January 12, 2012

Will EVs and hybrids take off quickly? (part 2)

Probably not soon. Even though hybrids and EVs are competitive with conventional ICE vehicles, they won't sell well until until they're clearly cheaper. Hybrids and EVs are much cheaper, if we include all of the external costs of oil - oil wars, pollution, etc, etc. But that's not priced into the vehicles:


"The challenge with selling hybrids is that gasoline engines have become more efficient and the cost of hybrids haven't come down fast enough to justify the added expense for many buyers, said David Champion, senior director of the Auto Test Center at the Yonkers, New York, magazine Consumer Reports.

He pointed to Honda Motor Co.'s Civic, which gets 32 mpg in combined city and highway mileage, and the Civic hybrid, which gets 44 mpg. The hybrid version of the car saves a consumer $322 in fuel a year, according to the Environmental Protection Agency. Given the added sticker price, it would take more than six years to get the money back on a similarly equipped car at today's fuel prices.

Mike Jackson, chief executive of Fort Lauderdale, Florida auto retail chain AutoNation Inc., said that 75 percent of customers come into his showrooms and want to talk about hybrids. Only about 2.5 percent of AutoNation sales are hybrids. "What happens from the 75 percent consideration to the 2.5 percent commitment?" Jackson said in an interview. "They look at the price premium for the technology, which is already subsidized and discounted, and say 'the payback period is too long; not for me.' It's a back-of-the envelope conversation on the part of the American consumer."


"The battery in an electric car still adds $10,000 to the price of a car at current technology costs and it will be difficult to reduce that penalty in the near future, he said."


Change is difficult: for most people to move to something new requires a strong incentive, not something that seems roughly as good as what they have now.

An EV will save about $2,000 per year over the average US vehicle - the $20,000 savings over 10 years is clearly worth it, but a 5 year payback just feels too long for the average consumer.


Anonymous said...

GM agrees with you


Anonymous said...


"With NHTSA's closure of the investigation into the Chevy Volt, General Motors is now trying to rebuild the plug-in hybrid's image. But a new stumbling block has appeared on the road to higher sales — dealers turning down Volts from GM.
Now we're hearing reports of dealers who don't want to buy the cars from GM because customers just aren't materializing for the Volt.

Automotive News gives an example this morning in the New York City market where last month, GM allocated 104 Volts to 14 dealerships in the area and dealers took just 31 of them, the lowest take rate for any Chevy model in that market last month. That group of dealers ordered more than 90% of the other vehicles they were eligible to take."

Anonymous said...

GM sells only 603 Volts in Jan 2012

Anonymous said...

The Leaf isn't much better at 676 in January.

Nick G said...

The right-wing press wants to hurt demand for the Volt. It's disappointing to see the fossil fuel industry and it's allies succeed.

From a guest editorial in Forbes by Bob Lutz:

"“What on Earth is wrong with the conservative media movement that it feels it’s OK to spread false information, OK to damage the reputation of perhaps the finest piece of mechanical technology our country has produced since the space shuttle, OK to hurt an iconic American company that is roaring back to global pre-eminence, OK to hurt American employment in Hamtramck, Mich., as long as it damages the Obama administration’s reputation??”


Anonymous said...


"Facing a significant backlog of unsold inventory, General Motors will shut down production of the Chevrolet Volt for five weeks."