Recent Moves Sign of EV Death Knell Again?

electric motor
electric motor

Many pundits of the electric car revolution are singing the blues again as major moves from supporters seem to undertake measures to back away from fully realizing the revolution.

In similar moves, two of the largest electric car makers are taking what is called pragmatic decisions regarding the future of their respective electric car fleets. These carmakers are Nissan and Toyota respectively and their recent moves are being describes as the death knell again for the electric car.

Nissan, through its chairperson Charles Ghosn has invested billions of dollars into the electric car revolution. These include providing models such as the Altra and the Hypermini and its flagship vehicle the Nissan Leaf, which is fully battery powered. Now, the Japanese car giant is shifting its gears towards the model followed by Toyota, which is the promotion of gasoline powered hybrid cars. Toyota for its part, shunned developing fully electric vehicles for a variety of reasons and this has proven very successful for them, retaining the market lead with its powerhouse Prius line.

Part of the disenchantment with electric cars is range anxiety. At its peak, the best electric cars can only run just a fraction of an internal combustion engine’s ability. This is compounded by the fact that it takes five times longer to fully charge an electric vehicle and the lack of infrastructure to support electric cars, such as repair shops, charging stations and other services. Another major factor is the higher front end cost of the electric vehicle compared to a regular gasoline powered vehicle, even with the benefits and other incentives, still makes it an expensive option.

All these put together has created a very lukewarm response by the buying market. For Nissan, 9,819 Leaf electric cars were sold in the market, with under 50,000 already on the road now. Since its unveiling, the Leaf has successively failed to meet its sales projections, even with all the add-ons and improvements added on to the vehicle.

Toyota on the other hand with its hybrid formula, already has twelve models under its wing, four of them just for the Prius line alone. In 2012, a total of 327,413 hybrids were sold in the United States alone, while 1.2 million were sold worldwide. Total worldwide sales have reached five million for the Prius.

As Nissan cuts back on its EV investments and Toyota refuses to go all electric, it is clear that the electric car is having issues with the market. Does this mean that the electric car revolution is in its death throes again?

The Road Ahead for Electric Cars

ev-plug
ev-plug

Even with the major developments in electric and plug-in vehicle technology, there is still a great chasm of ignorance and apathy for this vehicle market segment with the general motoring public. This was concluded after a study was conducted by the Indiana University of Public and Environmental Affairs.

The study was comprised of a survey of 2,300 adult drivers, in twenty one American cities conducted during the fall of 2011. As a whole, the survey provides a rare glimpse into current driver sentiment, albeit eighteen months ago. Despite major advertising splash was undertaken for the marketing of the Nissan Leaf and the Chevrolet Volt, this resulted in a modest increase in awareness according to the study’s researchers.

According to John Graham, current Dean of the Indiana University School of Public and Environmental Affairs, “Based on sales data of electric vehicles and subsequent surveys, we would be very surprised if the result would be much different today than in August 2011.”

The study results raised the following question: If the respondents know so little about electric cars, what is the basis of the responses provided. The only possible explanation would be the presence of preconceived notions about electric vehicles, some of which may not necessarily be based on actual fact.

Dr. Graham adds, “We found substantial factual misunderstandings of electric cars in our sample of 2,000. In some cases, the misunderstandings would cause one to be more pessimistic about the vehicle than they should be. And in other cases, it would cause more people to be more optimistic than they should be.”

He further observed that many individuals underestimate the price premium that comes with plug-in electric vehicles. While the survey respondents know that the electric vehicles have a higher sticker price, averaging not just a few thousands compared to ordinary internal combustion engines. This result in the phenomenon called ‘sticker shock’, making potential buyers walk away from a bargain in the long run.

Another observation is the lack of understanding by mainstream car purchasers as to the ability of the vehicle to recoup initial upfront costs. These costs are recovered because of the ever increasing gas pump prices, which are turned into savings because of the switch from fossil to electric battery power. He added, “They don’t realize how cheap the electricity is. And it is very cheap, like 70 to 80 percent less expensive on a per mile basis than gasoline on average.”

The study believes that increased familiarity and more exposure to these kinds of vehicle platforms would result in an increased rate of acceptance for the technology, removing it from being alternative into becoming mainstream. He said, “That would definitely be the case. But it’s going to be a decade before we figure out of plug-in vehicles can become the norm, rather than an interesting curiosity of a niche buyer.”