The Best Electric Cars for Families in 2023

The Best Electric Cars for Families in 2023

Rivian R1S size

If you’re thinking about hauling the kids off to school with zero emissions, today’s EVs offer more range, faster charging and greater fuel savings. The best electric cars and SUVs for families are available in a wide range of options to meet your needs, and an even wider range of price points. These are the best electric crossovers and SUVs on sale in 2023, and the ones we’re looking forward to in 2024. 

Electric Crossover SUVs for Families

These electric crossover SUVs and full-size SUVs are the highest-rated, most-loved EVs for families today. Spaciousness, pricing, range and charging speeds vary from one electric model to another. We’ve also included NHTSA safety ratings if they’re available. Let us know which EVs you have your eye on!

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Tesla Model Y

Model Y pricing and range

The Model Y is the best-selling electric vehicle in America, however prices have increased over 20% since 2020. Although it’s known for autonomous driving, the full capability (known as FSD) is a $15,000 package.

Price: $65,990 to $84,990

Range: 303 to 330 miles

Charging (Public fast charger): can add 200 miles in 15 minutes

Passenger volume: 106 cubic feet

Cargo volume behind second row: 26.6 cubic feet

Total cargo volume: 72 cubic feet

NHTSA safety rating: 5 stars

See Model Y new and used listings.

Ford Mustang Mach-E

2023 Ford Mustang Mach-E pricing

Ford’s first serious EV is very popular among small families and speed freaks alike. If the Mustang brand has a special place in your heart, this just might be the EV for you. 

Price: $46,895 to $77,000+

Range: 211 to 314 miles of range

Charging (Public fast charger): can add 120 miles in 20 minutes

Passenger volume: 104.5 cubic feet

Cargo volume behind second row: 29.7 cubic feet

Total cargo volume: 59.7 cubic feet

Safety rating: IIHS Top Safety Pick

See Mustang Mach-E new and used listings.

Hyundai IONIQ 5

electric cars for families IONIQ 5
I was thrilled to drive this IONIQ 5 Limited AWD home. I can confirm that this electric car is great for families.

I can confidently say that the IONIQ 5 is a great family car, and that’s because my wife and I haul our own kiddo around in this segment-bending electric crossover with hot hatch flavors. The IONIQ 5 has won many awards, including Car and Driver’s 2022 EV of the Year.

Price: $40,925 to $57,400+

Range: 256 to 303 miles

Charging (Public fast charger): Adds 200 to 240 miles of range in 20 minutes

Passenger volume: 106.5 cubic feet

Cargo volume behind second row: 27.2 cubic feet

Total cargo volume: 59.3 cubic feet

Safety rating: Top Safety Pick Plus from IIHS

See Hyundai IONIQ 5 new and used listings.

Kia EV6

2023 Kia EV6 pricing and range

The spaceship-styled EV6 is Kia’s version of the Hyundai IONIQ 5, which shares the e-GMP electric powertrain. The Kia EV6 has slightly less passenger and cargo space than the Hyundai, but it’s better range and equally fast charging make it an obvious feature on this list of best electric cars for families. 

Price: $41,400 to $55,000+

Range: 274 to 310 miles

Charging (Public fast charger): Adds 200 to 240 miles of range in 20 minutes

Passenger volume: 103 cubic feet

Cargo volume behind second row: 24.4 cubic feet

Total cargo volume: 50.2 cubic feet

Safety ratingIn Europe, the EV6 earned 5 stars

See Kia EV6 new and used listings.

Volkswagen ID.4

2023 Volkswagen ID.4 Pricing and Range

Starting in late 2022, the ID.4 is now made in Tennessee. The newest American-made EV is equipped with decent range, okay charging, and a comfortable interior that’s designed for families. However, don’t expect Tesla-level infotainment. The ID.4 is best for those who are content with the simpler things in life.

Price: $38,790 to $55,000

Range: 208 to 275 miles

Charging (Public fast charger): Adds up to 190 miles of range in 30 minutes

Passenger volume: 99.9 cubic feet

Cargo volume behind second row: 30.3 cubic feet

Total cargo volume: 64.2 cubic feet

Safety ratingTop Safety Pick Plus

See Volkswagen ID.4 new and used listings.

Audi e-tron (Q4 and original e-tron)

Audi e-tron pricing and range

When the e-tron first debuted in 2019, it was ahead of its time. Today, the e-tron remains a solid choice for families with a large interior, acceptable range and average charging capabilities. The premium styling and interior comforts make up for what it might lack. The original larger e-tron has recently been joined by the Q4 e-tron crossover.

