EV Industry Faces Hard Times, Slowed Adoption
October 18, 2012 9:45 PM
comment(s) - last by
Cost, charging infrastructure and battery concerns are all reasons for the slowed adoption
Electric vehicles (EVs) are not taking off quite as expected, and if sales numbers don't start turning around, this could spell long-term trouble for the industry, according to a new report from
The Detroit News
Back in 2009, the Obama administration awarded $2.4 billion in stimulus grants for EVs and advanced batteries. The investment seemed promising, since gas costs continued climbing. Who wouldn't want an EV in the days of paying $5 per gallon?
The answer is, apparently, most people. Pushing EV adoption has been difficult for a few reasons, including cost (despite huge
federal tax credits and incentives
, EVs are more expensive than gas vehicles), slow deployment of charging infrastructure and battery worries.
Right now, the federal tax credit is $7,500 per EV in the U.S. President Barack Obama has proposed upping this figure to $10,000 in order to make EVs more affordable. He also proposed a $1 billion budget for speeding up EV deployment and charging infrastructure in 15 communities.
Despite these efforts, and the fact that EVs can lessen the U.S.' dependence on foreign oil and reduce global warming, there was one issue that likely scared many customers off: lithium ion battery problems.
One such instance was the
Chevrolet Volt's battery fire
in May 2011, where a
Chevrolet Volt underwent a series of tests at the National Highway Traffic Safety Administration (NHTSA) facility in Wisconsin. Three weeks after a side-impact crash test on May 12, the Volt caught fire while parked in the testing center.
Fisker Automotive has
recalled its EV batteries for the Karma
due to recent troubles, and the Nissan Leaf recently
experienced some issues with
the Arizona heat
2012 Chevrolet Volt plug-in and 2012 Nissan Leaf sales have been all over the map over the past year. In 2011, 7,671 Volts were sold while 9,674 Leafs were sold. From January to September 2012, Leaf sales dropped to 5,212 while Volt sales jumped to 16,348.
The Detroit News
, this is because the Volt has an auxiliary gas engine that kicks in when the battery is drained. To some degree, it still relies on gas, and the U.S. just isn't ready to take gas completely out of the equation yet.
Nissan hoped to sell 20,000 Leafs this year, but clearly, that is unlikely to happen.
A recent hit to the EV industry was
A123 Systems' bankruptcy filing
earlier this week. A123 made EV batteries and developed advanced battery technology.
There are some bright sides to the EV industry, though. Ford just added
60 new EV engineers
and doubled in-house battery testing, and
Toyota is talking plans for new EVs
The adoption of EVs may just take some time, and could likely get a boost in the coming years as the CAFE standards for gas-powered vehicles continues to increase. The Obama administration just recently finalized
the 54.5 MPG CAFE standards
for 2017-2025 model years.
The Detroit News
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RE: Thinking about EV range
10/19/2012 3:47:51 AM
If you're going to think of it that way, if all EVs have a nominal range of 150 miles, then those on the road have on average half a charge left, and thus they have 75 miles remaining.
For probably 95%-99% of most people's purposes, 100 miles is enough. It's the extra 1%-5% (vacations, days with lots of driving/shopping, etc) which are the deal-breaker. People want one car which handles 100% of their needs. They don't want a car which does 98%, forcing them to rent a different car for the 2% trips.
If you work out the math (fully taking into account depreciation of the car), the rental model actually makes fiscal sense. But the sense of ownership and the mistaken belief that miles are free just because you're already paying for the car swings it in the 100% car's favor. Depending on mileage of the car, each mile you put on it represents something like $0.15-$0.80 of depreciation. If you're going on a 500 mile weekend trip, why depreciate your car by $100-$200 when you can just rent one with unlimited mileage for $50-$100? The only catch is the time it takes to actually rent a car. This is where a new business model might help.
RE: Thinking about EV range
10/19/2012 11:53:41 AM
If I already have a car for my normal commute, just taking a 500 mile trip is not going to drop the value of the car by $200.
Your numbers might nake sence if you are driving an expensive car, that is only a couple years old, and doesn't have the best resell value.
However, on my 10 year old, low milage mid size car, even a 5,000 mile trip wouldn't lower the resell value that much.
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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