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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 masher2 on 12/4/2008 8:38:46 PM , Rating: 4
> "The only thing that is being bought right now are ultra-safe US treasuries."

Eh? Look at a bond index sometime. Global volume on both corporate bonds and syndicated loans (loans made by consortiums of lenders to large corporations) is down about 50% due to the credit crunch, but volume still runs into the hundreds of billions of dollars per month. AAA-rated corporations have no problem raising money.

GM at junk-bond status now, though. Who will lend them money? Worse, GM has about 5 retired workers on their books for every one actually working. They have some $50B in health care commitments just for retired workers alone -- not to mention a cost structure for union members thats at least $25/hour higher than what Honda and Toyota pay US workers. They also have far too many brands, along with a bloated, ineffecient management structure.

Loaning GM money is just preserving a monument to poor business practices. The best thing for the nation would be a Chapter 11. GM can sell off some peripheral brands, negotiate a reasonable deal with the UAW, and trim the fat off its upper management.

Or they can get a handout, and continue the status quo.

RE: Strong bet
By Suntan on 12/5/2008 9:55:29 AM , Rating: 3
Didn’t think you would ever answer the question I posed, which you initially alluded to as a no-brainer.

My assertion had nothing to do with GM getting financing and everything to do with you saying it would be easy for a company to get that kind-a scratch if they were a good risk. Yet you have nothing to show about anyone (or any group), anywhere being willing to drop that kind of money on any industry right now.

As for your comments about GMs commitments, either you know they aren’t true and are completely happy to lie to your following to make your argument “look” better. Or you’re not as good with your google searches as you would have everyone believe.

Anyway, feel free to keep changing the subject by googling up random information from the net. Seems a lot of people around here are fully taken with the tactic.


RE: Strong bet
By masher2 on 12/5/2008 10:26:46 AM , Rating: 3
> "As for your comments about GMs commitments, either you know they aren’t true and are completely happy to lie "

Eh? It's not a lie. GM indeed has over $50B in health-care commitment costs, a fact well known by all industry observers. Just their cost to fund VEBA their 'independent' employee health care trust fund) is over $30B by itself.

> "you have nothing to show about anyone (or any group), anywhere being willing to drop that kind of money on any industry right now"

This is getting a little silly. Corporations besides GM are raising hundreds of billions of dollars in loans and bonds each and every month. GM's junk-bond status and the widespread knowledge that they're teetering on the edge of bankruptcy is the sole factor that prevents them from tapping into that massive market.

RE: Strong bet
By Suntan on 12/5/2008 1:46:48 PM , Rating: 1
This is getting a little silly.

Agreed. The notion of using sweeping generalities, with extremely tenuous relations to the argument you are actually trying to make is getting old. Too bad it’s the same one you keep going back to.

Anyway, I’m willing to let it die if you are. I guess the horribly general and non specific statement that “companies” are “raising hundreds of billions” will have to suffice for as close as you can get to backing up your claims.

Have a good weekend.


RE: Strong bet
By Ringold on 12/5/2008 4:28:48 PM , Rating: 3
Further up, you seemed to be talking about AAA companies.

If you look down at investment grade bonds, you'll note the lowered yield recently. That means people are buying, and given the vast size of these markets, it means a lot of buying. If people were really unwilling to hold investment grade companies bonds, the yields would be moving higher. Look at the 20 year A-rated bonds; 8.31 a month ago to 6.81 yesterday. There's also probably pensions and some other groups out there that believe in, or are required to, dollar cost average by buying diversified sets of investments every month. That by itself is billions that must be bought continually.

The real issue isn't that people don't want bonds from companies. It's that they don't want the bonds of companies that are not viable.

Also, head over the St. Louis Federal Reserve Bank's databases, pick your credit dataset of choice. Commercial credit continues to inch up.

Thats one example. Non-revolving commercial credit isn't falling; have to look at that, since revolving lines of credit are getting hammered as businesses draw on those lines to protect their bond investors.

RE: Strong bet
By grenableu on 12/5/2008 5:03:41 PM , Rating: 2
non specific statement that “companies” are “raising hundreds of billions” will have to suffice for as close as you can get to backing up your claims.
He told you to look at any of the bond indexes. That takes about 8 seconds on Google. What more do you need, a tattoo on your chest?

My own employer financed almost a billion in bonds this year, and we're a LOT smaller than GM.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer

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