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Five reasons why electric cars are still being produced in limited numbers.

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First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010

First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010

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Chevrolet and Nissan both have electric vehicles set to hit the streets this Fall.  But unless you're extremely lucky the chances are you won't be driving one until at least the middle part of 2011.

Why? Because of limited production runs, demand is outstripping supply. Is it part of some big conspiracy with big oil, automakers dragging feet or a plot to ensure EVs never become popular?

Orwellian conspiracies aside, the answers behind limited EV production runs at the present time are more practical and pragmatic. Here's five reasons why EVs are being produced in limited numbers right now, and why it could be a good thing for the long term EV future.

Limited initial production is less risky.

Making sure that buyers exist for a product even before it is officially launched is a great way to ensure that there is a constant flow of money to help offset retooling costs, research and development and retraining of staff.  As car companies have found to their peril in past years, making lots of something doesn't necessarily ensure it will sell.

Exclusivity comes from limited numbers.  

Remember what happened when the Toyota Prius launched? Every movie star, environmentalist and politician had one. Toyota created a desirable, ecologically sound vehicle which initially had a huge waiting list.

Nothing says desirable like limited numbers, and nothing attracts attention like an unusual car. If you're lucky enough to be an early adopter of the 2011 Volt or 2011 Leaf then expect to be stopped regularly by people wanting to know about your new ride.

2011 Nissan Leaf spied -- via Nissan-LEAF.net

2011 Nissan Leaf spied -- via Nissan-LEAF.net

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Limited initial numbers equals a test fleet.

It's easy to make an electric car, but it's hard to make a good electric car.  With any new vehicle or new vehicle technology there are bound to be some hiccups which need smoothing out along the way.

With any first generation of a new vehicle problems crop up in the wild which were never conceived of in the prototyping process.  Selling a limited number of first generation vehicles allows car companies an easy way to make any final tweaks before ramping up production.

New technology is always expensive.

It doesn't matter if the technology is the latest computer chip, the latest OLED television or a plug-in vehicle; new technology costs more to produce.  Naturally, that cost filters down to the consumer. High ticket items have less buyers and as the cost comes down, more consumers can afford them. By that time, the new technology isn't all that new.

Not everyone is ready for an EV.

brabus smart ev geneva live 005

brabus smart ev geneva live 005

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Unless you're a hardened EV nut or early adopter the chances are you may not be ready for an EV in your life. Not everyone has parking space with power, not everyone is comfortable with the concept of charging up, and not everyone is aware of what driving an EV means.
A large proportion of the population struggle to comprehend how the 2010 Toyota Prius works. In fact, it is often mistaken for an electric car that ‘you don't have to plug-in'.

Range anxiety is also rife. Many consumers panic about being stuck without a charge, a fear the 2011 Chevrolet Volt should easily overcome with its range-extended gasoline engine. Initially, more consumers will feel at home with the Volt than they will with a Leaf.

But until the general image of EVs change, many consumers still feel unable to make that switch.

Developing new products is risky, both to the companies creating them and the consumers buying them. Electric cars are no different. For now, demand outstripping supply is a good thing. It creates buzz, fosters good relationships with natural EVangelist drivers, minimizes risk, and proves the vehicles have what it takes to tackle the mainstream auto market.

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Comments (25)
  1. Add in there "no clear explanation of cost-benefit to consumers." Until someone does a Jobs-like run of the numbers, it's still a mystery to most.
     
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  2. You forgot the most important reason: they're not really cars, yet. They're very good facsimiles, but they lack real range (and the ability to refuel on the road) and they offer minimal if any cargo/utility space for actually doing anything with them except getting around town. And that makes them third cars--a luxury even those who can afford them are skipping these days.
     
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  3. Well I am totally ready for an electric car-but wish it was a bit less expensive because, as you said, there is a risk. Volt would be my choice because I can fill up with gas if needed.
     
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  4. To me the main reason is that the only 'cool' electic car in the market is costing more then 120$ (=tesla)... Once we will have other 'cool' option in around 35-40K then it will be popular.
     
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  5. Wouldn't the final reason--Not everyone is ready for an EV--be a reason for lower *demand*? Sure, if the EV makers project a low demand they will decrease their production. But the fact that demand is outstripping supply implies that either the EV makers underestimated the public's readiness for EVs or your other reasons won out.
    It would be nice to see what the EV makers projected for demand. Have there been any statements from the manufacturers regarding the shortage?
     
