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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: Strong bet
By lukasbradley on 12/4/2008 5:10:15 PM , Rating: 4
First, anytime someone states "get the facts" when they are talking about matters of opinion, or worse, predicting future events, drastically undermines their position.

Second, these companies are not going to collapse overnight. They most certainly can go through restructuring and bankruptcy and emerge. The assertion (you'd probably call it a fact) that no American would buy a car from a company in bankruptcy is a ploy. I would buy one. Some are decent vehicles that will have worth even if the company goes away.

Third, even if these companies do literally evaporate in the next three weeks, and there are an additional 5M jobs lost, that would bring the current total of unemployed to 15.1M (Oct 2008 figures), or 9.7%. This is a high figure, but to infer it would be "an unprecedented depression like never seen in history" is preposterous. The unemployment rate during the Great Depression hit around 25%.

Lastly, in the interest of full disclosure, I purchased Ford stock recently.


RE: Strong bet
By grenableu on 12/4/2008 5:29:58 PM , Rating: 2
That "five million lost jobs" figure is total crap, based on the idea that everyone would stop buying, repairing, or servicing their cars entirely, just because some automakers filed bankruptcy.


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