Tesla's Model S will test market interest in battery-electric vehicles when it debuts later this year.
If the White House hopes to meet its ambitious goal of putting 1.5 million battery cars on the road by mid-decade it better hope that 2011 wasn’t a good indication of what Americans think of electric vehicles.
Add them all up, hybrids, plug-ins and pure battery-electric vehicles, or BEVs, and they accounted for little more than 2% of the U.S. automotive market last year. Remove conventional gas-electric models, such as the Toyota Prius and Ford Fusion Hybrid, from the equation and more advanced battery vehicles generated barely 20,000 sales.
“I’d say they failed,” proclaims Joe Phillippi, chief analyst with AutoTrends Consulting.
For his part, David Sullivan, of AutoPacific, Inc., isn’t quite ready to go that far, but he sees 2012 as the really critical year. The limited demand for electric vehicles, so far, has largely been driven by the early adopters, contends Sullivan. “Now we’ll see if there’s broader consumer demand.”
Ford delivered only a handful of Focus Electric models in 2011. This year brings the real production ramp-up.
That’s going to be critical as the industry ramps up battery car production capacity and an assortment of new models charge into showrooms.
While there are a variety of products already on the market, most come from niche manufacturers that barely even register on the sales charts. Last year brought the introduction of two closely watched mainstream models: the Chevrolet Volt plug-in hybrid and the Nissan Leaf BEV.
General Motors had declared a goal of selling 10,000 Volts but will likely end the year at around 7,000. The good news for the maker was that momentum had been building during the final quarter but then Chevy found itself in the uncomfortable position of having to explain why several Volts caught fire weeks after being subjected to federal crash tests.
Though there have been reports that last month’s sales were down sharply, GM spokesman Rob Peterson contends, “December sales are solid – definitely not “down sharply” as reported.”
But there’s no question the timing of the news was bad, coming just as GM was getting ready to boost production to 60,000 for all of 2012, 45,000 of those earmarked for the U.S. The results of an investigation into the problem by the National Highway Traffic Safety Administration could clear Volt — or cause it significant problems if a redesign of its battery pack proves necessary.
Nissan came closer to its 2011 target, though it will likely fall a little short of the 10,000 mark when December sales are revealed later this week. The maker can explain at least some of that away by pointing to the March 11 Japanese earthquake and tsunami that interrupted production for several months. But Leaf sales have been slipping for several months, a worrying sign as Nissan prepares to open a new facility in Smyrna, Tennessee capable of churning out 200,000 battery cars annually.
There are a number of reasons why proponents believe American buyers aren’t plugging into battery cars. For one thing, there’s still a relatively limited range of choices available. But that won’t be an excuse in 2012.
The options coming to market are broad, ranging from the Fisker Karma, a plug-in sports car, to the Ford Focus Electric. There are electric minicars, like the new Mitsubishi i, and big SUVs, including the Jeep Grand Cherokee and Mercedes-Benz ML350 that Ohio-based Amp Electric is converting to run on battery power. There will be mainstream offerings, such as the Toyota RAV-4 Electric, and products from aggressive start-ups, such as Tesla’s new Model S sedan.
The Model S will aim to overcome one of the biggest drawbacks of battery power, offering buyers a choice of a base Model S with a range of 160-miles, or optional 230- or 300-mile battery packs, the latter adding $20,000 to the price tag. Most other pure BEVs are limited to less than 100 miles per charge.
Even then, they aren’t cheap, battery vehicles saddled by price tags that are thousands – in some cases, tens of thousands – of dollars more than comparable gasoline vehicles.
That might make sense had fuel prices held at the near-record levels seen in early 2011, but gas has dropped sharply since then. Meanwhile, manufacturers have been making major strides when it comes to the fuel efficiency of conventional, gas-powered vehicles. In the compact segment where Ford will compete with the Focus Electric, for example, 40 mpg on the highway is the new norm.
