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."
The most valid point is that you want to be doing your development work when your competitors are doing their development work. It would be disastrous to start development on a new technology after your competitor already has a product in the marketplace.
tekochip, you are exactly correct. I read an article in IEEE Spectrum some time ago that lays this situation out exactly. The author was hired into a company as a VP or R&D. He was working on a product and well into the development he decided it was not going to be a success. He went to his boss to suggest they can the project. He was told no! The first version of the product needed to be in the market almost as a placeholder. The real money would be made on future versions, but if they weren't in the market they would not be taken seriously when it finally took off.
Electric vehicles are the same thing. California required them several years ago. That was before the global warming scare but during a period of tight gasoline supplies and high prices. It was not successful. The compliance vehicles built then were not very good, but the companies complied, and they gained some knowledge of the issues with these vehicles. I see the same situation with the large makers at this time.
Tesla, of course, is another story altogether. They are a car company built around the pure electric vehicle. They have a plan, which they are executing well, to start with higher end cars, which are basically novelties, and to then move into mass market vehicles as the technology progresses.
There is a serious, well based study published in "ISSUES in Science and Technology" by the "National Academy of Sciences", "National Academy of Engineering" and the "Institute of Medicine, University of Texas at Dallas", that shows that purely Electric vehicles actually produce MORE emissions when their complete life-cycle emissions are considered, compared to Hybrids. http://www.issues.org/28.4/p_michalek.html
The problem is that ignorant, mis-informed politicians (specially those with so called "Ecological" viewpoints) make whatever it takes to impose whatever they (blindly) believe, in order to promote what they guess are "green" alternatives. Just from a purely scientific and technical viewpoint, having to build, activate and carry a heavy, inefficiently recharged large battery all along the road, and then having to dispose of it; is not as smart, notwithstanding how deep is the "greenish" tint of the politician sunglasses.
I'm patiently waiting to see the face of our former City Major (he stepped down yesterday), when he realizes that He will soon need to replace the very expensive battery of his Nissan Leaf. He ordered a fleet of Leaf taxies for Mexico City, and drivers are finding those barely endure their distance ratings, and are slower than predicted, barely handling the aggresive traffic of the city.
When we talked to the author of that study a few weeks ago, however, he said this: "We've been trying to put this in the hands of policymakers. But the policy process is about what's good for the country and what's possible. There's no window right now for making changes to policy."
None of the manufacturers seem to be targeting the best market for EV's, which is the Lght Commercial Vehicle market. These vehicles often work highly predictable routes, often only within urban areas, and are rarely used for non-work missions (ideally....). Piaggio experimented with a lead-acid battery powered mini-pickup. But no, the car manufactuers are trying to market a family saloon with the engine taken out and an electric motor stuffed in its' place, with the battery in the boot (trunk - US). The proper course of action would be to design electric from the wheels up, not doing a chop-job on an existing chassis. So it's not so much about creating a viable product as it is creating an illusion of "green" for posers.
Yes, I think you nailed it there. Clearly, they're not expecting record profits from the BEVs - not yet at least. These are learning vehicles - to learn the technology, to understand the market, to see which features are most and least interesting to customers, and just simply to make themselves known as forward-looking companies.
I don't know, I'm thinking of getting an EV the next time around.
Most families have more than one vehicle, and ours is no exception. I work at home, or have a close commute, and make trips to the airport as often as I can. A low range vehicle would work quite well for me and most commuters. I mention the second car because when a longer trip is needed, our family would still have an IC vehicle for the long haul. I think an EV as a second family vehicle is a good idea, if only the ROI would work out in the vehicle's favor.
We don't need a replacement now, but when the time comes I will consider an EV.
Tekochip, you are telling us that the market for EV's is as the customers' second vehicle, not primary. If thats the case, manufacturers should be more focused on the target. The family second vehicle is usually smaller, cheaper and less capable than the first. Don't forget that there is a market - with different requirements and expectations- on the other side of the pond, too.
I asked several automotive excutives that same question several years back. However, from a different prespective. I asked what would it take to get them to build EV's? Was it the federal government? No was the answer. Was it the emissions regulations? Again, No. Was it fuel economy? No. They said the american public are in love with cars and would live in a hotel first before getting ride of their car. Then what will it take for them to produce EV'S? Simple they said its the competition for market share.
BTW: EV's are the same as fuel cell vehicles. EV's use the battery as the energy source and Fuel Cell cars use the fuel cell as the energy source. I guess if you could build a small enough nuclear power plant that would work as well. 50% of the EV would not change. The power source will continue to evolve. We could even use coal.
From another point of view there will come a time when folks will simply by a fuel cell EV. Drive it home and plug the house in to the car becasue the car's energy source will produce energy cheaper then what we pay the utility company.
All this wondering about EV's. It is easy to understand why they are building them, government intervention in the automotive market. With California's looming ZPV requirements all the manufacturers need to be positioned to say, we build an electric car people just won't buy it. The feds also subsidize hybrids and electrics so the R&D costs the manufacturers less. As to the need for pure electrics, with the environmental zeal shown by many, if electrics made sense they would sell like hotcakes.
Tesla Motors plans to roll out a “compelling, affordable electric car” that will sell for about half the price of its high-profile Model S by the end of 2016, company chairman Elon Musk said last week.
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