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Fledging electric car market in turmoil with few buyers
Economic Times ^ | October 5, 2012

Posted on 10/05/2012 3:03:12 AM PDT by Cincinatus' Wife

DETROIT: The fledgling electric car business is in turmoil as predictions about potential sales have proven to be wildly optimistic despite volatile fuel prices and plenty of media hype.

Weak consumer demand is hitting both the big automakers like General Motors and Nissan -- which have failed to meet sales targets on the plug-in Volt and all-electric Leaf -- and smaller start-up firms trying to carve out a piece of a very small niche.

"Electric vehicles don't make any more sense today than they did in 1912," says Sean McAlinden, an analyst with the Center for Automotive Research in Ann Arbor, Michigan.

"They take too long to charge, the range is too short and they cost too much."

Electric cars also face stiff competition from hybrids and improved fuel efficiency in conventional vehicles as automakers update their fleet to meet tougher government standards.

Toyota recently announced plans to drastically scale back the release of its all-electric eQ and Honda has limited the release of its Fit EV to 1,100 US customers over the next two years.

The Chevy Volt -- which can switch over to a regular gasoline engine once the battery runs out of juice -- is by far the most successful electric car in the United States.

After a slow start, Volt sales have tripled this year with help of discounted leases and a decision by California to allow them in fast-moving carpool lanes on the state's clogged freeways.

But sales of 16,348 through September are still far short of the 45,000 Volts that the US Department of Energy forecast in a 2011 report that GM could sell per year.

As fuel prices rise, consumers have been far more attracted to Toyota's Prius hybrid, which saw sales double this year to 183,340 vehicles.

Sales of the all-electric Leaf -- which has a maximum range of 73 miles (117 kilometers) -- are down 28 percent to just 5,212 vehicles in the United States this year despite a major marketing push.

Nissan -- which is preparing to open a new assembly for electric vehicles in Tennessee -- is falling well short of CEO Carlos Ghosn's ambitious goal to double Leaf sales for fiscal 2013.

Only two years ago, the Boston Consulting Group predicted electric vehicle sales could reach five percent or roughly 4 million to 5 million vehicles of the industry's total global sales volume by 2020. Now they are saying electric vehicles might represent just three percent of total global sales.

While the big automakers can cushion their massive investments in electric vehicles with sales of conventional cars, the painfully slow growth and the difficulties in adapting electric technology to the tastes of modern motorists have posed huge challenges for startups.

Tesla Motors is falling behind in its efforts to produce a sleek new electric vehicle, the electric vehicle start-up company spawned by Silicon Valley billionaire Elon Musk acknowledged in a recent regulatory filing.

That leaves the Palo Alto, California-based company in danger of failing to meet the terms of a $465 million Energy Department loan.

Nonetheless, electric vehicles advocates remain upbeat and investors are not shying from the companies.

Tesla was able to raise $128 million by selling new shares of common stock and Fisker Automotive also raised $100 million in new capital last month despite problems with the launch of its extended range electric vehicle, the Karma.

Tony Posawatz, Fisker's third chief executive officer since February, acknowledged the company made mistakes but dismissed a crushing review by Consumer Reports, which described the Karma's design as flawed.

"Customers do like these cars," said Posawatz, a former GM executive who had been responsible for bringing the Volt to market.

Fisker has sold more than 1,000 Karmas, which cost $103,000, since the car went on sale last December.

Posawatz also predicted the technology for electric and extended range electric vehicles will catch on.

"It took 10 years, but the Prius is the best-selling vehicle in California," he said at a recent meeting of the Automotive Press Association in Detroit.

The company is moving ahead with plans to build its next vehicle, a sedan dubbed the Atlantic that will costs roughly half as much as the Karma, and expects to raise another $200 million in private equity funding soon.

Meanwhile, Tel Aviv-based Better Place is looking for new direction after replacing founder Shai Agassi with a new chief executive officer.

TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events
KEYWORDS: cars; economy; electriccars; energy; environmentalists; failedgreen; green
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1 posted on 10/05/2012 3:03:24 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
Journalism is in a sad state when the first word in the headline in misspelled.
2 posted on 10/05/2012 3:09:03 AM PDT by ClearCase_guy (ua)
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To: ClearCase_guy


It’s the Economic Times India, so no excuse.... [can’t say I’ve not made similar goofs — still no excuse].

Did you proof for more, or stop reading there?

3 posted on 10/05/2012 3:13:03 AM PDT by Cincinatus' Wife
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To: Cincinatus' Wife
When I was a kid, I remember the occasional story about how screwed up the Soviet Union was because the government directed all manufactures. What they built was awful. State farms had difficulty meeting quotas because the tractors were always breaking down etc.

Unlike team Obama, at least the Soviets mandated useful items.

What happened to our America? Time is very short.

4 posted on 10/05/2012 3:28:04 AM PDT by Jacquerie (Exterminate rats.)
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To: Jacquerie
I'm 70. We provided the Soviet Union with the machines that made the gears for their tractors when I was a kid.

What you learned was part propoganda. Russia has always had plenty of brainpower but not enough resources for their people. Remember the wheat deal!!

5 posted on 10/05/2012 3:39:15 AM PDT by Sacajaweau
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To: Cincinatus' Wife

It could be that battery operated electric cars are crap in exactly the same vain as global warming?

6 posted on 10/05/2012 3:42:02 AM PDT by ImJustAnotherOkie (zerogottago)
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To: Cincinatus' Wife

I recall reading an article in August that said the Feds were leasing a bazillion (or so :) Volts from GM. But now I can’t find any info on this. Anybody else. The leases supposedly lead to Volt’s “impressive” numbers for 2012.

7 posted on 10/05/2012 3:45:32 AM PDT by upchuck (I miss my dog Snoopy. May 16, 1997-September 24, 2012 -- 15 years, 4 months. Forever in my heart.)
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To: Cincinatus' Wife

This is what happens when private companies allow hippies and eco-fascusts into their boardrooms. First, their emotions trump their tiny brains so bad decisions are made. Then they whine like little girls when those decisions don’t meet their fantastical expectations. And finally, the companies can’t fire some of these morons because they’re affirmative action imbeciles protected by the criminal fascist syndicate occupying Washington.

So what’s the lesson? Don’t hire rats.

8 posted on 10/05/2012 3:47:09 AM PDT by sergeantdave (The FBI has declared war on the Marine Corps)
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To: ClearCase_guy

I like the “idea” of the electric car. Unfortunately the “reality” of the electric car has a Long, long way to go before the two meet.

9 posted on 10/05/2012 3:51:41 AM PDT by The Working Man
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To: Cincinatus' Wife

My wife runs out of gasoline at least 3 times each year and the AAA comes to her rescue with an emergency gallon of gas.
If she were to have an electric car, she’d still run out of fuel and there’d be no way to get her going again.

10 posted on 10/05/2012 3:52:26 AM PDT by BuffaloJack (Obama loved the poor so much, he created millions more.)
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To: Cincinatus' Wife
Best line ever in a TV series was said by the ghost of a medium's father, "Cars that run on batteries? You want to know what runs on batteries? Toys!"

Can't recall the name of the show. Patricia Arquette played the medium. Never knew she was also an Obamoron.

11 posted on 10/05/2012 3:52:54 AM PDT by N. Theknow (Kennedys=Can't drive, can't ski, can't fly, can't skipper a boat, but they know what's best for you.)
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To: upchuck

I believe it was GE who was leasing/buying a bazillion test their plug in stations. IIRC, then Obama put the CEO of GE on the US payroll...personally hiring him.

