Monday, August 6, 2012

Electric Cars Looking for a Spark

The idea of electric cars has been around for more than a century. In fact, an electric vehicle held the vehicular land speed record until 1900. Henry Ford bought his wife two electric vehicles in the early 1900s. But the costs and the technology have never been just right in order to produce electric vehicles for the mass market.

That was all supposed to change with the introduction of the latest generation of electric vehicles and hybrids. After billions of dollars worth of investments by the auto industry and subsidies from many governments around the world, these vehicles are hitting the showrooms in mass. The only problem is that consumers are steering away from them, particularly all-electric vehicles, in droves.

According to LMC Automotive, roughly 50,000 electric vehicles and hybrids have been sold in the first half of 2012 in the world's major automotive markets. Those markets tracked by LMC include the United States, China and Europe. That figure is well below expectations the industry had for these type of vehicles.

Pure electric vehicle sales seem to need a spark. For example, General Motors (NYSE: GM) had expected to sell about 45,000 of its Chevy Volts this year. But bad publicity has kept sales down, with GM selling a mere 8,817 Volts (a gain of 22% from last year) in the first half of 2012. Sales for the all-electric Leaf from Nissan ADR (NASDAQOTH: NSANY) have been disappointing this year too and have trailed those of the Volt the past several months in the U.S.

On the plus side, hybrids seem to be doing better. The Prius from Toyota Motor ADR (NYSE: TM) have moved away from being a niche car. In the first quarter of 2012 it became the world's third best-selling car with sales of 247,230 cars trailing only the Toyota Corolla at 300,800 vehicles and the Focus from Ford Motor (NYSE: F) at 277,000 vehicles. Sales for even the Prius, however, have fallen back since. By the way, Ford says it will launch this fall the C-MAX Energi to compete directly with Toyota's Prius on price and performance.

So the main problem with the next generation of personal transportation seems to be centered in the all-electric vehicles segment. Why? Most industry analysts point to several factors including performance, comfort levels, improved mileage by internal combustion engine vehicles (Ford's EcoBoost, for example) and most importantly, price. Despite generous government subsidies, electric cars still cost much more than their hydrocarbon-fueled counterparts.

Even some of the major car companies remain skeptical of all-electric cars. Bill Reinert, Toyota's U.S. manager for advanced technology told Reuters “The expectations have always too high for electric cars.” Chrysler, now 61.8 percent owned by Italy's Fiat S.p.A. ADR (NASDAQOTH: FIATY), is another skeptic. Its head Sergio Marchionne has killed plans for a Chrysler electric car. He said a year ago that his company loses $10,000 or more on every Fiat 500 Electric it produces.

Auto industry analysts also remain downbeat on the future of the electric car. PricewaterhouseCoopers Autofacts estimates pure electric vehicles will make up only 1 percent of of the global car market by 2017. Edmunds.com says electric vehicles and hybrids will make up a mere 1.5 percent of the U.S. market by 2017. Its senior green car editor, John O'Dell, describes conditions for electric vehicles this way “It's going to be a slow slog”.

Of course, for every pessimist there is an optimist. GM has made the Volt the centerpiece of its efforts to take the title away from Toyota as the world's greenest automaker. Nissan's CEO Carlos Ghosn is unabashedly the most outspoken proponent of the electric car. He estimates that pure electric vehicle sales (including Nissan's Leaf) will make up 10 percent of the industry's global sales by 2020. It remains to be seen whether he and GM will be proved to be correct or the more cautious approach taken by Toyota and Fiat is the proper one.

This article was originally written for the Motley Fool Blog Network. Make sure to read mt daily articles for the Motley Fool at http://blogs.fool.com/tdalmoe/.

36 comments:

  1. thanks for sharing.

    ReplyDelete
  2. I guess I have selected a mind blowing and interesting blog.
    Electric Saab

    ReplyDelete
  3. The only problem is that consumers are San Diego Solar Install steering away from them, particularly all-electric vehicles, in droves.

    ReplyDelete
  4. Extraordinary work you folks are doing with this webpage. Good Relationship With Shchilian

    ReplyDelete
  5. The lineament of your articles and listing is large.
    Click Pool too You Link

    ReplyDelete
  6. I would be appreciating all of your articles and blogs because they are fitting up mark. Get more info about Onks Design

    ReplyDelete
  7. Your blogs and its stuff are so notable and worthwhile it can make me return.
    Relationship with Cape Seek

    ReplyDelete
  8. I’m definitely coming again to see these articles and blogs.
    payday loans online no credit check

    ReplyDelete
  9. I would be glad if all WebPages provided such type of best articles.
    payday loan online

    ReplyDelete
  10. I even have been gifted for hours and I haven't suffered such awesome stuff. Visit Cagla Yanas

    ReplyDelete
  11. This is a great post; it was very edifying. I look ahead in reading more of your work.
    Get more info about Dj Nahxae

    ReplyDelete
  12. Your articles support me a lot in all mediums of subjects.
    ppi reclaim

    ReplyDelete
  13. I got this blog site through my friends and when I searched this really there were informative articles at the place.
    car accident claim

    ReplyDelete
  14. Thanks for sharing out such a great informative content are extremely fastidious. payday loans online

    ReplyDelete
  15. I think I have never seen such blogs ever before that has complete things with all details which I want. So kindly update this ever for us. ppi reclaim

    ReplyDelete
  16. I am a regular reader of your blog, your idea is really best to explain any topic, thanks for this post, it is one of the best blog i ever read..
    gatwick escort

    ReplyDelete
  17. Great webpage brother I am about to notify this to all of my friends and contacts.
    SDJN 16Z Articles

    ReplyDelete
  18. You have done really a superb job with your web site. Marvelous stuff is here to read.
    More about Forum E-Democratie

    ReplyDelete
  19. Your blogs and its stuff magnetize me to return again n again.
    automobile insurance

    ReplyDelete
  20. This is really quite informative blog such qualitative info I have never seen anywhere.
    social media infographics

    ReplyDelete
  21. The complete blogs are really inconceivable and definitely everyone will share this information.
    infographic

    ReplyDelete
  22. I have looked for so several posts about the blog lovers except this post is of course a nice one, keep on.infographics design

    ReplyDelete
  23. Your articles helped me more in all kind of topics.
    infographics design

    ReplyDelete
  24. congratulations guys, quality information you have given!!! good infographics

    ReplyDelete
  25. I have been really impressed by going through this awesome blog. infographics design

    ReplyDelete
  26. This blog post is really great; the standard stuff of the post is genuinely amazing.cheap car insurance

    ReplyDelete
  27. congratulations guys, quality information you have given!!! auto insurance quotes

    ReplyDelete
  28. Fascinating information I haven’t been experienced such information in quite a long time. cheap car insurance

    ReplyDelete
  29. I get pleasure from reading and revalue your changes.visit us

    ReplyDelete
  30. Hey to everyone, it’s my first visit of the blog site; this blog includes awesome and actually best info for the visitors. comment pirater un compte facebook

    ReplyDelete
  31. I went over this website and I conceive you've got a large number of splendid information,
    vietnam travel

    ReplyDelete
  32. Marvelous work pals, I love reading your articles. Best Infographic

    ReplyDelete
  33. These articles and blogs are truly enough for me for a day. High PR blog post service

    ReplyDelete