Price: $53,000 to $94,000

Range: 218 to 244 miles

Charging (Public fast charger): can add 135 miles in 35 minutes

Passenger volume: N/A (two rows)

Cargo volume behind second row: 28.5 cubic feet

Total cargo volume: 56.6 cubic feet

Safety ratingIIHS Top Safety Pick Plus

See Audi e-tron new and used listings.

Full-Size Electric SUVs in 2023

Where are all of the suburban-sized electric SUVs at? Unfortunately for larger families, large SUVs and minivans are not very aerodynamic, and therefore require larger battery packs to travel the same number of miles. As traditional and startup automakers ramp up their EV production, they’re increasingly left with no choice but to ration their batteries. The vast majority of EV automakers rely on battery manufacturers like Panasonic, LG and CATL to produce the batteries they need for their electric vehicles. If an automaker like Ford has signed supply contracts for X number of batteries, does it make sense for them to make 100,000 compact crossovers, or 20,000 full-size SUVs? 

However, it looks like electric full-size SUVs are coming due to popular demand. There are just two quite expensive options now, but others are nearing production soon.

If you’re open to plug-in hybrids, the Chrysler Pacifica PHEV is a great vehicle, if you can find one at a fair price.

Tesla Model X

2023 Tesla Model X

It’s not cheap, but the Model X is the most popular fully-electric three-row SUV today. With gull-wing doors and a massive glass roof, there’s no hiding the fact that the Tesla Model X is a luxury SUV.

Price: $120,990 to $150,000+

Range: 351 miles

Charging (Public fast charger): can add 200 miles in 15 minutes

Passenger volume: N/A (three rows)

Cargo volume behind second row: 42.5 cubic feet

Total cargo volume: 92.3 cubic feet

Safety rating: 5 stars from Euro NCAP

See Tesla Model X new and used listings.

Rivian R1S

Rivian R1S pricing and range

Rivian is just beginning to ramp up production and sales of the Rivian R1S, the full-size electric SUV companion to the R1T electric truck. The R1S is a blend of luxury and off-road capability. 

Price: Starting at $91,000

Range: 316 miles

Charging (Public fast charger): can add 140 miles in 20 minutes

Passenger volume: N/A (three-row SUV)

Cargo volume behind second row: N/A

Total cargo volume: 88.2 cubic feet

Safety rating: N/A

Learn more about the Rivian R1S.

VinFast VF9 (Beginning US sales in 2023)

vinfast vf9

This three-row SUV has a starting price nearly $30,000 below the electric competition in this segment. VinFast is building a massive factory to build EVs in North Carolina. There’s a catch: Batteries are sold separately. VinFast offers two battery subscription plans. The VF9 also has a smaller sibling, the VF8.

Price: Starting at $55,500 + battery subscription

Range: 262 to 369 miles

Charging (Public fast charger):

Passenger volume: N/A (three-row SUV)

Cargo volume behind second row:  N/A

Total cargo volume: N/A

NHTSA safety rating: N/A

Learn more about the VinFast VF9.

Coming in 2024

Kia EV9 update
Kia EV9 in testing

The Hyundai IONIQ 7 will be Hyundai’s first three-row electric SUV. It will be joined by Kia’s version, the Kia EV9 electric SUV. Both of these should bring somewhat more affordable electric full-size SUVs to the American market. The IONIQ 7 and EV9 remain concept cars for now, with production details to be released this year.

NIO is a Chinese automaker very likely on a path to North American auto sales. With a corporate headquarters already open in California and US-market job postings, it’s all but certain. The NIO ES8 is a three-row electric SUV likely to make an American debut in 2024.

Electric Crossovers That Didn’t Make the List

2022 Chevrolet Bolt EUV

These EVs are great around town, but not recommended for family road trips.

Toyota bZ4X

With disappointing fast-charging capabilities, the bZ4X would be a real hassle on a road trip. The most capable all-wheel drive variant is rated at just 228 miles on a charge. That would be a non-issue if it wasn’t restricted to 100 kW at a DC fast charger. In the real world, the bZ4X and its sibling the Subaru Solterra would require 45 minute to hour-long charging stops every 175 miles or so on the interstate. That’s a lot of waiting around with a family! 

Weeks after deliveries began, all bZ4X electric crossovers were recalled due to the risk of the wheels literally falling off. See our full breakdown of the Toyota bZ4X here. With faster charging, it would be a much better option!

Subaru Solterra

The Solterra is the Subaru-branded sibling to the Toyota bZ4X. It’s essentially an electric Crosstrek. While standard all-wheel drive stays true to its Subaru roots, once again it’s the pitifully outdated charging capabilities that keep the Solterra off of our recommendations. Range is below average at 222 to 228 miles of range. It could be worth a look if you never hit the highway. Learn more about the Subaru Solterra.

