Mach E — Blog — Healy Chen

The price is wrong

Honda has (finally?) launched a fully electric vehicle for the North American market: the Honda Prologue. As expected, the Prologue is a mid-size SUV thing - the most popular type of vehicle in the States - designed to haul people and stuff. The layman would not know that this all-electric Honda is co-developed with General Motors. Not quite a re-badge, but it’s definitely a GM car with Honda window dressing on top.

Not that in it of itself is a bad thing. What Toyota has done with the Supra - essentially a re-styled BMW Z4 roadster - seems to have worked (and continues to work) just fine. I see plenty of Supras on the road, driven by guys who look a bit too young to be able to afford a $60,000 sports car.

The main problem I see with the Honda Prologue is that it is too expensive. The poverty FWD trim level starts at $48,795. For the AWD trim with some bells and whistles that most people would want, you’re looking at well into the $50,000 mark. Worse: as of writing, the Honda Prologue does not quality for the Federal EV tax credit ($7,500). I would bet only the true die-hard Honda fans would buy one of these over a Tesla Model Y (low $40,000s after tax incentives). That, or Honda will have to heavily discount the Prologue.

The Model Y has another advantage: buyers don’t have to beg some asshole at a dealership to take their money.

To be competitive, I think the Honda Prologue needs to start the high $30,000s. Because that’s what a gas engine equivalent - the Honda Pilot - starts at. Honda can’t charge an EV premium for what is a mass-market product, because that would simply drive buyers towards Tesla. Ford found out about this with its electric Mach E SUV. The problem is that Honda - GM, really - cannot build the Prologue cheap enough to sell in the $30,000s. Meanwhile, Tesla can produce Model 3 sedans and sell profitably in the high $30,000s all day long. It’s a competitive advantage that’s evident in the sheer amount of Model 3s and Model Ys we see on the road.

The first legacy automaker to market with an all-electric mid-size SUV selling in the $30,000s will be the one to take a chunk out of Tesla.

Don't buy used

Word on the street is that Ford has (again) lowered pricing on its Mustang Mach E electric car. The base real-wheel drive version can now be had for (just) under $40,000. Ford is also throwing in $7,500 on leases. Combining with the federal EV tax credit of another $7,500 makes the base Mach E a highly attractive option if you just need a simple electric runabout. I would consider one if I actually needed a car.

And because I wouldn’t want to buy a used electric vehicle. You simply cannot trust it. The thing no one seems to be talking about is battery degradation. Much like the battery in our smartphones, the cells in electric cars degrade with use and time. But how much it degrades does not scale linearly with mileage. Depending on the usage pattern - how often it’s charged, how fast, to what level, etc - an EV with 50,000 miles can potentially have a healthier battery than a 20,000 miler.

This is a critical piece of information in electric vehicles because the battery is everything. A degraded battery cannot motivate the car to the same number of miles as new on once charge. At least with a combustion car you can expect the same range in a high-mileage gas engine.

The problem is we have no way of knowing about battery degradation. The electric cars (currently) don’t show the health percentage (our smartphones do). Venturing into the vast menu of a Tesla Model 3 doesn’t reveal this information. I think manufacturers should include battery health indicators, plus showing how much maximum range has been lost as well. As I said, range in an electric car is everything.