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Electric Cars at a dealership in Los Angeles  (Source: LA Times)
A bright star just months ago, electric car industry goes into dramatic reverse.

In what many will find a surprising turn of events, electric car sales have plummeted this year, plunging the fledgling industry into financial turmoil. Many manufacturers and dealers are cutting back operations; some have shut down entirely. Others are calling for government action to prevent the industry from wholesale collapse.

Many dealers understandably don't want to discuss declining sales. When asked how well their cars were selling, a spokesman for Electric Vehicles, Inc, in Tampa, tersely replied "no comment", and hung up. A dealer in Texas didn't answer the phone at all. Another in California had its number disconnected.

EPower, a retailer selling electric cars in Illinois, Iowa, and Missouri, has only sold two cars in the past three months. President Bruce Wood tells DailyTech that, "while there are a lot of tire kickers", few will actually commit to a purchase.

MCEV, the largest electric car dealer in the Pacific Northwest, has seen sales decline to 1-2 vehicles a month, down 80% from earlier this year. Buzz Duell, General Manager of MCEV, blames not only gas prices, but the economy as a whole. "No one wants to spend money right now", he says. Not only are individual buyers cutting back, but corporate and government sales -- which make up a large percentage of MCEV's revenue -- are also being impacted.

Duell expects a recovery in sales to take at least two years.

Tim Sankey, owner of an electric car distributor in Kansas concurs. "It will take time to build a customer base", he says, "but people haven't forgotten about high gas prices". Sankey hopes for a rebound next year.

Sales declines aren't limited to the U.S. In Britain, sales of electric cars have dropped a shocking 58 percent this year. For the first ten months of 2008, a total of only 156 vehicles were sold in the country -- nearly all of those confined to London itself. The announcement came just two days after the nation's Committee on Climate Change predicted electric car sales would increase substantially this year.

Tesla Motors, maker of the all-electric Tesla Roadster, announced a round job cuts last October, and said that plans for a mass-produced high-volume electric car would be "impacted" by the grim sales outlook.  Rumors suggested job cuts could be up to half the company's work force, a figure Tesla officially denied.

Larry Shriner, Chief Financial Officer of Zenn Motors, an electric car manufacturer based in Canada, says government "needs to get engaged to give the industry some momentum". Shriner doesn't necessarily favor gas price supports, but he says government needs to ensure "people stay focused" on the benefits of electric car technology.

Sales of traditional cars have also declined, but not as sharply. According to tracking company Autodata, sales are down 37 period from the same period last year.



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dejavu?
By Dreifort on 12/4/2008 3:39:42 PM , Rating: 0
Didn't DailyTech post an article about this very story months ago? I believe it was the same GM CEO who is in Washington at the moment, who said if gas fell to 1.50/gallon that GM would suffer and possible go under?

The article hit on the fact that automakers were being forc...errr...pressured by politicians into manufacturing "green" automobiles - despite the higher manufacturing cost and higher price tag to consumers.

The GM CEO called it. Washington ignored it.

A guy on FOX News (the guy in the wheelchair...Krauthammer?) said he has a way to keep everyone happy...at least everyone but those buying gas.

He said; create a federal tax to keep gas at $4/gallon. So if gas falls to $2/gal then the tax would be $2. If gas went to $3.50/gal then $0.50 tax. This would drive the demand up for greener cars - keep the automakers in business and generate money for the government. He admitted the faults to his theory is the fact that politicians would do this, but then refuse to lower the tax if gas went back up closer to $4/gal.... and it would hurt us consumers a little bit that did not buy hybrids or such yet.




RE: dejavu?
By strikeback03 on 12/4/2008 4:34:18 PM , Rating: 2
I've heard multiple people suggest that tax strategy, I can't imagine OPEC not reducing production to drive prices up above whatever the floor is. And if we allow them to set $4 as the price now, what is to stop them from deciding $6 or $8 per gallon isn't more appropriate in a few years?


RE: dejavu?
By Solandri on 12/4/2008 5:13:45 PM , Rating: 2
quote:
He said; create a federal tax to keep gas at $4/gallon. So if gas falls to $2/gal then the tax would be $2. If gas went to $3.50/gal then $0.50 tax. This would drive the demand up for greener cars - keep the automakers in business and generate money for the government.

On general principle, I believe if you're going to manipulate the market like this for the reasons you gave, it needs to go both ways. If the goal is to stabilize energy prices at $4/gal so businesses can have more confidence in their future business decisions, then the target price needs to be $4/gal. If gas drops to $3/gal, the tax needs to be $1/gal...

BUT - if gas goes up to $5/gal, the government needs to subsidize gas prices to the tune of $1/gal to bring it back down to $4/gal.

What I oppose is arguing for taxes with stability as the purported goal, but not offering subsidies should they become necessary to provide the same stability. If you're doing that, then the reasons you gave for the tax were lies. If your goal is to raise gas taxes to decrease gasoline consumption, then be honest and state that that is your goal. Don't try to trick me into accepting the tax increases by making up some other reason which sounds better but you don't really believe in. Politicians who do that should be impeached and barred from holding future office.


RE: dejavu?
By Dreifort on 12/5/2008 10:17:33 AM , Rating: 2
the whole purpose for Charles' tax idea was to push ppl away from gas cars and towards alternative options - like hybrids or total electric cars...or bio fuels, etc.

Charles may enjoy gas cars, this was just his thought out suggestion to increase "green" car sales. When gas sits at < $2/gallon...you're not going to see soaring "green" car sales. Base on studies over the past year - it was proven that $4/gal is curr the break point that caused Americans to rethink gas cars.


RE: dejavu?
By rcc on 12/5/2008 11:03:01 AM , Rating: 2
quote:
the whole purpose for Charles' tax idea was to push ppl away from gas cars and towards alternative options - like hybrids or total electric cars...or bio fuels, etc.


And, if this is necessary, it really underscores the fact that the industry is not ready. The vehicles are don't measure up yet. When they do, it won't be an issue, the transition will just happen.


RE: dejavu?
By Dreifort on 12/8/2008 2:43:06 PM , Rating: 2
Tom Brokaw is now jumping on (and promoting) the gas tax idea.

Another fine example of American media trying to influence our political system as well as free choice.


RE: dejavu?
By Ringold on 12/5/2008 4:07:16 PM , Rating: 2
I'll simply point out that gas taxes are about as regressive as you can get. The upper middle class and upper crust don't care very much if gas is $1/gal or $8/gal. However, the lower classes spend a much larger portion of their income on gas, so they would take it on the chin.

I can't think off hand of any government price manipulation ever really being successful. Lets not use government policy to try to shape reality to the fantasy we want it to be and instead lets learn to deal with the world as it truly is.


"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein














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