Both government bureaucrats and electric vehicle manufacturers, says analyst Sullivan, “aren’t giving consumers credit for being able to do the math. It just doesn’t make economic sense” to buy an electric vehicle – at least if your primary goal is to save money by reducing your energy bills.
There are, of course, other reasons. There’s the desire to clean up the air and to curb oil imports, especially from the Mideast. But whether that can be used to draw more buyers into the market remains to be seen. Especially in this economy, value is the big motivator, rather than politics and social concerns.
So, the industry will have a big challenge ahead finding ways to lure customers into the showroom and getting them to drive off in a hybrid, plug-in or battery-electric vehicle. The past year certainly didn’t live up to expectations. So, the coming year will be the big test.
GM’s stated goal as articulated in a March 2011 press release was to PRODUCE 10,000 for sale in 2011. They will likely top 12,000.. which is 20 percent higher than their estimate.
Most media outlets have taken the 10,000 goal, and restated it to mean Sales… so it seems like GM has not met their goal.
The Volt has been on the national market for 63 days (it launched nationally on November 1, 2011). Is it really fair to judge sales on that small a sample size?
Finally, do you have any other detail on the statement “Initial indications are that December [VOLT] sales will be down sharply.”
… Despite the bad PR from the NHTSA test, there were pent up orders for the car nationally that would have finally gotten filled in December. I would expect the sales numbers to got UP in December, even with the bad press.
Hi, Farris,
You might have noticed I revised the story (and should have flagged that at top) to include a comment from GM spokesman Rob Peterson hinting that we will see strong sales for December despite the bad headlines. We’ll know for sure in less than a day.
As to sales v production, there has been a LOT of fudging in what was said by various manufacturers. I could also point out that Nissan CEO Carlos Ghosn indicated in one interview that the 20,000 early deposits they took would translate into 20,000 sales, though the company has subsequently been going with a 10,000 to 12,000 sales number. GM has likewise made a few different pronouncements and also tried to downplay the gap in sales v production.
This is one of the reasons why: 1) there is plenty of skepticism about the initial performance of the battery car market, and 2) why it simply is too early to come to a firm conclusion about whether the market is falling flat on its face or simply developing its stride.
Thank you for making some valid points.
Paul A. Eisenstein
Publisher, TheDetroitBureau.com
This article is full of false and misleading information.
I am one of the many who have an electric car. I’ve driven over 12,000 miles in it, since I got it in April. I have spent only about $35 per month to fuel it via hydro-electric power available in the Seattle area. I have not had to pay for any oil changes, filter changes, etc. My one area of car maintenance this year was having my tires rotated.
This article tries to make the point that the savings in fuel for an EV is neglible, which is clearly false. I would have spent thousands of dollars more if I had gone 12,000+ in a gasoline fueled car. I expect the savings in fuel and maintenance costs to continue, year after year.
I love my electric car and wish my other vehicles were electric too. The savings would be wonderful. We drive our electric Leaf every chance we can, though unfortunately we only have one so far. The advantages are too many to name here.
Demand continues to outstrip supply. I hear of people all over wanting Electric cars, but due to limited availability have been having to wait. There are waiting lists for almost every model of electric car available. You can’t just buy them off the lot.
Whoever authored this article is practicing bad journalism for reporting misleading opinions rather than having taken the time to really investigate, missing out on a balanced article.
Hi, Divaqs,
Actually, I am afraid you are practicing bad math and confusing that with bad journalism.
Now, before I practice some math myself I must stress that electric prices vary by region and even city to city but the average is running around 11 cents a kWh. This can vary by hour, as well, and a few utilities have discussed (I cannot confirm they are indeed offering) off-peak rates for EV charging at as little as 2 cents/kWh. Allow me to use the higher figure for the moment but realize both are, in fact, reasonably impressive. Let’s go with a Leaf with a 24 kWh battery that is rated at just under 90 miles.charge. To be charitable, let me say that you’re a really conscious driver and get 4 miles/kWh. That’s about 2.75 cents/mile.
