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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 callmeroy on 12/8/2008 10:17:42 AM , Rating: 2
There are some misconceptions or misunderstandings to consider with many of the banks and the bailout....first let's start this discussion with one thing -- I think the banks were wrong in what they did and overall "stupid" as they contributed, not fully, but a large part to their collapse. Now that that's out of the way, what some folks don't realize is that by LAW a mortgage thrift, like the one I used to work for, subject to the approval of the OTS (Office of Theft Supervision)...when the bank is for lack of better terminology "crashing" they don't have a chance to have talks -- its under the will of the OTS. Once they hit a certain state, the OTS, again by law -- tells the bank essentially what they can and what they can't do. In the case of my former employer the board and CEO were essentially tossed aside and the FDIC was appointed by the OTS to run the place.

The second element of this story is what people can't believe is the speed at which some banks went from being well capitalized and folding. This bank failure wasn't normal folks, the the scope of this thing is rather rare. So its kind of hypocritcal to paint with a broad brush -- "see how fast they got bailed out" , I can tell you the bank i worked for was trying everything not to go the bailout route -- they took tons of measures (still I think they were stupid for what brought them there) , it happened so fast -- in about 2 months they went from EXCEEDING government guidelines for well capitialized to imploding on itself.

Not trying to make excuses, and ultimately I think the banks got what they deserved AND the bailout disgusts me though ultimately I don't see what option we had -- 3 car companies can file chapter 11 and maybe 3 - 4 million jobs are at risk, or you can have HUNDREDS of banks filing for chapter 11 and many times more people unemployed than that.

take your pick.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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