Electric Cars ARE Coming, But It Will Be Slow: Why Is This So Hard To Grasp?

Follow John

2012 Toyota Prius Plug-In Hybrid - production model

2012 Toyota Prius Plug-In Hybrid - production model

Major evolutionary change takes a long time.

That's as true for electric cars as for opposable thumbs--though it will be measured in decades, not millennia.

We frequently have to say that declaring plug-in cars a sales failure after 14 months (as certain commentators have done) is wildly premature.

So let's do a bit of context setting, shall we?

About 17,000 plug-in cars were sold in 2011. In their first year, the Nissan Leaf (9,674 sales) and the Chevrolet Volt (7,671 sales) both outsold the Toyota Prius hybrid on its first year in the market (5,562 sales).

Dueling headlines?

We expect plug-in sales roughly to double for 2012. That produces two possible headlines:

  • Electric car sales double! or
  • Buyers continue to shun electric cars

Each one is defensible, because the latter is accurate in the broader context of the market: Sales of tens of thousands of cars in a total U.S. market of perhaps 14 million vehicles this year are still an unimportant fraction of the market.

We'll likely see dozens of headlines this year, as we did last year, touting the predictions of one industry analyst or another on the increases in electric car sales this year, next year, and through about 2020.

Those estimates vary by almost an order of magnitude.

Utopians vs pessimists

On the one hand are what we think of as the "green Utopians" who believe that by 2020, 5 percent or more of the new cars on sale will have plugs.

On the other hand, the dour pessimists (with German diesel makers heavily represented) say that even 10 years hence, far fewer than 1 million plug-in vehicles--perhaps no more than 500,000--will be sold globally out of production that will have reached 100 million vehicles a year or higher.

Beyond 2020, by the way, we don't pay much attention to forecasts.

Many unknowns

A decade hence, there are just too many variables in play. Factors affecting the cost and range of plug-in cars (the main factors that affect their market prospects) include:

But overall, plug-in vehicles won't be a noticeable fraction of the overall market--by which we mean 1 percent or more--for several years.

In the U.S., that would mean 150,000 plug-ins a year sold out of a 15-million vehicle market.

Doubling every year?

Plug-in sales would have to double each year in 2012 (to 35,000), 2013 (to 70,000), and 2014 (to 140,000) even to approach that level. It took hybrid cars until 2005 to reach that level--or almost six years after the first one went on sale late in 1999.

And the U.S. may be one of the faster-adopting markets for plug-ins. Cost-conscious China isn't likely to be that accepting of pricier electric cars, nor are India, Brazil, Russia, and other expanding economies.

Three Nissan Leafs

Three Nissan Leafs

And those nations are where all the growth in global auto sales is coming from. The U.S., Western European, and Japanese markets are little more than replacement markets by now.

So, most analysts predict that plug-in cars won't reach 1 percent of the global market, or 1 million plug-ins a year, until 2018 to 2020.

Still, they ARE coming

While analysts vary in their estimation of the slope of the adoption curve, virtually all reputable analysts acknowledge plug-ins will come. But, it will be a slow emergence.

This should hardly be news, except to breathless commentators eager for gloomy headlines or particularly uninformed automotive journalists.

One of the big questions is when the tipping point in prices will be reached that consumers can comfortably compare a plug-in car to a gasoline vehicle of equal size and capacity.

2011 Nissan Sentra

2011 Nissan Sentra

Right now, a 2012 Nissan Sentra starts at $16,250, while the 2012 Nissan Leaf starts at $35,200. Those two cars largely won't be cross-shopped--despite the Leaf's much lower cost-per-mile and reduced maintenance costs--because one costs more than twice as much.

Electric cars cheaper, gas cars pricier

But as battery prices fall and electric-car production volumes rise, the plug-ins will get cheaper. And to comply with increasingly stringent fuel efficiency regulations, the price of gasoline cars is likely to rise in real dollars.

That means that, several years hence, today's $17,500 compact sedan getting 30 mpg may be a $19,000 car that gets 40 mpg (note: That's an example, not a prediction). Meanwhile, the plug-in car may fall from $35,000 to $25,000.

Follow Us

Commenting is closed for this article

Take Us With You!


© 2019 MH Sub I, LLC. All Rights Reserved. Stock photography by izmostock. Read our Cookie Policy.