The Expert Podcast

Introduction:
Exploring the differences in insurance claims processes between electric vehicles (EVs) and traditional gasoline or diesel vehicles.

Key Differences in Engineering:

• Gasoline vehicles have separate powertrains and frames.
• EVs integrate the battery and powertrain into the chassis, often as part of the vehicle’s floor pan.
• Accidents in EVs are more likely to damage the powertrain, leading to higher repair costs.

High Insurance Costs for EVs:

• Insurance premiums are based on claims history and repair costs.
• EV accidents often result in total loss claims due to extensive damage, even in low-mileage vehicles.

Challenges for Vehicle Owners:

• Total loss claims pay actual cash value (ACV), which may not cover the cost of a new vehicle.
• Repairs for gasoline vehicles can be cost-effective, while EV repairs often necessitate replacing costly components.

Salvage and Certificate of Destruction (COD):

• Many EVs are sold at salvage auctions with COD designations, preventing them from returning to the road.
• This minimizes liability for insurance companies but reduces resale value for damaged vehicles.

Long-Term Risks with EV Repairs:

• Potential for hidden battery or structural damage to emerge years later.
• Insurance companies are cautious about supplemental claims and liability issues.

Engineering and Market Adjustments:

• EV batteries are sensitive to impacts compared to robust internal combustion engines.
• Tesla and other manufacturers are considering engineering changes to reduce repair costs.
• Tesla has introduced its own insurance service to address EV-specific challenges.

Conclusion:
The shift to EVs is reshaping the insurance industry, with evolving claims processes, premium structures, and vehicle engineering.

Engagement:
Drop your thoughts on how insurance for EVs can be improved in the comments.

 Focus of News Coverage in EV Industry:

• New electric vehicle models (e.g., Tesla updates).
• Developments in subsidies and rebates.
• Lack of coverage on the used electric vehicle (EV) market.

Understanding the Used EV Market:

• Market Size:
  • Limited data availability and visibility in the used EV market.
  • Experian’s study on financing reveals key insights.
• Financing Statistics:
  • 60,000 pre-owned EVs financed in 2021 (~1,000 per state).
  • Early 2022 data showed 42,000 financed by summer, potentially reaching 70,000–80,000 for the year.
  • Still relatively low volume compared to traditional vehicle markets.

Reasons for Low Transaction Volume in Used EVs:

• Production History:
  • Mass production of EVs began in the late 2000s, with significant volumes only around 2015–2016.
  • Limited supply of older EVs in the used car market.
• Consumer Behavior:
  • EVs often serve as secondary or tertiary vehicles, leading to longer ownership periods (~6–7 years vs. 3–4 years for primary vehicles).
• Future of the Used EV Market:
  • The next few years (2024–2025) will likely see significant growth in the market.
  • Key factors include increased trade-ins of older EVs and evolving consumer preferences.

Considerations for Buying a Used EV:

• Pros:
  • Cost savings.
  • Longer lifespan of electric motors compared to internal combustion engines.
• Cons:
  • Importance of checking battery health.
  • Potential preference for newer models with advanced features.

EV Longevity vs. Gasoline Vehicles:

• EV motors last longer due to minimal wear (magnets spinning instead of internal combustion).
• Battery health is a critical factor in determining an EV’s remaining life.
• Engagement Question:
  • Would you consider purchasing a used EV?
  • Do you prioritize cost savings or prefer newer models for reliability?
  • Share your thoughts in the comments!

This episode dives into the lesser-explored world of used electric vehicles, examining their market size, unique challenges, and opportunities for buyers. 

Toyota’s Stance on EVs:
Toyota, a pioneer in hybrid vehicles with the Toyota Prius, is now raising concerns about the rapid shift to electric vehicles (EVs).

Push to End Gasoline Vehicles:
Some states are pushing for the sale of all gasoline vehicles to be stopped by 2030 or 2035, but Toyota believes this might be too soon.

Toyota’s Perspective:
Toyota suggests slowing down the transition to full EVs and exploring more hybrid options to allow the market to adjust gradually.

Scientific Support for Toyota’s View:
They are considering scientific studies and surveys that question the speed at which we should transition to EVs.

Environmental Pushback:
Toyota's executives are facing criticism from environmental activists who feel the company's stance could hinder progress in reducing emissions.

Key Questions to Consider:

• Should we switch to EVs quickly or take a more measured approach?
• Is the charging network ready to support widespread EV adoption?
• Do manufacturers have the capacity and resources to meet the demand for EVs?
• Is Toyota right in trying to slow down the shift, or will they be left behind as other manufacturers go all-in on electric?

