Why do electric cars exist? Buyer demand? Legislation? Or VW?


2016 Nissan Leaf

2016 Nissan Leaf

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Owners love them, but modern electric cars have not made a large dent in sales of internal-combustion cars since becoming widely available five years ago.

In fact, but for a few exceptions, electric cars essentially wouldn't exist without legislation aimed at lowering transportation-related carbon emissions.

Tesla's success in raising the profile of electric cars is remarkable, but the company has lost money for a decade straight.

DON'T MISS: German upper house asks EU to ban new gas, diesel car sales by 2030

Nissan has faithfully promoted its Leaf electric car, and while the hatchback is the best-selling electric car in history, it's just a drop in the bucket compared to the millions of gasoline cars and trucks Nissan sells globally every year.

Yet the slew of electric-car concepts and promises for future production models—at the 2016 Paris Motor Show—indicates greater manufacturer interest in cars with plugs.

Nissan and Tesla have been quick to take credit for this trend, but it's really policymakers that are responsible for the surge in interest in electric cars, argues WardsAuto editorial director David Zoia in a recent piece.

2016 Tesla Model S

2016 Tesla Model S

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Because while electric cars make sense from a policy standpoint, they still don't make much sense for automakers from a business standpoint, he suggests.

Electric cars currently account for 0.4 percent of the U.S. new-car market, and make up a similar share in many other world markets, according to Wards data.

Most of those models are not turning a profit for their manufacturers, Zoia claims.

ALSO SEE: Mercedes previews new electric car lineup with Generation EQ concept

But countries like China, The Netherlands, and Norway offer generous incentives to consumers, making electric cars more attractive and increasing demand.

And policymakers in some regions have also forced the issue. Manufacturers selling a certain number of cars in California have been required to build and sell low-volume "compliance cars" purely because of the state's zero-emission vehicle mandate, for example.

The global climate-change agreement resulting from the recent Paris conference will only increase that pressure, leading to tougher limits on vehicle emissions—and greater pressure to build zero-emission electric cars.

Volkswagen I.D. electric car concept, 2016 Paris auto show

Volkswagen I.D. electric car concept, 2016 Paris auto show

Enlarge Photo

On top of growing legislative pressure, the ongoing Volkswagen diesel scandal may have convinced automakers that electric cars are the best way to meet tougher emissions standards.

VW itself has promised a new compact electric car, an electric version of its Phaeton luxury sedan, and electric models from its Audi and Porsche brands over the next few years.

The scandal has also shaken European consumer confidence in diesel, threatening what is currently the largest market for diesel cars.

MORE: Volkswagen ID: more details of all-electric concept car at Paris Motor Show

When news of Volkswagen's emissions cheating broke last year, many electric-car advocates responded with what could almost be described as glee.

They saw the scandal as an opportunity to force one of the world's largest automakers to put significant resources into electric-car development.

Perhaps history will show that they were right and that, in its own way, Volkswagen was as responsible for mass electric-car adoption as Tesla or Nissan.

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