

You perhaps might say, hey, I don't know if I want to be a Volvo customer. You know, maybe it's not quite premium enough for me, or maybe, it's a little too expensive. But then you come see a Polestar, and you say, well, hey, what's that? I remember some of those great rally wins and things like that. I remember some of the special edition Polestar models.

They look different. They have really, you know, intriguing performance options. And it's just sort of like-- like it goes into that white space of you're not even maybe necessarily sure what it is.

And if you do know what it is, you like the history, you like the heritage, you like the performance. But if you're new to it, you just say, well, hey, what's that? That sounds interesting to me. And I think there's a tremendous upside for them.

I'm actually going to test drive a Polestar 2 tomorrow. So very excited about that, not sure what to expect. But, you know, we'll see. I think that's just kind of how a lot of people are with Polestar.

BRIAN SOZZI: Well, for what it's worth, Greg, I'm sticking with my gas-guzzling 1991 Trans Am. We'll leave it there. Autoblog Editor-in-Chief Greg Migliore, always good to see you, bud.