Chevrolet Bolt

You’re probably starting to see what makes or breaks an EVs suitability for families. Range, safety, interior room and charging speed are all important. If you travel, range and charging speed matter a lot. If you plan to stick around home, you have many more affordable electric vehicles to consider. The Bolt really only fails in one of these categories, but it fails in a big way. The 2023 Chevrolet Bolt has the same 55 kW DC fast charging limitation as the original Bolt did way back in 2017. With 259 miles of range (that’s not bad!), that means you’d be stopping to charge for 45 minutes to an hour every 180 to 200 miles on a road trip. About 90% of EV charging is done at home on average, but the Bolt requires a lot of patience on road trips. We covered the 2023 Chevy Bolt in detail here.

Nissan Leaf

The Leaf was the first mainstream EV to go on sale in North America. It’s been a much-appreciated affordable option since 2011, but Nissan has failed to update the Leaf as competitors entered the scene. A top-of-the-line 2023 Nissan Leaf is rated for 212 miles on a charge, but the peak charging speed is outdated. In a best case scenario, it takes 40 minutes to add  175 miles of range. Plus, the Leaf has an outdated charge port style known as CHAdeMO. You’ll have to haul an adapter around with you to charge in public.

Will Electric Vehicles Get Cheaper in 2023?

It would be a welcome surprise if electric car prices dropped in 2023. Right now, EV prices are headed in the opposite direction. It seems like every week automakers from Tesla to Ford are announcing price increases for their electric models. In 2022, the average transaction price for an electric vehicle was $66,000, more than $11,000 higher than traditional vehicles. Fuel savings add up, but higher prices can bite into fuel and maintenance savings for years. See break even times for today’s most popular EVs.

Simply put, the more you drive, the quicker you will reach a break-even point with your EV purchase. If you drive less than 10,000 miles per year, going electric just doesn’t make sense right now when it comes to cost. However, it sure is great eliminating tailpipe emissions.

A new analysis by iSeeCars finds that used electric car prices are rising much faster than their combustion counterparts. The report finds that EV prices are up 54% year-over-year. ICE vehicles were up 10.1% during that same period. There are more signs that used car prices are beginning to drop, but it’s within the realm of possibility that EV and PHEV prices will remain elevated even as the overall used car market softens. People are scrambling to buy EVs, and demand continues to exceed supply.

The New EV Tax Credit Helps Some, But Not All

The Inflation Reduction Act of 2022 eliminated the original EV tax credit and replaced it with a completely revised tax credit. For vehicles that qualify, up to $7,500 in tax credits are available. However, the incentive is based on battery sourcing, which will be determined by the automakers. Income limits restrict buyer eligibility, too. See the full details on qualifying models here

There’s also a used EV tax credit for the first time, but a price cap of $25,000 eliminates every single family EV on this list. See what does qualify.

Generous state and local incentives may make the switch to an EV much more affordable, depending on where you live. See the most generous state-level EV incentives, and check with the DSIRE clean energy incentive database to find more incentives for your specific location.

Which family-size electric car are you considering? Let us know in the comments, or better yet join the conversation at our CarEdge Community forum.

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Electric Car Prices Are Rising Faster Than ICE Cars

Electric Car Prices Are Rising Faster Than ICE Cars

In 2019, market analysis and research firm Deloitte predicted that electric vehicles would reach price parity with combustion-powered counterparts in 2022. One year later, General Motors Chief Technology Officer Matt Tsien shared his optimism about EV prices. Cost parity between EVs and conventionally powered vehicles “will come sooner than many people think,” he said during a keynote speech at a Society of Automotive Analysts event. Skip forward to the second half of 2022, and EV prices are running away from ICE cars. The latest analysis from iSeeCars.com reveals just how much more expensive used EVs are, and recent MSRP hikes are driving new EV prices even higher. 

Used Electric Car Prices Up 54.3% In One Year

Used car prices are dropping rapidly at the wholesale level, however buyers have yet to see any significant price drops at the retail level. Over the past eight weeks, used car prices have dropped nearly 5 percent at dealer auctions. Could the car price bubble be finally coming to an end? If you’re in the market for an electric vehicle or plug-in hybrid, we’re far from it. 

According to data from iSeeCars, used electric car prices saw an increase of 54.3% from July of 2021 to July 2022. Over the same period, gas-powered cars were up just 10.1%. Number crunchers at iSeeCars analyzed the prices of over 13.8 million 1-5 year old used cars sold between January and July of 2021 and 2022 to determine the price growth of electric cars compared to ICE vehicles.

Source: iSeeCars.com

As gas prices reached new records this spring, the demand for EVs rose in parallel. However, a closer look at the data reveals that the few affordable electric cars on the market saw the greatest price increases, and by a long shot. 

