Electric Cars Could Flop

Global sales of all types of electric-powered vehicles is expected to be under 1 million units of the estimated total of 44.7 million units that will be sold in 2010. By 2020, nearly 71 million new vehicles will be sold, of which some 5.2 million are expected to be electric.
These numbers come from a new research report by J.D. Powers and Associates.

The auto industry research firm concludes that without one or a combination of three factors, buyers will not be lured by electric-powered vehicles. First, oil prices would need to experience “a significant increase”. Second, the technology needs to get cheaper and consumer confidence in the technology needs to rise. Third, government policy must incentivize customers to buy the vehicles. The report’s conclusion: “Based on currently available information, none of these scenarios are believed to be likely during the next 10 years.”
This conclusion should come as no surprise. For all the hype surrounding electric vehicles, and some fairly generous government subsidies in many countries, consumers just aren’t convinced the electric cars are worth the money. And that’s really what it’s all about.
Spending more than $40,000 (or something less depending on the government subsidy level) for what is essentially a compact car has little appeal to a wide audience. The report notes that buyers of electric cars are “generally older, more highly educated (possessing a postgraduate degree), high-income individuals who have a deep interest in technology, or who like to be among the early adopters of any new technology product. As a result, it is not clear that [electric vehicles] will appeal to the general population.”
Adoption of electric cars is constrained now, as it was 100 years ago, by concerns about the vehicles’ limited range, recharging times, lack of support infrastructure, and the high cost of batteries. Car makers and others are working on these issues, but if they were easy they would have been solved long ago. Battery technology, which is definitely getting better, still needs a major breakthrough before range and cost issues will be put aside.
The J.D. Powers report also notes the obvious issue of replacing tailpipe carbon dioxide emissions with emissions from coal-fired electricity generating plants. Perhaps electric car boosters and governments have ignored that issue, but consumers won’t.
Paul Ausick