Now, you said you have clocked 12,000 miles since April, which works out to a bit more than 15,000/year — slightly more than the typical American motorist. But let’s use that number. With the *average* figure I quoted for a Leaf you would spend about $413/year on energy — about the monthly average you suggest…again, assuming you are really, really careful about how you drive.
Drive with the same attention in one of the new, high-mileage vehicles of comparable size and you might get a Combined average of as much as 30+ mpg. Let’s say a flat 30. (Note I am not using the unrealistic 40 mpg Highway numbers that are often quoted. Okay, so at 15,000 miles you are talking 500 gallons at the current national average running somewhere short of $1700. Push that to $4/gallon and you’re at $2,000.
Per the more nuanced point Mssrs. Sullivan and Phillippi made: while the savings of somewhere north of $1300 a year might sound like a lot one has to consider the increased cost of the vehicle, (and to be valid, the comparison should be made PRE-tax incentives. We could make an obscene argument *against* battery power if gasoline engines were incentivized). Suddenly, the economics work terribly against battery power. I can accept that MANY folks will add to the equation the less tangible benefits of a cleaner environment and a lowered dependence upon Mideast oil. A critic will counter that while Washington has plenty of river-damming hydro New York generators spew mercury-laden coal particulates. And since we actually only get 10-20% of our oil from the Mideast is there really a need to cut our dependence on Canadian and Mexican oil?
Before I continue, I have to stress that I describe myself as a skeptical proponent of battery power. I think that reflects the need to take a cautious and balanced look at the new technology. We need to reflect the *full* story and not just lay out the portion of the argument that wide-eyed enthusiasts would have us hear. I also think it is critical to point out the long-term pluses to counter those who would simply dismiss battery power because of the current costs, limited range and other negatives. There is little doubt those will move in a favorable direction. But to ignore those realities today and try to focus on just one element, ie the raw energy cost, would be a more accurate case of “practicing bad journalism.”
There are other issues which need be discussed: the cost of charger technology (which just saw an end to federal subsidies); the cost of upgrading the national grid; the cost and challenges of battery recycling, and so on. Few consider the total well-to-wheels cost of energy.
Oh, and before I wrap up, I hear the demand/supply argument but have not had that argument convincingly expressed by the battery car makers. As you will note in my article I stressed that 2012 will be the REAL test. Production capacity and model diversity will blossom in the coming 12 months. If there is indeed a market beyond early adopters we will see it by this point in 2013. Personally, I would love to see it and would gladly report it. I remain skeptical.
I will wrap up by suggesting that I am more than willing to revise my standpoint where a valid counter-argument is made. I posted figures a year ago on the likely size of the Tesla Model S battery based on an interview with the program’s senior engineer who gave me preliminary watts-per-mile numbers for the Model S prototype. It was simple math to thus determine the likely size of the battery to achieve various range targets. As some pro-EV readers ignored, I also noted that in the interview the chief engineer said the goal was to reduce energy consumption. If the new range numbers Tesla has provided are validated by the EPA they have achieved a remarkable improvement in efficiency in barely 12 months, resulting in a battery about 20% smaller than I originally estimated. If you are a regular reader you are aware that I personally noted that fact in a recent story on the Model S.
I’m happy to see the technology improve, and will readily report such gains. Per the article you cite, I will always try to offer the balanced view. I would hope readers will read the story for accuracy and not for a reflection of their personal opinions. Facts and opinions are not always the same.
Paul A. Eisenstein
Publisher, TheDetroitBureau.com
You forgot maintenance costs, which I am including in my calculations.
With electric cars maintenance is markedly cheaper, with no oil changes, fuel filters, no belts to be replaced, less brake wear (due to regenerative braking), no distributers or spark plugs, no pumps, etc.