Irony in Toyota’s Position:
It’s particularly ironic that Toyota, the maker of the Prius, one of the first widely available hybrid vehicles, is now pushing back on the rush to EVs.

What are your thoughts? Should we be rushing into electric vehicles, or is Toyota’s cautious approach the right one? 

Episode Description:
In this episode, we explore the surprising connection between the U.S. Coast Guard and electric vehicles (EVs). The Coast Guard recently issued a safety alert about lithium-ion batteries in EVs, particularly concerning their interaction with salt water. Here's what you'll learn:

• Coast Guard's Findings on EV Batteries:
  • The risk of fire caused by salt water intrusion in damaged lithium-ion batteries.
  • Real-life example of a fire incident due to salt water intrusion.
• Shipping and Safety Concerns:
  • The dangers of loading EVs with damaged batteries onto commercial vessels.
  • Potential fire risks when at sea, with limited firefighting options.
• Relevance to EV Owners:
  • Living near coastal areas or saltwater environments increases exposure to risks.
  • States like California, Florida, New York, and Texas have a high concentration of EV users near coastal regions.
  • Winter road salt, used for snow and ice mitigation, poses similar risks to EV batteries even inland.
• Understanding Battery Damage:
  • Hidden risks from undetected damage (e.g., rocks, speed bumps).
  • Importance of checking for physical damage to your EV battery regularly.
• Preventative Measures for EV Owners:
  • Inspecting your battery periodically for signs of damage.
  • Addressing potential battery damage before it escalates.
  • Parking safety tips to avoid potential property loss from fires.

Tune in to stay informed about these critical safety concerns and learn how to protect yourself, your vehicle, and your property.

Stay updated on crucial topics affecting your everyday life—subscribe now! 

 Overview of EV Market Insights:

• Explore where to find the best information about the electric vehicle (EV) market, focusing on industry sources rather than guesses from financial or political pundits.
• The auto industry itself provides the most accurate data on EV sales and trends, including a key publication from Auto Remarketing.

Key Data from Experian:

• Experian's report shows that the EV market is experiencing significant growth, with an increase in new retail transactions.
• There is a surge in buyer activity, especially among early adopters, alongside organic growth from individuals transitioning from gasoline to electric vehicles.

Used EV Sales Trends:

• Used EV sales are still growing but haven't reached the levels of new EV sales yet.
• The limited supply of used EVs in recent years, along with high pricing, has affected the volume of pre-owned EVs in the marketplace.
• The discounting of new EVs by manufacturers like Tesla has led to lower prices for used EVs, making them more accessible.

Used EV Financing Data:

• In 2021, around 60,000 pre-owned EVs were financed, with projections showing 80-85,000 in 2022.
• 2023 is expected to be the first year where over 100,000 used EVs will be financed, setting the stage for continued growth.

Implications for Dealers:

• Dealerships must stay ahead of the curve by following detailed data and analytics, focusing on their target market, and tailoring advertising and offerings accordingly.
• Inventory management and vehicle acquisition strategies should align with market demands, ensuring dealerships meet consumer expectations.

This episode highlights the importance of using data-driven strategies in the rapidly evolving EV market to stay competitive. 

The Big Elephant in the Room: EV Charging Stations

• A significant concern for electric vehicle (EV) owners: recharging and finding charging stations. The main question is, "Where can I recharge, and what about long trips?"

Federal Government’s $5 Billion Investment

• The federal government has committed $5 billion to improve the charging network over the next 3 years.
• Funds will be allocated to individual states to implement local charging infrastructure, not a national network managed by the federal government.
• States may partner with private enterprises to set up charging stations.

Key Points of the Plan

• The Department of Energy has compiled state-by-state plans for how the funds will be used. A link to these plans is available on our website.

Challenges with Charging Station Uptime

• A major issue is uptime. Charging stations aren’t always operational—many work only 2/3 or 80% of the time.
• Uptime is critical; imagine if your phone or gas station was only working 80% of the time.
• Unlike gas stations, charging stations are generally unmanned, so repairs may take days or weeks.

Charging Speed: Level 2 vs. Level 3

• Level 3 charging can fully charge an EV in 20-30 minutes, while Level 2 may take 2-3 hours.
• Level 3 stations are still rare, making Level 2 chargers the more common, but less efficient, option.