At a time when the average EV transaction price is over $66,000, the future of electric mobility is riding on the success of more affordable options. The number of sub-$40,000 EVs seems to be shrinking by the day. 

Are Affordable EVs Going Extinct? It Appears So

iSeeCars found that America’s two most affordable electric cars saw prices increase the most. Used Chevrolet Bolt prices were up 29.3% since 2021, and used Nissan Leaf prices were up 45%. For the Leaf (which starts at $27,800 new), this massive price spike translates to an average sale price of $28,787 in July 2022. The average used Chevy Bolt sold for $28,291 last month. Considering the specs of the Bolt (notably charging capabilities), that’s a lot of money for a used EV.

With DC fast charging times typically around 45 minutes to one hour to add 200 miles of range, both of these electric models are likely to see drastic depreciation as much faster charging EVs become more commonplace. This is especially true for the Leaf, which lacks the decent range of the Bolt.

Source: iSeeCars.com

The Kia Niro EV seems to be the outlier here. With 239 miles of EPA-rated range and 77 kilowatt DC fast charging capability, it almost seems like a good deal with used Niro EV prices ‘only’ increasing 15.7% year-over-year. At the time of writing, used Kia Niro EVs are priced between $35,000 and $43,000.

Another Day, Another EV Price Hike

New electric vehicles are seeing price hikes, too. Just last week, Ford announced that the 2023 Mustang Mach-E was getting a massive price increase. The base Select trim now starts at $48,195 (up $3,200). The rear-wheel drive option was eliminated, effectively canceling the most affordable Mustang Mach-E. The most popular trim, the Premium AWD Mustang Mach-E, now starts at $56,175 before the $1,300 destination fee. That’s a $6,075 increase from earlier in 2022.

When Ford reopened F-150 Lightning orders in August, the news was accompanied by a $6,000 to $8,500 price increase. The most affordable F-150 Lightning now starts at $46,974. Most buyers will want the XLT with extended range, and that option now starts at $80,974. Will Ford lower the price by $1,000 to qualify for the new EV tax credit? We’ll find out soon enough. 

Tesla prices are up over 20% since early 2021. The Model 3 is now 27% more expensive, and the most popular EV in America, the Model Y, now costs 30% more with a starting price of $65,990. Rivian made headlines when they canceled the most affordable configuration of the Rivian R1T electric truck. Anyone with basic math skills (or a calculator) can see that new and used EVs alike are becoming more expensive.

When Will EV Prices Go Down?

This right here is the question we’re all doing our best to answer. Still, it’s hard to tell. Here’s what needs to happen before EV prices will go down:

  • EV production and inventory must increase
  • For that to happen, supply chain constraints must ease
  • Battery suppliers must continue to meet demand
  • Automakers need to commit to affordable models rather than luxury EVs
  • More EV competition may drive prices down

Is there any good news? It depends on which EVs you’re interested in, and your buying timeline. The new EV tax credit is the first to ever offer a used EV tax credit and future rebate, however strict eligibility requirements for both are causing an uproar. For some, buying an EV may soon be thousands of dollars cheaper. For others, federal EV incentives vanished when President Biden signed the Inflation Reduction Act of 2022 into law. See which new EVs and used EVs qualify for the revised incentives. 

Want to stay informed about the latest EV pricing, ownership and development news? Join the CarEdge Community for free. Our Electric Vehicle forum is the place to be for EV discussion, advice and expert consultation!

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Every Electric Truck in Development, Plus a Few Already Here

Every Electric Truck in Development, Plus a Few Already Here

Electric trucks are few and far between on highways, but they’re all the rage online. There are fewer than 3,000 electric trucks on the road today, but at least 1.5 million reservations are in the books for upcoming electric truck models. Will trucks ever catch up to crossovers in the electrification of the auto industry? With how many models are in the development pipeline, it will be interesting to find out. Let’s take a look at every electric truck on the way, and the few you might catch a glimpse of in 2022.

Rivian R1T

The Rivian R1T electric pickup truck is available to order today

Introduced: Late 2021

Range: 314 miles

Fuel economy: 71 MPGe

Cost to charge 0 – 100% at home: $19

Price: $78,975 – $121,690

“It’s bigger than a Ford Ranger, smaller than a F-150, and a whole lot more expensive.”

The 2022 Rivian R1T is the most common electric truck on the road today, but that doesn’t mean it will be easy to find one. About 2,000 have been sold as of spring 2022. As is often the case, supply shortages (and inflation) have put a damper on the much-anticipated rollout of Rivian’s first model. 

