Electric Currents

Why'd America Miss Its Million EV Mark?

Feb 08, 2015

There are some 280,000 plug-in cars on the roads of America, according to the EDTA, but that's 720,000 cars short of President Barack Obama's 2011 State of the Union goal of a million. What happen and who's to blame?

It's 2015 and there aren't a million electric cars on America's roads.

Ergo: Obama is a failure.

That's the sense I get reading headlines like this one: "Obama's Prediction of a Million Cars on Road By 2015 Off By 72%".

You'll recall that in the President's 2011 State of the Union address he "called for putting one million electric vehicles on the road by 2015." He didn't "predict" there would be one million. It was a goal, one that was clearly understood to be "ambitious." The underlying objectives were clearcut:

• reduce dependence on oil
• enhance environmental stewardship
• promote transportation sustainability
• create high quality jobs
• stimulate economic growth

To achieve these, the administration established a number of funding initiatives for both consumers and the industry: tax rebates up to $7,500 on the purchase of a plug-in vehicle, and loan guarantees to car manufacturers, including Nissan, Tesla and Fisker, as well as significant funding to help speed battery development and lower costs.

All this in four years. It took twice that long to put men on the moon.

At the time the administration was preparing that SOTU address, the industry and the media were making their own predictions. States of U.S. Energy Department's 2011 report:

Although the goal is ambitious, key steps already taken and further steps proposed indicate the goal is achievable. Indeed, leading vehicle manufacturers already have plans for cumulative U.S. production capacity of more than 1.2 million electric vehicles by 2015, according to public announcements and news reports.

The DoE's "One Million Vehicles By 2015" Status Report, carries an interesting table entitled, "Estimated U.S. Supply of Electric Vehicles from 2011 through 2015." It lists eleven vehicle models, of which only five remain in production. All the others have either suspended production or gone out of business. If all eleven had remained in business and met their production goals, we'd be well past the 1 million mark.

The two most glaring missed production goals in that table are the top two selling EVs: the Nissan LEAF and the Chevrolet Volt. Both were supposed to be selling more than a 100,000 units annually by now. Nissan sold just over 30,000 LEAFs in 2014 and GM sold less than 20,000 Volts. Only Tesla has come close to meeting its production estimates of 20,000 units annually.

So, despite laudable government and industry efforts to spur the market for electric cars, public uptake has been slower than expected. Why?

EV economics represent a significant barrier to entry. While they are much cheaper to operate on a daily basis due to the low cost of electricity, the upfront costs are considerable and their uncertain resale value poses yet another obstacle to ownership. Yes, there are some pretty enticing leases out there, especially on the Nissan LEAF, but in the end, you're only borrowing the car for a few short months and in the end, you have nothing to show for the investment. There might be a business case to be made for this approach, but it's doubtful a family could justify it.

But beyond the questions of economics and 'range anxiety' loom equally daunting obstacles to mass adoption:

Limited Availability - Walk into any car dealership and count the number of EVs on display. Electric cars are not the mainstay of your average dealership's stock and trade. It's gas-burners, the bigger, the better. SUVs, pickups: those are the big sellers: the bread & butter of the business. EVs just aren't a priority. Margins are thin and after-sales support, minimal. There's a reason Elon Musk refuses to sell his electric cars through traditional dealerships. Their hearts just aren't in it.

Limited Models - There's the LEAF. There's the Volt. That's it, folks. Sure in California you can find a few more models available, but for most of the rest of the country, you're pretty much limited to two choices. Where's that PHEV pickup? Where's the EREV crossover? Where's the hybrid minivan? They don't exist, at least not yet.

Limited Households - A car that requires easy access to an electric plug automatically limits its appeal to a certain subset of the market: single-family homes and only those with off-street parking. Something like 40% of Americans live in multi-family dwellings: apartments and condos where access to electric power may not be convenient or even feasible.

Limited infrastructure - With government assistance, thousands of public and private charging stations have been installed, usually in select cities where there have been strong hybrid car sales, typically on the coasts. Those are the exception, not the rule. While experience has shown those charging stations often get very little use, they are, nonetheless, important public confident builders in the technology. I'll bet you can tell me the location of at least three gasoline stations near your home. Can you list three charging stations? I can't.

Limited Experience/Exposure - Pretty much everyone alive today in American has ridden in an automobile, likely starting at a very early age. We are comfortable with the experience of motoring down the road on petroleum. Few of us can make that claim about an electric car. It is not a part of our cultural vocabulary. How many of us have even ridden in a modern EV, much less driven one? We simply have no experience with them and that colors our view of them, right or wrong.

Limited Incentives - Experience shows that incentives make a difference, and not just the fed's $7,500. There's a reason Norway now has more EVs per capita than another other country on the planet - many of them Teslas. Strong incentives. The same story in the state of Georgia, at least for the moment. Strong incentives. We know that where there are proactive state incentives in place, sales of EVs are strong. And it should be noted that those incentives don't have to be in the form of tax subsidies, as Oregon has demonstrated. Conversely, where incentives are meager or non-existent, sales wither.

There are ways to solve all these, but the work-arounds will take time; and yes, money, but maybe the most difficult of all, a change of heart. Somehow, someway, we need to understand why this transition is important. I think too many of us are still stuck in the 20th century, figuring the party fueled by cheap oil will just keep going and there won't be a price to pay at the end of the day.

That we missed the President's 1 million EVs by 2015 target isn't his fault. It's ours, collectively.

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