Nissan Leaf electric carHow's that electric car revolution going?

It depends on whom you ask:

  • Year-to-date sales of the electric Nissan (NSANY) Leaf are down over 30%.
  • Ford (F) had sold just 177 of its electric Focus through August.
  • At the same time, production of Tesla Motors' (TSLA) hot-looking -- and expensive -- Model S sedan is sold out for months to come.
  • Meanwhile, the Chevy Volt is selling a bit better lately -- but that's a mixed blessing for General Motors (GM).

How to Lose Money on a $39,995 Sale

Why are improving sales for the Volt a mixed blessing? It turns out that those sales are expensive ones: Reuters recently reported that GM is losing a bundle on each Volt it sells -- despite the little plug-in hybrid's steep $39,995 base price.

While GM took issue with Reuters' math, it's clear that the innovative car isn't a moneymaker for General Motors. With sales of just a few thousand in the best of months, it'll be many years before the car manages to repay its development costs, estimated at over $1 billion.

Now, that's not necessarily a bad thing, at least in GM's view. Like other automakers, GM is looking ahead toward the next decade, when fuel-economy rules will be much stricter. From the General's perspective, the Volt represents an early investment in the kind of technology that GM -- and other automakers around the world -- will need to perfect before those rules go into effect.

There's some validity to that argument. But that hasn't stopped GM's critics from complaining that electric-car technology is turning into an expensive boondoggle.

Will Electric Cars Ever Take Off?

A Washington Post editorial this week took the Volt to task, as part of a larger argument against the U.S. government's subsidies of electric car technology. The Department of Energy said in 2011 that there could be 1 million electric cars on U.S. roads by 2015, but as the Post points out, that's looking pretty unlikely right now.

The Department of Energy's conclusion was based on a study that made some assumptions that look kind of silly now. It expected Nissan to sell 25,000 Leafs this year. But through August, the automaker had sold fewer than 5,000 here in 2012. It also predicted that GM would sell 120,000 Volts this year. The reality: Fewer than 14,000 Volts had been sold through August in the U.S. in 2012.

Both of these cars, like much of the still-emerging U.S. electric-car business, were heavily dependent on government aid. GM's massive bailout is no secret, but some of the other Department of Energy aid programs are less well-known: Among other grants and loans, Nissan received $1.5 billion in low-cost loans to refurbish the Leaf's Tennessee factory, and Tesla got a $465 million line of credit to help get the Model S into production.

And what are taxpayers getting for all that? Not a whole lot.

'Success' for Electric Cars Is Relative

So far, Tesla is the big success story in the electric-car game -- but that success is relative. Tesla has more than 10,000 orders in hand for the Model S, a luxury sedan with the best range in the electric-car business.

That's huge for the Silicon Valley automaker. But it's just a drop in the bucket in terms of the overall automotive market: Tesla may sell 20,000 cars next year -- and it'll be considered a big success if it does -- but that's fewer than half the number of F-series pickups that Ford sells every single month.

That's a long way from the million a year that the government anticipated, and it's a long way from making any sort of difference on the environment.

A Dire Trend

And that's the real problem with electric cars: So far, not too many consumers are lining up to buy them. Eco-conscious drivers still prefer hybrids like Toyota's (TM) popular Prius, which can be refueled at any gas station -- and that doesn't seem likely to change soon.

That means electric cars might be doomed -- no matter how much the Department of Energy wants to see them happen.

Nissan Leaf Design

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford, Tesla Motors, and General Motor,s and have recommended creating a synthetic long position in Ford.





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44 Comments

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babs and michael

Massachusetts is the US green bubble capital. A123 Battery Systems is Boston-based.