Nevertheless, it’s a very capable truck. The R1T can tow more than 11,000 pounds and the pickup offers a payload capacity of 1760 pounds. And it’s fast, with a 0-60 time of 3.3 seconds. It’s a rugged, outdoorsy-themed truck for those who use their pickup for more play than work. If you’re in the market for one, get in line. If you’re lucky (and have a deep wallet), you just might take delivery of one by the end of 2023. Rivian prices recently jumped by $10,000 – $20,000, so don’t expect a Rivian for the original price of $69,000.

GMC Hummer EV

GMC Hummer EV

Introduced: Late 2021

Range: 329 miles

Fuel economy: 47 MPGe

Cost to charge 0 – 100% at home: $30

Price: $80,000 – $110,000+

“American excess at its finest….. and least efficient.”

If you would like a 9,000-pound, crab-walking mammoth of a truck that can seemingly overcome physics to reach 60 miles per hour in three seconds, General Motors has you covered. The revived Hummer is a large luxury truck meant to turn heads more than it’s meant to haul stuff to the worksite. 

The Hummer EV’s #1 party trick is the crab-walk. That’s when the truck turns using all four weeks, allowing it to slide through traffic. The EPA-rated range of 329 miles is a bit misleading. It has a MASSIVE 212 kilowatt-hour battery. That’s triple the capacity of most electric crossovers! While technically it starts around $80,000, used ones are already selling for a quarter of a million dollars

Ford F-150 Lightning

2022 Ford F-150 Lightning Lariat

Introduced: Late 2022

Range: 230 – 300 miles

Fuel economy: 68 MPGe

Cost to charge 0 – 100% at home: $14 – $20

Price: $39,974 – $90,874

“This will be the first mass-produced electric truck on the market, but we’re bracing for the dealer markups.”

We recently detailed all we know about the upcoming electric F-150 in a special CarEdge preview. It turns out that truck fans are REALLY looking forward to the Lightning. The question remains, can Ford make enough of them?

Here’s What Stands Out With the F-150 Lightning:

  • It’s the most powerful F-150 ever
  • You can power tools, other EVs and even your entire home with the truck
  • The Lightning looks normal, but features state-of-the-art technology
  • The front trunk is bigger than most regular trunks
  • Up to 320 miles of range, but mediocre charging speeds

Ford has 200,000 reservations in the books for the F-150 Lightning, so new orders can expect a 2024 delivery. If you’re patient, this just might be worth the wait. 

Here’s everything we know about the Ford F-150 Lightning.

Chevrolet Silverado EV

Silverado EV electric truck
2024 Silverado EV RST

Introduced: Spring 2023

Range: Up to 400 miles (depending on battery size/trim)

Cost to charge 0 – 100% at home: $28

Price: $39,900 – $80,000+

“It’s the direct competitor to the F-150 Lightning, but it will charge a LOT faster.”

When Ford made such a big deal with the unveiling of the F-150 Lightning, we all knew General Motors would be cooking up something special. The Chevrolet Silverado EV was unveiled at last, and the specs and looks have exceeded expectations. Chevy claims it has faster charging, more power, and more range than the Ford. 

It’s a flexible truck too, and one that’s definitely going to see some worksite use. The storage capacity of the 5-foot-11-inch bed can be extended to 9 feet with the ’available’ Multi-Flex Midgate. 

GM says that the new Silverado is basically a rolling generator, if you buy the required accessories. “When combined with the available accessory power bar, the Silverado EV’s PowerBase charging system offers up to 10 outlets, to provide a total of 10.2kW of all-electric power for countless worksite or recreational needs, including powering your home, with the required equipment.” It can even charge other electric vehicles!

Learn more about the Chevrolet Silverado EV in our in-depth analysis. 

Tesla Cybertruck

Tesla Cybertruck

Introduced: 2023

Range: Up to 400 miles

Price: Unavailable

“Did someone make a truck in Minecraft?!”

Ever since Tesla pulled the curtains back in November 2019, the world has divided into two camps: those who adore the Cybertruck’s angular, Mars-ready looks, and those who abhor it. No matter what your opinion is, it’s still just an idea for now. Tesla has repeatedly pushed back its arrival, and now says that 2023 will be the start of production. 

The Cybertruck will have 3,500 pounds of payload capacity, and can tow 14,000 pounds. Those specs are on another level for sure. It’s also a performance-oriented truck, with a 0-60 time of 2.9 seconds. Pricing had previously been announced to start at $40,000 for rear-wheel drive base variants, but that was later removed from the Tesla website. We expect pricing to range from $55,000 to over $80,000, but it’s pure speculation at this point. 

Toyota’s Electric Truck

Toyota electric truck

In late 2021, Toyota teased the above image of an electric truck. It closely resembles an electric Tacoma, which would be a dream come true for many Toyota fans. They haven’t said a word since, but we’ll update you with the latest once we know more. 

