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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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RE: This says it all
By Suntan on 12/4/2008 3:58:39 PM , Rating: 3
quote:
Only way to make electric car sale better is to make the electric cars comparable to regular cars in price, performance, and range.


It was snowing this morning, so my 20 mile commute took an hour and a half. Further, it was 11°F outside. When an electric car can provide me with trouble free transportation for an hour and a half commute (then be able to turn around and do it again in the evening) while also being able to keep the car heated the entire trip, I’ll look at them.

Until then I’ll just let the tree huggers sit and tell me I’m stupid for not realizing how all my needs can be met with an earth friendly electric car.

-Suntan


RE: This says it all
By paydirt on 12/5/2008 8:45:05 AM , Rating: 3
I think this has nothing to do with the price of gas or the apparent hassle... I think this has everything to do with the electric vehicles being priced in the luxury range. $60-$100,000 for an electric vehicle?!?! Not in this economic environment! Luxury cars period are not being sold, luxury goods have steeply declined (jewelry, handbags).

Also, there is little financing for regular cars, so why do people think there would be financing for luxury cars? No financing, no buyers.


RE: This says it all
By porkpie on 12/5/2008 1:08:39 PM , Rating: 2
Funny I just financed a new luxury car and didn't have any problem getting a loan. I did have to put down 20%, but the financing is still there.


RE: This says it all
By Ringold on 12/5/2008 3:58:23 PM , Rating: 2
People haven't realized yet that this is the consumer loan credit environment we should've had all along. Commercials promising "No cash? No credit? No Problem!!111one" was not normal. People I think are facing the realities of their credit score for the first time since the 90s and are finding out it sucks. :P

Zero down on a car always was a bad idea.. it's a depreciating asset, the loan is under water as soon as it leaves the car lot.


RE: This says it all
By masher2 (blog) on 12/7/2008 1:01:31 PM , Rating: 2
quote:
People haven't realized yet that this is the consumer loan credit environment we should've had all along. Commercials promising "No cash? No credit? No Problem!!111one" was not normal...

Zero down on a car always was a bad idea.. it's a depreciating asset, the loan is under water as soon as it leaves the car lot.
This is such a vital point I have to repeat it. It's also the reason that our government bailouts not only won't help the economy, they're simply going to hurt it further. When risk is high and bad loans are being made hand over fist, the absolute worst thing you can do is preserve the status quo.

Interest rates need to rise and credit needs to be harder to obtain for a while, to give the markets time to settle and risk to descend to reasonable levels.


"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki














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