Power Needs and Infrastructure

• Charging speeds have increased from 7 kilowatts to 150 kilowatts, but many areas lack the power infrastructure to support such levels.
• A typical gas station uses 50 kilowatts of power, while a charging station with multiple chargers could require 600 kilowatts or more, sometimes even approaching megawatt levels.
• This means the local electrical grid needs major upgrades to support DC fast chargers (Level 3).

The Challenge of Building Charging Stations

• Unlike gas stations, which need complex infrastructure like underground tanks, building charging stations is simpler, but power demands create significant challenges.
• Many areas don’t have the electrical bandwidth to support the necessary power for Level 3 chargers.

The “Buy American” Clause

• The infrastructure bill includes a "Buy American" requirement, but many key components for EV charging stations, like computers, controllers, and plugs, are only manufactured overseas.
• There are no U.S. factories currently producing these parts, making it challenging to meet the "Buy American" mandate.

Conclusion: Obstacles and Solutions

• While the plan for EV charging stations is ambitious, the biggest obstacles are capacity, reliability, and infrastructure upgrades.
• The goal is to create a dependable network of EV chargers every 50 miles, and the $5 billion program aims to make this possible, but it will require significant changes in infrastructure.

Current Lumber Price Trends:

• Lumber prices have fallen significantly, reaching around $500 per thousand board feet, making it less viable for mills to produce lumber at these rates.
• Mills may be losing money once production and operational costs (labor, insurance, etc.) are accounted for, prompting curtailments (shutting down or reducing supply).
• Some mills have started curtailments in the past month or two, though inventory shortages may not be apparent yet due to supply chain delays.

Impacts on Lumber Buyers and Retailers:

• As a result of curtailments, some lumber buyers are "jumping off the fence" and committing to lumber packages to secure inventory, which could potentially increase prices.
• 2022 price trends showed significant fluctuations, with prices reaching as high as $1600 per thousand board feet in 2021 before dropping to around $500 mid-year, now stabilizing in the $600-$700 range.
• Expect lumber prices to stabilize at $600-$700 per thousand board feet in the future, but currently, prices are artificially low due to reduced demand.

Mill Operations and Cost Management:

• Mills are dealing with high log costs and lower lumber prices, leading to reduced production, which in turn lowers payroll and energy costs.
• This downtime is a strategy to manage expenses, as mills may not be able to sustain profitability at current prices.
• Example: One trader reported diminishing sawmill offerings in October, slightly boosting prices.

Inventory and Demand Dynamics:

• Lumber traders are seeing lower inventories at retailers and lumber yards, prompting them to secure more materials for their customers.
• While there is strong demand for Western SPF studs, some buyers remain cautious and are purchasing only for immediate needs, avoiding larger buys due to cash flow concerns.

Listener Interaction:

• Share your experiences with lumber prices and how they’re impacting your operations, especially if you're a contractor. Let us know what’s happening in your area!

Episode Show Notes / Description:

• Viewer Question: A viewer asks about capitalizing on the labor shortage by getting certified in trades and shares their experience of building an accessory dwelling unit (ADU) on their property using YouTube and motivation.
• Certification and Licensing:
  • In most states, carpentry and framing work don’t require certification or a license. You can work as an employee for a licensed general contractor.
  • To start your own business, you can obtain a general contractor’s license through education, training, and exams.
• Insurance Challenges:
  • Obtaining insurance for larger jobs may be difficult without prior experience in home building.
  • A potential solution is becoming a contractor and subcontracting work to a larger general contractor or another entity.
• Labor Market Insights:
  • Many contractors struggle to find quality workers who are reliable and skilled enough to justify high pay (e.g., $100/hour).
  • Entry-level workers are often easy to find but may not show up or produce substandard work.
  • Skilled workers, such as project managers or framers, are in high demand and can earn premium wages.
• Earning Potential:
  • If you’re dedicated, motivated, and skilled, you can easily earn $80-100/hour, potentially making several thousand dollars a week.
  • There are plenty of opportunities in the building industry, including rehab, remodeling, and additions.
  • You can also work as a handyman, handling tasks like fences and decks, and earn the same high rates.
• Challenges of Bidding Jobs:
  • Bidding can take up more time than doing the actual work, as you might need to visit multiple job sites and spend time submitting bids.
• Tips for Success:
  • Make sure to have good insurance.
  • Work with legitimate companies that pay properly, have insurance, and provide work comp.
  • Conduct background checks, especially for contractors, as many in the industry have criminal backgrounds.
• Final Thoughts:
  • The building industry offers plenty of opportunities for those who are ambitious, dedicated, and hardworking.
  • Be smart, check your references, and start building a career in this rewarding field.