Ram 1500 Electric Truck

Ram 1500 electric truck

Stellantis has taken its sweet time getting into EVs. In 2024, the Ram 1500 electric truck will make a debut with a range of up to 500 miles and futuristic design cues. It will be capable of fast-charging, a quick 0-60 time, andthe latest tech from Stellantis.

The electric Ram 1500 will be built on the new STLA platform that is currently in development. More to come. 

GMC Sierra Electric Truck

GMC Sierra electric truck

They say it’s coming, but we don’t know much yet. The electric Sierra will share the same powertrain engineering as the Silverado EV.

“Like the GMC Hummer EV, the electric Sierra will be purposefully built on the Ultium Platform with the premium materials and capability customers have come to expect from GMC trucks,” says GMC. 

Canoo

Canoo electric truck

The Canoo ‘Pickup Truck’ has more in common with the Tesla Cybertruck that one might suspect. It’s weird-looking, has space-age ambitions, and has been repeatedly delayed. Canoo has undergone multiple leadership shakeups, and that has delayed the launch of Canoo’s first products by a few years (and counting). 

The Canoo truck has a targeted payload capacity of 1,800 pounds, a 6’ 8” bed when extended, and about 500 horsepower. At least 200 miles of range are to be expected on a charge. Hopefully it turns out to be at least 250 miles considering the competition. 

As odd and mysterious as the Canoo Pickup Truck is for now, the EV startup already scored a significant contract, at least symbolically. NASA selected Canoo to transport astronauts to the upcoming Artemis spaceships for missions to the moon in 2025.

With a bit of luck, the Canoo truck just might be available to reservation holders in 2023. Learn more about Canoo here. 

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Over-the-Air (OTA) Updates: How Automakers Are Betting on Software to Keep Up With the Pace of Innovation

Over-the-Air (OTA) Updates: How Automakers Are Betting on Software to Keep Up With the Pace of Innovation

2024 Silverado EV
2024 Silverado EV RST

At what point does a car become more of a computer on wheels? Computer integration in the automotive industry is nothing new, however it’s accelerating at breakneck speed. Both software and hardware become outdated in no time at all. Is there a way for car buying habits to steer clear of the two-year replacement cycle that smartphones have fallen into? 

As soon as computers grew wheels (in the form of electric vehicles), forward-thinking automakers launched over-the-air (OTA) update capabilities. Tesla was the first to do it, and now the likes of Ford, GM and Volkswagen are among the legacy OEMs marketing their vehicles as OTA-ready. Although, not all who’ve tried it have succeeded without hiccups. Here’s how OTA updates are changing car ownership, and what’s to come in the years ahead. 

What Is an Over-the-Air (OTA) Update?

EV charging costs

You know when your phone gives you a push notification about scheduling a time to install the latest software updates and bug fixes? Well, cars can do that too now. OTA updates are not just for software fixes. With OTA capability, vehicles can receive enhanced performance and safety improvements via a simple wireless internet connection. 

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OTA updates eliminate the need for making a service center visit for many simple fixes and updates. The updates are sent and downloaded via access to a cloud-based server with a wireless internet connection. Many updates are free of charge, and all safety enhancements are at no cost. However, we are entering a new era where OTA presents a new revenue stream for car makers. Everyone’s getting in on the subscription business, and the auto industry is no different. There are two kinds of OTA updates: those for infotainment, and those for vehicle performance and control. They may target either software or firmware, the latter of which required more advanced security protocols to implement.

Infotainment OTA Updates

Head up display Kia EV6
2022 Kia EV6

Infotainment updates improve the user experience. A classic example is how Volkswagen ID.4 owners are pleading for an improved infotainment performance after the original equipment was delivered with a laggy touchscreen and haptic buttons. Fortunately for ID.4 owners, the car is among VW’s first generation of OTA-capable models, and a fix is on the way. 

Sometimes, OTA revisions cause frustration and even anger from customers. Tesla recently pushed the Version 11 user interface to all of it’s vehicles via over-the-air download. The result was strong critical feedback from customers, most of whom were complaining about the automaker trying to fix something that wasn’t broken.

Vehicle Performance and Control OTA Updates

GM Ultium battery
GM Ultium Battery and Powertrain

How is it that the 2019 Tesla Model 3 has a quicker 0-60 time now than it had when it was delivered to customers? Or how Tesla vehicles can gain or lose access to the controversially-named ‘full self-driving’ based on driver safety scores? With OTA capability, automakers can send everything from a power boost to a pedestrian avoidance feature to cars already in driver’s hands. 