The only maintenance I have had to worry about this year is rotating my tires, which was done for free by a local tire company. Next year, it is recommended that I get a brake fluid flush, and to have a cabin air filter replaced, plus my tires rotated. This is a big difference from my non-electric cars, since these are so minor that they often were skipped as being low priority due to cost of other maintenance.
Maintenance issues alone was a huge selling point for me, since it removes the stress and cost of managing maintenance and many kinds of break downs.
FYI, with my Nissan Leaf I am easily getting 4 miles per KW.
My electic bill has only gone up by about $35/month.
Hi,
Yes, let’s add maintenance costs…if possible. And I say it that way for a reason. We really do NOT know what long-term battery and electronic maintenance costs are. Good to have the relatively long warranty but what will the replacement cost for the battery be and what will that work out to when amortized annually or per-mile? Agreed fewer expenses for filters, etc., though those costs are not enough annually to make any significant dent in the equation I outlined earlier. The up-front cost, (especially on an apples-to-apples basis, minus federal incentives) simply wouldn’t come close to working in a battery car’s favor (and barely come close even with those incentives). And battery replacement costs aren’t the only uncertainties. Yep, lower brake wear but your Leaf has an extraordinarily complex braking system. What is its service cycle and what are the longer-term maintenance costs? The same for so much of the rest of an electric vehicle. Lower maintenance costs up-front, in this case, but 5, 7, 10 years out?
There are plenty of reasons to want to see battery tech succeed but, at least for now, the economic case is not an easy sell.
Paul E.
I have had major maintenance costs for almost all of my gasoline cars at something like 10 years of age… such as replacing engines, transmissions, etc. Which is seperate from costs leading up to that (pumps wearing out, radiators replaced, belt replacements, etc).
At 10 years of age, if I have to pay for a new and probably better battery pack, it would be a good investment, since I expect it will add more life on to a great deal, rather than having to buy a new car.
My whole point is that the premise you listed in the article has not proven true for me, who am an active EV driver. Which is why I question your article being balanced and based on good data, rather than opinions.
I have my doubts that my feedback will change your opinions, but feel the need to still speak up.
First, I very much appreciate your opinion — which is why I have engaged in this interesting discussion.
In fact, I hope there are MORE folks like yourself that find a way to justify the move into electric power. My caution is that at this stage the technology IS worth bringing to market but NOT to assume it is ready for mainstream, the cost/benefit equation, the trade-offs and the less immediately obvious issues needing to be considered and factored in before the average consumer jumps in.
I’ve laid out my concerns and won’t repeat myself here…just say it is good that readers see both sides of the argument.
My bottom line is that things are off to a slow start. I do NOT think EVs have failed, though many analysts and observers do. Only with a slow ramp-up and the concurrent development of technology will battery cars have a chance of proving their viability on a more mainstream basis. Meanwhile, we must continue development of other clean technologies, from diesel to hydrogen.
Paul E.
I think the point that divaqs is pointing out is that you haven’t taken into account other costs including depreciation and even opportunity costs due to reliability. If you notice, hybrids tend to be more reliable per consumer reports versus non-hybrids. This was totally expected and predicted. Electric cars more so. Less moving parts and less things that can break. Think about everything on a standard car that you need done: oil changes, fluid topoffs and changes (radiator, oil, transmission, etc). Plus think of all of the things that have gone wrong on your cars over the years which don’t exist on an EV. Hoses, Belts, Radiator, Exhaust system. Further, due to the lower weight of the car, tires and braking systems should last longer. Less rotations and balances. Think of the thousands of dollars you’ve spent on a car that you owned and think about how those expenses don’t apply to an EV. Even for a small non-EV, these costs would most likely be 2K+ over an EV over it’s lifetime. Most likely A LOT more. Again, Yahoo Autos and Consumer Reports backs some of these statements up. I personally don’t own an EV or hybrid. But my next car will be either an EV, a hybrid or an alternative fuel vehicle (flex fuel ethanol, CNG, or other). What I would like to see is a flex fuel hybrid. I would buy that in a heartbeat. Back in the spring, when gas prices almost hit $4 dollars per gallon, Ethanol prices in Virginia did get as low as $2.88 per gallon. It’s the first time in a while, I’ve seen Ethanol prices decouple from Gasoline prices. I expect to see more of that price action in the future. Particularly in 2014-2015 when Ethanol from switchgrass hits full production.