Focus: Analyzing the current state of building permits, home buying trends, and the overall construction market.

There is a lot of misinformation surrounding building permits and construction, with claims suggesting a significant crash in home building.

Key Points:

• A headline from the Orange County Register claims California building permits dropped by 29% as home buying and rents cool, with October being the seventh slowest month for permitting since 2015.
• This might initially suggest a massive crash in home building, but let's examine the numbers closely.

Detailed Breakdown:

• October 2023 being the seventh slowest month for permitting since 2015 means there have been seven months slower than this in the last seven years (once a year).
• Looking at actual building permits:
  • 2018 (a significant year for construction) saw 7,000 permits in October, and 7,168 permits in 2022—almost identical.
  • Permits fluctuate seasonally, with October typically being slower.
  • Even with a 29% drop in October 2023, permits are still higher than pre-2018 levels.

Demand for New Housing:

• While permits are down, the need for new housing remains. The U.S. is still facing a housing shortage of approximately 5 million units.
• Affordability is a key issue, but the demand for housing, whether new, remodeled, or reconstructed, persists.

Building Permits and the Market:

• Builders are shifting away from speculative home building due to uncertainty about whether buyers can afford high mortgage rates (8% on a $400,000 house).
• Builders are likely focusing on homes for buyers who need them, rather than speculative builds.

Costs and Affordability:

• Even with a decrease in lumber prices, construction costs are still above 2018 levels, and mortgage rates are a major factor affecting buyer affordability.
• With higher mortgage rates, home equity loans (HELOCs) for remodeling are also more expensive, potentially decreasing remodeling activity.

What Does This Mean for the Future?

• Although permits may have decreased by 20% in 2023, the overall trend over the last few years still shows growth.
• The real question is how many new homes will be constructed year-over-year. If construction slows significantly, it could lead to a housing shortage in the coming years, resulting in more homelessness or rent disadvantaged individuals by 2025 or 2026.

Conclusion:

• While the home building market is experiencing some slowdowns, it is not necessarily a crash. Builders may be adjusting to the current financial environment, but the need for housing remains critical.

Overview:

• In this episode, we tackle one of the most common questions: Do you need a building permit? What kind of work requires one, and how do you get one? We’ll also go over an example of a building permit from a city in Oregon to help you understand the process.

Building Permit Application Example (Oregon City):

• Most cities and counties try to simplify the process of getting a building permit.
• The permit application is typically a one-page form.
• Common sections include:
  • Type of Work: New construction, alterations, demolition, etc.
  • Construction Type: Single-family, accessory building (shed), commercial, or multi-family.
  • Job Site Information: Property address, cross-street, subdivision name, and tax parcel number to locate the property.
  • Description of Work: What is the work being done (e.g., replacing an air conditioner, adding a new roof, electrical work)?
  • Property Owner/Contractor Information: Who is applying for the permit—owner, contractor, or builder? Some work can be done by property owners without a license (e.g., small electrical or plumbing jobs) but can’t hire unlicensed help.
  • Financial Information: Job cost, square footage for calculating fees. The more complicated the job, the higher the permit fees.

Do You Need a Permit?

• General guideline: If you are altering the structure of the house, like changing doors or windows, you likely need a permit.
• Simple work like replacing shingles or trim may not require one.
• For new construction, permits may be needed for structures larger than a certain size or height (e.g., sheds over 100-200 square feet).
• Permits ensure proper location and setbacks (e.g., not too close to boundaries, septic systems, or existing structures).
• Larger projects may need more engineering and detailed plans (e.g., larger sheds, garages).
• Be aware that different jurisdictions have different rules, and what’s required can vary within a single county or city.

Consequences of Not Getting a Permit:

• Cities use aerial views, advanced mapping, and AI to spot unpermitted work.
• Without a permit, you may face fines, fees, or even have to tear down the work.
• Skilled trades like electrical and plumbing almost always require a permit.
• Major changes or work that could affect safety or neighboring properties should always have a permit.
• Cosmetic changes (e.g., moldings, shelves) typically don’t need a permit, but it’s crucial to understand local regulations.
• Unpermitted work could void insurance policies if it leads to damage.

Takeaway:

• Always check with your local jurisdiction before starting any significant work to ensure you’re following the right process. Proper permits protect both your property and your investment.