Vehicle performance and control updates can include updates to the vehicle’s powertrain, chassis systems, and advanced driver assistance systems (ADAS). Of course, updates to these critical components of a vehicle are only possible when the components are electronically controlled and operated. For this reason, an older car model can’t be retrofitted to become OTA capable. 

Examples of fixes and improvements automakers have installed via OTA

  • Tesla offers an ‘acceleration boost’ for the popular 2022 Model Y that lowers the 0-60 time from 4.8 to 4.2 seconds
  • Tesla regularly updates the ‘full self-driving’ upgrade, which is currently in beta testing
  • The Cadillac Escalade has received GM’s first big OTA update to improve the SuperCruise hands-free driver assistance (ADAS) technology
  • Ford delayed the release of a major OTA update for the BlueCruise hands-free driver assistance (ADAS) technology 
  • Volkswagen released the first of a series of promised software updates targeted at improving the infotainment experience

Which Automakers Offer OTA Updates?

Tesla was the first automaker to roll out over-the-air capabilities with the launch of the Model S in 2012. After years of skepticism from the competition, here are the other OEMs that have announced or commenced OTA updates in their vehicles:

AutomakerOTA-Upgraded Components
AudiNavigation
BMWInfotainment, optional features
FordADAS, several other components
General MotorsNearly every vehicle component on EVs, major components on combustion vehicles
HondaInfotainment
HyundaiInfotainment, voice assistance
Jaguar/Land RoverInfotainment, charging capabilities
LucidNearly every vehicle component and system
Mercedes-BenzInfotainment, navigation
NissanInfotainment
PolestarNearly every vehicle component and system
PorscheLimited functions
RivianNearly every vehicle component and system
Stellantis (FCA)Infotainment
TeslaNearly every vehicle component and system
ToyotaInfotainment
VolkswagenSeveral vehicle components and systems on EVs
VolvoNearly every vehicle component and system

Are OTA Updates Safe?

2023 Cadillac Lyriq
2023 Cadillac Lyriq

We’re used to having virus protection on our computers. If we don’t, bad guys will find a way to compromise the computer and access personal information. Are the same security and privacy concerns applicable to automotive OTA updates? 

Since OTA updates require a wireless internet connection to install, there are risks for malware and the unintended release of personal information. The best way to protect yourself from these risks is to only accept OTA updates while connected to a secure network, such as the wifi network at your home. Don’t try updating your car at the fast food or coffee shop drive thru!

What’s Next?

EV charging costs
2022 Volkswagen ID.4

Over-the-air updates are about to take the auto industry by storm. Now that major OEMs are proudly marketing their ability to improve the user experience (which itself sounds like they’re selling more of a tech product than a car), a paradigm shift is at hand. Volkswagen Group CEO Herbert Diess recently told The Verge about VW’s plan for a reimagined future where the relationship between the automaker and customers is more intimate and dynamic with the power of OTA updates and new ways of customizing the ownership experience.

Imagine: for a long time, we did not have access to a customer as a company. The customer access was exclusively with our retail network. What we experienced over time was that people walk away from our retail outlets and go to third parties to substitute some of the spare parts or buy new tires. Now, we have a new opportunity to be in direct contact with the customer, which is totally new for us.

New Revenue Streams for Automakers

Not only is the largest automaker in the world committing to OTA capability, the likes of Ford, GM and even tech-cautious Toyota are joining the bandwagon too. Will OTA updates remain a free upgrade for millions of car owners? Unfortunately, that’s already slipping away. Tesla offers acceleration boost upgrades for its popular 2022 Model Y for $2,000, and Toyota recently tried making customers pay for remote start, a feature that is OTA-controlled. 

Even the CEO over at Volkswagen Group acknowledges the new money-making avenues made possible by software updates, telling The Verge that eventually, customers will have to pay for what they want.

We have that revenue in mind for sure as well. Customers will be prepared for some features they didn’t buy at the start, probably after a few years or after a few months — even if they consider taking another option or another software feature, the customers would be prepared to pay a monthly fee or a one-time expenditure.”

CarEdge’s Take

There are advantages and disadvantages of OTA update capabilities, but it seems that the advantages far outweigh any negatives that may come with this game-changing technology. As Tesla has shown the industry, there’s a future not too far away when most recalls may be fixed via a quick overnight update, and vehicles get better over time, helping them to retain resale value. Nevertheless, we’ll approach this industry change with caution and closely monitor how automakers roll out OTA updates in the months and years ahead. 

Are you ready to treat your vehicle more like a smartphone than a means of transportation? What do you think the outcome of this major industry shift will be for consumers, dealers and automakers? Will dealerships falter without the steady stream of vehicle service that they’re used to? Only time will tell. 

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Is This the Beginning of the End for Car Dealerships?