Hi, Lisa,
Please see my follow-up note to divaqs on some of those other costs.
Note that I also didn’t add in the thousand to two thousand you pay for the 220-volt charger (such systems having just lost their own federal subsidy at the end of 2011). In some cases, utilities are giving them out for free. Such utility-based subsidies will all but certainly vanish as volumes go up, by the way. And even then it is unfair to pretend nobody pays for them or for the many billions in utility infrastructure upgrades needed to support a large base of battery vehicles around the country. That is an issue for a much longer story (or at least a very long comment).
Paul E.
The 90gr/Km CO2 of the Toyota Prius in the combined European cycle versus:
the 92gr/Km CO2 of the “conventional” Fiat 500 TwinAir,
the 95gr/Km CO2 of the “conventional” Nissan Micra DIG-S and
the 99gr/Km CO2 of the Volvo S30 Diesel,
cannot justify – any longer – the complexity and the additional cost of the Hybrids.
The electric cars, is another story.
They came to stay.
But their success in a country, or in a province, depends heavily on the availability of cheap / clean electric power.
Otherwise the difference is small, if any:
In one case you burn the fossil fuel inside the engine of your vehicle (the four engines abovementioned operate at a 30 and 40% brake thermal efficiency).
In the other case the fossil fuel is burned in a distant power plant (operating at a higher, say 50%, brake thermal efficiency) to generate electricity that travels through the net (wherein a small percentage of the power is lost) to arrive to your garage to charge the battery of your electric car at a not so good efficiency (the warming of the battery during the charging is an evidence of it); later the battery is discharged at a not so good thermal efficiency, too.
Looked from the CO2 emissions viewpoint, the electric cars are not better than the modern conventional cars in regions wherein the electric power is produced by fossil fuels.
Looked from the running cost viewpoint, the conventional cars have the handicap of the taxes most countries apply to the fuels sold at the gas stations. On the other hand, when the number of the electric vehicles will eventually increase, they will find the way to put taxes on them, too.
The electric-vehicle market-share is still insignificant.
This makes significant the evolution of the conventional reciprocating heat engines in order to burn less fuel, to pollute less and to provide more power.
Einsestain says: “ Drive with the same attention in one of the new high-mileage vehicles and you might get an average of as much as 30 + mpg …
I am not using the unrealistic 40 mpg Highway numbers that are often quoted”.
In 1940 Ralph Miller patented his Miller Cycle, an apparently theoretical idea that was dismissed for half a century by the experts (despite the fact that it is pure mathematics). Now it is back.
It took Toyota 50 years to see the advantages of the Miller-cycle over the Otto-cycle (for the gasoline engine) and to implement a limited version of it into the Prius Hybrid.
Mazda also used a limited version of Miller cycle in one of their models, a few years ago, without commercial success.
Last year Nissan turn their Micra 1200cc engine into a limited version of Miller-Cycle in order to brag now for over 50 mpg. (the guess is that all the rest OEMs will soon follow suit).
Today only FIAT has the tool (MultiAir / TwinAir technology) to apply immediately (as explained at http://www.pattakon.com/pattakonHydro.htm ) the full version of Miller-Cycle in the car engines (rid of throttle valve and with thousands of Miller modes the brake thermal efficiency of the gasoline engine will approach 45%).
In comparison, Toyota, Mazda and Nissan will continue to operate in a single Miller-Cycle mode, with a throttle valve for the load control.
Thanks
Manousos Pattakos