12 posted on 10/05/2012 3:57:45 AM PDT by Sacajaweau
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To: upchuck

13 posted on 10/05/2012 4:00:00 AM PDT by Sacajaweau
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To: All

If they came up with an electric car that can accommodate shorter trips we live in the suburbs) for under 10k, we would buy it. It would have to be able to go about 50 miles on a charge and should be able to have AC in the summer and heat turned on during the winter. I hate driving the large vehicle around town to run errands.
When they address the needs of the marketplace instead of the needs of DC, we would all be in better shape.

14 posted on 10/05/2012 4:01:41 AM PDT by newnhdad (Where will you be during the Election Riots of 2012/2013?)
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To: upchuck

15 posted on 10/05/2012 4:02:06 AM PDT by Sacajaweau
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To: Jacquerie
I remember the occasional story about how screwed up the Soviet Union was because the government directed all manufactures. .....


You got in line to get a number to get back in another line, only to end up looking at empty shelves.

16 posted on 10/05/2012 4:08:25 AM PDT by Cincinatus' Wife
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To: ClearCase_guy

Fledging is a perfectly good word.

It is probably more accurate than “fledgling”. A fledgling is an immature but viable young bird. A fledging chick still depends on its parents for subsistence. The fledging electric car industry is still chirping away demanding more and more food from its government parents because it cannot feed itself.

17 posted on 10/05/2012 4:09:09 AM PDT by Lonesome in Massachussets (Orwell in the throes of a demonic possession could not have come up with the "tuck rule".)
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To: Sacajaweau; upchuck

And Obama’s EPA (with a free hand giving the finger to Congress) is changing mileage requirements to burden auto makers - raise their prices - to force them closer to the wildly expensive, under-preforming green “toys.”

18 posted on 10/05/2012 4:13:49 AM PDT by Cincinatus' Wife
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To: newnhdad; All
Then there is this on Yahoo finance this morning:

Glut of Solar Panels Poses a New Threat to China New York TimesBy KEITH BRADSHER | New York Times – 1 hour 14 minutes ago

BEIJING — China in recent years established global dominance in renewable energy, its solar panel and wind turbine factories forcing many foreign rivals out of business and its policy makers hailed by environmentalists around the world as visionaries.

But now China’s strategy is in disarray. Though worldwide demand for solar panels and wind turbines has grown rapidly over the last five years, China’s manufacturing capacity has soared even faster, creating enormous oversupply and a ferocious price war.

The result is a looming financial disaster, not only for manufacturers but for state-owned banks that financed factories with approximately $18 billion in low-rate loans and for municipal and provincial governments that provided loan guarantees and sold manufacturers valuable land at deeply discounted prices.

China’s biggest solar panel makers are suffering losses of up to $1 for every $3 of sales this year, as panel prices have fallen by three-fourths since 2008. Even though the cost of solar power has fallen, it still remains triple the price of coal-generated power in China, requiring substantial subsidies through a tax imposed on industrial users of electricity to cover the higher cost of renewable energy.

(I seem to remember that solar panel manufacturing and subsidies for users was what tripped Spain into bankruptcy)

The Chinese government also wants to see the country’s more than 20 wind turbine manufacturers, many of which are losing money, consolidate to five or six. “Wind does not need so many manufacturers,” said Mr. Li, who in addition to drafting renewable energy policies is the president of the Chinese Renewable Energy Industries Association.

(and the final kicker)

To reduce capacity, foreign rivals have clamored for China to subsidize the purchase of more solar panels at home, instead of having Chinese companies rely so heavily on exports. But the government here is worried about the cost of doing so, because the price of solar power remains far higher than for coal-generated power. The average cost of electricity from solar panels in China works out to 19 cents per kilowatt-hour, said Mr. Li. That is three times the cost of coal-fired power.

19 posted on 10/05/2012 4:17:26 AM PDT by spokeshave (The only people better off today than 4 years ago are the Prisoners at Guantanamo.)
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To: Sacajaweau

My point was at least the Russian communists mandated useful manufactures, like farm tractors.

Our communists mandated the Volt.

20 posted on 10/05/2012 4:19:33 AM PDT by Jacquerie (Exterminate rats.)
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