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Chu promises big battery price cuts, but doesn't say how

The Obama administration continues to push electric vehicles despite the fact that they have sold very poorly around the country. There are number of reasons why consumers haven't adopted electric vehicles in larger numbers, the biggest of which are the cost of the vehicles and range anxiety. The component that adds the most cost to EVs is undoubtedly the battery pack.

U.S. Energy Secretary Steven Chu has announced that the federal government is working to dramatically reduce the cost of battery technology for electric vehicles. Cheaper batteries would mean that automakers could [ideally] sell their EVs and hybrid vehicles that utilize rechargeable battery packs at a lower price.

President Obama wants 1 million plug-in electric vehicles and hybrids on highways around the United States by 2015. Currently, the federal government offers a $7,500 tax credit for people who purchase electric vehicles and Obama has been pushing to increase the tax credit to $10,000.

"It's ambitious, but we'll see what happens," said Chu during a talk with reporters during the Washington Auto Show.

"For the engineers in the room or those who follow this, you might be saying to yourself, 'What are they smoking,'" Chu said about aggressive plans to cut the price of batteries. "We're not smoking anything…. They are ambitious goals but they are achievable goals."

The original report from Washington supporting the goal of 1 million plug-in vehicles on the roads by 2015 expected Ford to sell 20,000 Focus EVs in 2012. Ford sold fewer than 700 of the vehicles and has resorted to significant price cuts to spur demand. Chevrolet also sold only 24,000 Volts in 2012 while the report had predicted 120,000.

Source: Detroit News



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RE: That last paragraph
By Manch on 2/1/2013 11:33:29 AM , Rating: 3
I think they knew damn well that their numbers were overinflated. Consider the 17month spread between the release of the Volt and the Focus EV, I see no reason why the numbers on that report remained inflated other than to continue to push an agenda to try and legitimize the fleecing of tax payers at 7.5K a pop.

If that rebate was working and people were wanting to buy these then they wouldn't be pushing for an increased rebate.

For regular cars that nobody wants, car makers/dealers increase rebates to try and get them out the door. The difference is that rebate dips into that companies pocket book, not mine.

Also, I think in de-incentivizes car makers to drive down there costs when good ol Uncle Sam is doing it for them.


RE: That last paragraph
By Mint on 2/1/2013 3:24:48 PM , Rating: 4
You don't have a very good grasp of economics.

Why do you think the Focus EV sold 700 cars while the Leaf sold 10,000? I'll tell you why: The Focus EV is a ripoff. Despite the tax credit, Nissan decided to sell the Leaf for a much lower price, and now they cut another $6000 off the price.

So who did better, the company trying to pocket part of the subsidy or the company reducing costs and passing the discount on to consumers? There's no lack of incentive to make progress.


RE: That last paragraph
By jimbojimbo on 2/1/2013 4:02:12 PM , Rating: 2
Yes, it seems like automakers are determining a price to sell their cars then adding $7500 to the total because of the tax credit. That's $7500 in their pockets, not ours and consumers aren't buying it.


RE: That last paragraph
By Mint on 2/1/2013 5:45:03 PM , Rating: 3
You're not paying attention, are you.

This is a competitive market. Ford priced their EV $5000 higher than Nissan's, and as a result sold less than 1/10th of them. You will NOT succeed if you add $7500 to the price that you can profitably sell it at.

Nissan also just lowered their price by $6400 when they got local production started. That is a direct refutation of your claim.


RE: That last paragraph
By Jeffk464 on 2/1/2013 5:34:15 PM , Rating: 2
The ford focus chassis is a much nicer more expensive chassis then what the leaf is based on. Nissan went with the cheapest possible platform to lower the total price. Personally I think Testla's idea makes more sense, if a car is going to be expensive it better be nice.


RE: That last paragraph
By Mint on 2/1/2013 5:51:44 PM , Rating: 3
Much more expensive? A regular Focus starts at $16,000. How many comparable cars are much cheaper?

No way does the Focus EV's chassis account for anything but a small fraction of the $11000 price difference.


RE: That last paragraph
By Jeffk464 on 2/1/2013 7:52:35 PM , Rating: 2
Yup you're right the Nissan versa costs $14,600, I thought they went for about $12,000. I was a nissan mechanic for a couple of years and can tell you they are really cheapo cars, sentras are pretty bad to. The focus is much, much nicer.


RE: That last paragraph
By Jeffk464 on 2/1/2013 11:07:25 PM , Rating: 2
Uhm sounds like I called all nissan's cheapo, nope just the versa and sentra.


RE: That last paragraph
By Manch on 2/1/2013 10:52:38 PM , Rating: 2
Its a lower price because its less of a car. The leaf is air cooled vs liquid cooled for the focus. Theres more tech in the focus than the leaf. Regardless of that they're both rip offs. Just one is less so.

Nissans reduction of the leafs price isn't just because they moved production to the states. It's also because they aren't fucking selling you damn moron. The amount of leafs sold went down by half from 2011 to 2012 in the US, a fourth in Japan and in other countries by half. only Europe did it have an uptick.

Also again there is a 17month spread between when each car was released. The focus wasn't even available nationwide until Q3 2012.

No matter how you try to slice those numbers, the plain simple truth is these cars aren't selling, and increasing the government dole out will not significantly impact the willingness of the public to purchase these types of vehicles.
Since both cars receive the subsidy, both companies profit from it!

Tesla has it right. They charge a lot of money for expensive tech. just like airbags, power windows and everything else that was once the realm of luxury, they will eventually come down in price, and the performance will go up. Then and only then does it make sense for the average buyer to look at these as a viable option.

Pull your head out of your dick and realize that just because people are against subsidies, it doesn't mean they are against the tech.


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