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  6. Great post. Here is Ford's CEO discussing this very issue at the D8 conference recently put on by the wall street journal:
    http://d8.allthingsd.com/20100604/d8-video-ford-ceo-alan-mulally-tells-jason-calacanis-why-were-not-going-to-drive-electric-cars-anytime-soon/
     
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  7. I dare say that a higher price isn't making EVs more desirable. A lot of people don't think they're viable now. Yes, hearing that any EV is costly or hard to obtain is going to reach the few who follow the buzz, but the rest are going to take EVs off their lists for a few more years.
     
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  8. Orwellian like corporations buying up electric streetcars and replacing them with diesel buses or acquiring NiMH battery patents? Shucks, this would never happen in a million years. Not!
     
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  9. 90% of my car use is to go places within 40 miles away from my home. Electric cars would basically eliminate any need for petrol ( thank goodness for my wifes gas guzzling car that can take us on roadtrips)
     
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  10. I'm glad at the least that demand is high -- more EVs, says I !
     
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  11. Flat scree tv's and cell phones were all in limited supply (and expensive) at first. That is always the way with new tech.
     
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  12. Good post…I agree small numbers will be the early adopters that will understand how to work around the range issues. I myself will not have a problem with the range. I drive less than 40 miles a day.
    The other thing is it will buy them time to develop the second Generation batteries that will have further range at a lower cost. I believe Nissan is already saying that the 2nd gen will have a 200 mile range.
     
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  13. i thought the above url was interesting. this mini-cooper has an electric motor in each wheel.
     
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  14. great post! i think number 3 is an extremely powerful reason for limiting a larger "release" - there absolutley will be some "hiccups" and the media, negative nellies are definitely ready to pounce
     
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  15. Limited initial is less risky: no, limited production=high production cost=failure guaranteed.
    Exclusivity comes from limited numbers:so do high prices which work against adoptation.
    Limited initial numbers equals a test fleet: test projects date back decades. At some point it's enough and mass production needs to commence.
    New technology is always expensive: it is until you start to turn out big numbers.
    Not everyone is ready for an EV: you can do hundreds of thousands of units per year and still only have a negligible marketshare: not everybody needs to be ready.
    This leafs "Orwellian conspiracies" as the only plausible explanation for the lack of serious EV production. When GM terminated it's EV program in a scorched earth kind of way, crushing the lot of them and selling the NiMH battery patent to Chevron they delayed serious EV production by at least a decade.
     
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  16. I dont know it is so hard for people to grasp. There are no enginerring or technology barriers preventing the wide-spread production of EV's. Any "problems" that needed be worked out, were worked out decades ago,or if you want to go back to the start of things, a century ago. I still dont understand why even some(many?) EV advocates still believe some mystical enginerring hurdle has still to be "solved" before we see EV's sold at the local car dealer like gas powered mobile trash bins are now. The tecnhology is ready NOW-has been for long time, and there is also a real market desire for such vehicles. Thats really all there is to it. Of course, with the industry promoting the hydrogen FCV hoax and takeing the time to develop a completely unnecessay and (inferior) battery technology(Li-on) for EV's, the only real result is to keep the world safe for gas-powered trash bins.
     
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  17. "No guts, no glory, LOL." "Lead, follow, or get out of the way."
     
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  18. the above link (click on my name) gives an overview of motors in wheels. the article has several pages.
     
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  19. I'm still not convinced the current EV technology is what will save our environment. You still have to produce this electricity, ant those batteries contain a lot of nasty chemicals...
     
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  20. Is it just me, or is the comment volume picking up here recently? Good work Nikki. Keep it up.
     
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  21. I don't understand why electric cars are evpensive they are less complex than a gas car less expensive to build (moters in wheel) I am a 30 year machinest and can not see the expence. the thing that I see is 4000 less parts very expensive to make parts (engine,trans,belt systems rear ends) why is"nt the ev less money????????
     
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  22. they will be, when they get mass produced.
    currently, demand far outstrips supply - no reason to reduce prices any further.
    while i think it will one day become standard, the motors wont be in the wheels with these first releases.
     
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  23. Another bigger impediment to EV production is rather obvious, nobody makes enough batteries. Many companies are still building factories to produce quantities large enough to support the auto industry. So until those factories come on line, there just aren't enough out there to support mass production of EVs.
     
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  24. Here's a little Orwellian storyboard.
    Read this 14 year old press release -
    http://www.megawattmotorworks.com/display.asp?dismode=article&artid=305
    then read this -
    http://en.wikipedia.org/wiki/Patent_encumbrance_of_large_automotive_NiMH_batteries
    Then come to your own conclusion.
     
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  25. Great summary on the issues - Nice job on this one Nikki!
     
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