Is This the Beginning of the End for Car Dealerships?

When my dad and I founded CarEdge in 2019 we knew that the way people bought cars was inevitably going to change. Our best guess was that the hassle of negotiating a car deal would stick around for another 20, maybe 30 years. We hoped that by then the price of a car would simply be the price of a car, and the “grind it out” nature of trying to buy an auto at a fair price would be long forgotten.

Well, I think we may have been wrong.

Over the past week, two memos have been leaked from major domestic automakers. One from Ford, and another from GM (screenshots below). Both of the letters are directed towards their dealer bodies, and they each make it clear: stop screwing around with customers and tarnishing our brand.

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Could the beginning of the end of car dealerships be happening right before our eyes? I think the answer is a resounding “yes”.

Why car dealerships exist

Before we unpack the memos from Ford and GM, let’s take a trip down memory lane. Why do car dealerships even exist?

Reports vary, but the first car dealership was opened in either 1897 or 1898. Automakers of this era leveraged a variety of sales channels to sell their initial vehicles, dealer partners being one of them. These partners were exactly that; partners. Dealers were not owned and operated by the automaker, instead they were independent third party businesses that agreed to abide by rules and regulations put in place by the automaker.

Automakers loved this model. It was (and still is) highly profitable for them. They loved it so much that they lobbied state-by-state to pass “franchise dealer” laws that make it illegal for a vehicle manufacturer to sell directly to a consumer, instead they have to sell through a franchised dealer.

Traditional automakers are great at designing, manufacturing, and distributing their product. They are not interested in day-to-day customer engagement, setting up service appointments, or doing anything beyond building and selling cars to their dealers.

Automakers get paid when they wholesale a vehicle to their dealer partner. Then the dealer has to (no pun intended), deal with the end user. In this way, legacy automakers have been able to separate themselves from the expensive practices of customer engagement and instead pass that along to their dealer partners.

Why do car dealerships exist? Because automakers have been able to generate massive profits from this system. However, after 100+ years, it appears another model may potentially be even more valuable for them.

Sell directly to customers

Tesla notoriously refused to sell their cars through dealer partners. Instead, the upstart EV automaker insisted on having their customers purchase directly from them. This is illegal in many states, however after lobbying for many years, most states now have “carve out” laws that allow EV manufacturers to sell directly to consumers.

Here’s example of that “carve out” language in Connecticut:

Would allow a manufacturer to receive a dealer’s license if it does not have a franchise agreement with a new-car dealer in the state, if it builds only electric vehicles and only sells the vehicles it builds, and if it does not have a controlling ownership link to a manufacturer licensed as a dealer in the state.

Nowadays EV automakers can sell direct to consumer in many states via the internet, and they are just starting to prove how lucrative this business model can be. Tesla, Rivian, and Lucid are shining examples of how valuable direct to consumer sales models can be. Tesla is a $1T+ company, and Rivian, even though they’ve only sold a few hundred vehicles is valued at north of $100B. Ford, GM, and other legacy automakers want to catch up. For perspective, Toyota, the highest valued traditional automaker, is “only” worth $330B.

market cap per car sold

The Ford and GM memos

Within the past week both Ford and GM have sent memos to their dealers that say the exact same thing: don’t tarnish our brand, treat customers well, or lose allocation of inventory from us. These leaked memos represent the first attempt Ford and GM are taking to “stand up” to their dealers.

GM letter to dealers
The memo from GM President Steve Carlisle
ford f-150 lightning memo to dealers
The memo from Ford to their dealers

Both memos reference the dealership’s franchise agreement, and both make it clear that if the dealership does not treat customers in a way that enhances their brand, they will take away allocation of inventory.

Sure, these memos represent the first time we’ve seen automakers stand up to their dealers, and for that reason, we’re excited to see them, however the issue is, if GM or Ford actually tries to enforce their own rules they’ll certainly get taken to court. Why? Because nearly every Ford and GM dealership in the United States breaks their rules, so if they begin to selectively enforce the rules, you can be certain some dealer groups will fight back.

What happens next

While the franchise dealership model has served automakers well for 100+ years, it’s clear as day that a transition away from that model is upon us. This transition won’t happen overnight, and we shouldn’t expect dealerships to simply vanish. Dealerships play a vital role in society, especially when it comes to vehicle repairs and maintenance, however it appears clear that Ford, GM, and many other automakers want to catch up to Tesla’s valuation, and one of the ways they’ll do that is by taking more control of the sales process.

Dealerships aren’t going anywhere anytime soon, but the shift away from the dealer model is happening 20 years earlier than we had imagined. It will be interesting to see how this market evolves, especially as Tesla and other EV startups continue to get praise.