Sales Outlook for Alternative Fuel Vehicles Varied

volkswagen logo
volkswagen logo

Many auto executives in attendance at the Paris Motor Show expressed reservations about the sales outlook for battery powered cars. In the beginning, the numbers were projected to be low, but the latest numbers from Tesla and Renault are indicating near dismal sales in the near future.

The CEO of Volkswagen, Martin Winterkorn, stated at the eve of the Paris Motor Show that the companies should instead focus on plug-in hybrids. These vehicles can run on battery power for limited distances and would be able to utilize standard internal combustion engines as range extenders. Winterkorn said, “We had a realistic view of the technology all along. There will be, for a long time to come, no alternative to the internal combustion engine.”

Volkswagen is among the car manufacturers participating in the annual Paris Motor Show. This year, the exhibits and the discussions would run until October 14th. The company is by far the largest carmaker in Europe thus statements about technology would definitely sound off the direction many carmakers would make moving forward. The German giant though has not shelved its own plans of creating an all-electric vehicle fleet but the management committee of the company has made it clear that plug-in hybrids would be the more pragmatic approach in the reduction of automobile emissions in the near future.

For its part, French carmaker Renault, who partnered with Nissan for its own electric vehicle models, said that there is still hope for battery powered vehicles. The company though admits that sales are far below initial projections to only about 15,000 units since the carmaker unveiled the unit for market release.

According to Jerome Stoll, Executive Vice President for Sales and Marketing at Renault, “You are always disappointed when you fix a big ambition and you don’t meet it.” He added that while Renault was the market leader in electric vehicles, “I am not happy about the size of the market.”

Battery powered vehicles provide more advantages compared to internal combustion powered vehicles. These include quicker acceleration, quieter rides and lower costs. These advantages though are still being underappreciated because of the high purchasing cost together with the limited range capabilities of these electric vehicles compared to gasoline powered ones. Another main issue would be the lengthy time needed to recharge the vehicle in order to get to full range.

Plug-in hybrids also have other issues, such as limited range on battery power alone, but with range extending gasoline engines additional complications occur. These include having two motors, one electric and one gasoline powered, batteries as well as fuel. These add-ons effectively takes up space in the vehicle and removes much of the efficiency benefits of the vehicle. The market needs to develop smaller but more powerful engines to make plug ins more efficient in terms of space and weight in the long run.

As for Volkswagen, it would pushing for an expansion of its plug-in hybrid line with the introduction of the Golf plug-in by 2014. Volkswagen also has partnerships with other European carmakers such as Audi, Seat, Skoda and Porsche together with other brands.