Will Range Anxiety Impact Electric Car Sales?
I have always liked the concept of electric cars. I could imagine a future in which fleets of electric cars are being charged by electricity from clean sources, and where the impact of peak oil won’t be especially burdensome. In a story I did last year covering a newly-released report on electric cars, the advantages of electric cars were given as:
1. Electric cars improve the security of vehicle energy supply by avoiding liquid fuels that are often imported from hostile or politically volatile countries and are being discovered at a slower rate than they are being depleted.
2. Electric cars offer much improved air quality in cities.
3. Electric cars offer drastically reduced traffic noise.
4. Electric cars offer less CO2 emissions if the electricity comes from nuclear, hydro, solar, wind or perhaps biomass.
5. Electric cars are sometimes more efficient than petrol or diesel cars.
But imagining and achieving are two very different things.
I have watched with great interest the evolution of the Chevy Volt and Nissan Leaf from the original announcements to present day, where the vehicles have started to become available for consumer purchase. In fact, the first deliveries of both were made by the end of 2010, and I thought this development was significant enough to warrant a spot in my Top 10 Energy Related Stories of 2010.
A recent story provided sales figures for both cars, and another hinted at trouble with the Leaf:
Peruse Chevrolet‘s February sales release, and you’ll notice one number that’s blatantly missing: how many Chevy Volts were sold. The number – a very modest 281 – is available in the company’s detailed data (PDF), but it apparently isn’t something that GM wants to highlight. Keeping the number quiet is understandable, since it’s lower than the 321 that Chevy sold in January.
Nissan doesn’t have anything to brag about here, either (and it avoided any mention of the Leaf sales in its press release). Why? Well, back in January, the company sold 87 Leafs. In February? Just 67. Where does that leave us? Well, here’s the big scorecard for all U.S. sales of these vehicles thus far:
- Volt: 928
- Leaf: 173
In response to that story, GM replied and said that deliveries of the Volt were on target, and they projected sales of 10,000 vehicles this year:
The Volt production launch is on schedule to build and sell every one of our 10,000 units this year. Through February, we produced over 1,800 vehicles – 925 of which have been sold at retail. Production volume will gradually increase each month throughout the year. However, over the next few months we will be shipping Volt dealer demo vehicles and vehicles to our coastal launch markets which takes longer than delivering them to nearby states. This situation should be resolved by May, after which the number of Volt’s sold will rise.
There is no demand issue; ask any dealer in a launch market. This is a temporary situation. The Volt launch is on time and on target.
So GM’s expectation is that there will be a respectable number of Volts on the road by year end. We shall soon see whether the slow initial sales are a sign that consumers remain nervous about electric cars. (Update: One reader wrote and said that he had tried to buy a Volt, but that dealers are all charging $8k-$12k over MSRP due to high demand. So at least in the case of the Volt it appears that production limitations are the issue).
The Leaf may be a different story. Early reports won’t inspire confidence.
Reports of Stranded Leafs
How has performance been for the vehicles that have been sold? I haven’t seen any reports on the Volt, but apparently some Leaf owners are complaining that Nissan’s claimed 100 mile range for the Leaf isn’t holding up in practice:
Now that electric-powered Nissan Leafs have been driven by the first owners for several weeks, Nissan’s claimed 100-mile range is being tested in reality. The result? Reports of Leafs running out of juice and stranding drivers with little warning.
The Leaf’s software is supposed to give drivers gradual warnings as they discharge the 24 kWh battery pack, with several visual and verbal notices including a “–” on the miles-to-empty indicator before the turtle icon switches on. But that wasn’t the experience of a Leaf owner from San Diego last month, who was the first to report a shut-down:
“Went from 17 to — to turtle to dead in about 5 miles. 2.3 miles from dealer. 4.2 miles from home. Part of me is amused that I may go down in history as the first dumbass to drive the car into submission. But I am slightly shaky and upset as I thought there should have been no problem getting home.”
Another owner suffered a similar experience, leaving the Seattle airport last month for a 15-mile drive home with the Leaf reporting enough power for 26 miles:
“Around downtown the range is down to 8 miles (still plenty to get home, which was by then 5 miles away). At the ship-canal bridge it went into turtle, I barely got off the freeway. 2 Mile from home and after about half the distance it told I would have from the airport, i.e. 13 actual miles driven, it went dead. I actually managed to drive 400 yards in turtle mode. 10:30 pm, wife and screaming kids in the car (which was blocking the right lane of a busy road), just came back from the east coast, cars zooming by and honking, several near misses.
One thing consumers aren’t going to tolerate is being randomly stranded by their new car. It is far better and will be more acceptable to consumers to have a conservative range reported, than a best case scenario that is atypical and leaves motorists stranded. Having a car go dead in heavy traffic is a very stressful experience for a driver, and one they will go to lengths to avoid.
The ‘Green’ Question
One reason many people are buying electric cars is because they are viewed as ‘greener.’ Is that true? Not necessarily, according to a report released last year that investigated the issue. The author’s conclusions were:
1. Globally, most electricity is produced using highly environmentally damaging sources, and much of it is produced from fossil fuels. There is unlikely to be a significant change in the way this majority of electricity is produced in the foreseeable future.
2. Although there are alternative forms of electricity production that cause less harm to the environment than conventional forms, these forms are invariably far more expensive, and are therefore unlikely to be adopted en masse in the near future. Thus, the central premise behind the electric car movement – that electric cars will be powered primarily from ‘green’ sources – is essentially wishful thinking. The car driver generally has no control over how and where the electricity that powers his car is generated. Electric cars do not stop environmental damage: rather, they tend to merely move it out of sight, from the highways to the power plants.
However, he does concede that electric cars can be greener, depending on how the electricity is produced:
In four of the five countries we surveyed, the Tesla electric car was less efficient and more polluting than its petrol sibling. Only in New Zealand – where the majority of electricity is produced by hydroelectric generation – was the Tesla ‘greener’ than the Elise. However, a New Zealand scientist recently predicted that if the New Zealand car fleet was replaced with electric cars, the country would probably need to build coal power stations to meet the increased demand.
Over the next year we will learn whether consumers are ready to embrace the electric car. The high cost remains an issue. While the cost of the average new car in 2010 was $28,400, the Chevy Volt’s MSRP is $41,000. The Volt qualifies for a $7,500 federal tax credit, bringing the cost down to around $33,500. This is still quite high for a mid-sized car, but as long as gasoline prices remain at present levels, the fuel savings will add up quickly. Speaking of fuel, one reason for the Volt’s high starting price is that it isn’t a pure electric car; it does have a gasoline engine that kicks in after the Volt’s 40-mile-range has been exceeded.
The 2011 Nissan Leaf, on the other hand, is a smaller, pure-electric car and has a more affordable starting price of $32,780. This is high for a hatchback, but the Leaf also qualifies for the tax credit, bringing the cost below that of the average new car. The flip side, of course, is if the batteries are drained you will be stranded as some Leaf owners have already reported.
After the initial purchase, customers should begin to see fuel savings, but looming over their heads will be the need to replace the batteries at some stage. The Leaf warranties their batteries for 100,000 miles, after which customers will spend a reported $18,000 to replace them. There really isn’t a comparable expense for cars with internal combustion engines.
But the first threshold will be to see if consumer demand is high enough for electric cars to finally become anything other than the next best thing.