Government subsidies also have played a role, according to analysts. Nissan and Tesla were awarded nearly $2 billion between them from the Department of Energy's Advanced Technology Vehicles Manufacturing loan program to build electric vehicles. Many other companies, including EV battery makers, have also received subsidies. "On the surface, it appears to be a huge risk to roll out these vehicles that people might not buy," See said. "But in many cases, a lot of the cost and risk has been subsidized by the government."
Moreover, the appearance of risk may not be as great as it first seems, at least for some automakers. Experts say pure electric cars can be much easier to manufacture than hybrids. "If you look at the Ford operation in Wayne [Mich.], they can do four different kinds of powertrains: conventional engines, plug-in hybrids, conventional hybrids, and electrics," David Cole, chairman emeritus of the Center for Automotive Research, told us. "EV technology is a walk in the park compared to hybrids. You just have to build flexibility into your manufacturing systems."
Still, the road to EV sales success is a hard one. Sales of the most prominent pure electric car available today, the Nissan Leaf, totaled just 8,720 units for the first 11 months of this year, according to plugincars.com, despite company projections that it would sell 500,000 EVs a year by the end of 2013. A Wall Street Journal report this year (subscription required) indicated that Nissan was sticking with its plan to sell 1.5 million EVs cumulatively by 2016, "in part due to demands by major cities for zero-emission taxis."
That's why Nissan CEO Carlos Ghosn has predicted pure EVs will make up 10 percent of the market by 2020. And, as we reported this summer, Tesla CEO Elon Musk took Ghosn's prediction up another notch by saying he believes half of all cars on the road will be pure electric ones in 15 years.
However, industry analysts say much of the auto industry doesn't share the rosy views of Nissan and Tesla. Cole chaired a session at the recent Battery Show Conference in Novi, Mich., and he said automakers expressed concerns at the conference about the state of EV batteries. The sesison was "an opportunity for the automakers to tell the battery guys what the reality is," Cole said. "Right now, the battery is still a killer for them."
Analysts also say the automakers building compliance cars want to be ready if battery technology makes a sudden leap forward. Until then, they're treading lightly. "The bottom line is that the technology is not a slam dunk," See said. "That's why they need to keep looking for the innovation that could make it happen."
Bob Lutz told me before I talked with Mark that the Converj/ ELR should have been on the road by now.
The ELR is perfect for the well heeled who have a high responsibility quotent.
Perhaps the most beautiful American Automobile in many decades. I'd rank it right up there with the one designed my my Friend Gordon Buehrig... the 20Grand.
Holding it back for too long is like shooting youself in the foot.
Yes these cars are conceptually like the WWII submarines... run by electric, built by Electric Boat with motor generator sets in the back and they essentially have unlimited range.
GM's designs are vastly superior to Elon's although he deserves some credit.
GM is not dipping it's toe in the water at all... it's almost up to the knee.
You have to credit Lutz with all this and for those who want to whine and cry about government involvement you should whine and cry about Ed Whitacre who may have known how to build incandescent light bulbs but had absolutely no idea what the hell a Car company is and what makes it go.
Rattner did not know what he was doing in putting ED in charge because important product has been delayed as a result of Ed's cavalier and ignorant attitude. How frequently do you change lightbulb designs? Have they changed yet?
That is something worthy of upset!
And today it was announced that GM has sold more cars in China than the US this past month.
Good point, tekochip. It's often said that it's best to be second. Let the trailblazer make the mistakes. But it's important to be right behind that trailblazer, otherwise you might be left behind.
Professor Michalek and the other contributors, who wrote the paper that was published by the National Academies, were very clear in saying that the Leaf has no emissions from the tailpipe. Their point is that when you weigh the emissions from the battery manufacturing process, and add those to the utility powerplant emissions, the pure electric vehicles don't do as well as hybrids.
No, Architect, I don't think Mark Reuss was joking when he said "electrify and educate." That said, it might not necessarily mean that GM is planning a headlong dive into pure electric cars. He could have been making a reference to powertrains like that of the Chevy Volt, which has gasoline on board, and isn't a pure electric. The reason that some of the experts believe GM is "dipping a toe in the water" with the Spark is that its U.S. sales will be in California initially, whereas companies like Tesla and Nissan are making a broader effort.
Not to mention that donating to the right party ensures taxpayers continue to pay if your R and D goes bankrupt! Nothing like free markets (as dictated by the state and federal government) to stimulate sales <sarc>.
A key sticking point in the business model of electrical vehicles is the resell value. When the owner goes to trade their vehicle after several years of use it is very likely that the battery will require replacement. How could the seller expect to get a decent sales price for the car when any future buyer would also have to splurge for a new battery? I'm not sure about the rest of you but I always look for a good trade-in on one of my older vehicles prior to buying a new one.
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