Dec. 29 (Bloomberg) -- Fisker Automotive Inc., which is beginning to sell plug-in electric sports cars, said it is recalling 239 Karma cars in the U.S. because of a battery defect supplier A123 Systems Inc. announced last week.

http://www.businessweek.com/news/2012-01-02/fisker-recalls-karmas-after-a123-reports-battery-defect.html

Consumer Reports' $100K Fisker Karma dies on arrival

http://content.usatoday.com/communities/driveon/post/2012/03/consumer-reports-fisker-karma-breaks/1

'Taxpayer-funded A123 Green Energy Company Handed to Chinese'

http://commonamericanjournal.com/?p=48736

September 25 2012 at 8:56 AM Report abuse rate up rate down Reply
Mike

if they firgured out to run a car on water Standard Oil would own all the water, once they get these electric cars right the cost per mile will be the same or more than gas. Understand it doesn't matter what you run the car on, they got ya, unless you take a subway, they got ya.

September 21 2012 at 7:44 AM Report abuse rate up rate down Reply
Mike

if they firgured out to run a car on water Standard Oil would own all the water, once they get these electric cars right the cost per mile will be the same or more than gas. Understand it doesn't matter what you run the car on, they got ya, unless you take a subway, they got ya.

September 21 2012 at 7:44 AM Report abuse rate up rate down Reply
Frank Smith

Recently a coal train derailed in Maryland. What if that train was carrying "clean" Gasoline when it derailed? The city where it happened would have been burnt to the ground and the nearby river polluted. Instead most of the mess was cleaned up with dump trucks and bucket loaders. Think about the recent Gulf Spill or Exxon Vadez before you say Oil is clean. Solar and Wind are our best "clean" energy solution.

September 17 2012 at 9:03 PM Report abuse +1 rate up rate down Reply
vondeck

Electric cars are not clean energy. They need to be pluged into the national electric grid. The electric grid is run with over 50% coal and throw in some nuclear not clean at all. It takes more energy to run an electic car than it produces.

September 17 2012 at 8:23 PM Report abuse rate up rate down Reply
1 reply to vondeck's comment
Frank Smith

To drill for oil takes electricity, to pump it out of the ground takes electricity, to refine it takes electricity. So before you even get gasoline from crude oil you have used more electricity than an EV would use going the same 40 miles that the resulting gas will take you. And where does the electricity come from to Drill, Pump and Refine Oil. Mainly coal. Electric cars are actually more efficient than GAS cars. 80% of the energy in gasoline is wasted as heat in a GAS car. Only 20% of the energy results in the turning of the wheels.

September 17 2012 at 8:55 PM Report abuse +1 rate up rate down Reply
2 replies to Frank Smith's comment
chris1011

The Volt is actually an electric car with a small gasoline generator attached to the battery so you can continue to drive past 40 miles, all the way to 400 miles, if you need to. When on pure electric, it gets the dollar equivalent of around 130mpg. When running on the gas generator, it gets at least 40mpg, so with its 10 gallon tank it can actually go 440 miles on one tank.

Where I live we have power generated by Nuclear and wind, no coal at all. The cost to me is 4 cents per kwhr. If I'm running my Volt on pure electric, it takes approximately 20 kwhrs to go 40 miles. The cost for commuting that 40 miles is 80 cents. If I was using my gasoline car that gets 18mpg in the city, it would cost me $8.90 to go that 40 miles.

In a recent time period of approximately mone month I compared the cost of running the Volt with that of our midsize sedan. We put $240.80 worth of gas in the sedan, most of it city driving, commuting (1100 miles). In the Volt we went 1400 miles, used 1.8 gallons of regular ($6.93), and used $26.50 of electric power. I figure that in a typical year of driving I'm saving anywhere from $2800 to $3500 in gas cost. That's no small change and it adds up over time.

The Volt is not a small car, and it can haul just as many humans with all their typical stuff as any midsize sedan. Yes, it's a bit of an inconvenience to plug it in at night, but you get used to that. On a typical day of driving, it recharges in less than 4 hours while we're sleeping.

September 18 2012 at 8:18 PM Report abuse rate up rate down
Sleel OfWpg

Except, like many, you conveniently ignore the production costs of those 'green' cars. It takes massive amounts of energy to mine the rare earths that go into making those advanced batteries. They are shipped back and forth across various oceans during the manufacturing process, which uses more energy, since no company makes all the parts and assembles them in one country. So "green" cars aren't even remotely that.

September 28 2012 at 10:56 PM Report abuse rate up rate down
whitgallman

did I mention NO OIL CHANGES and very little other maintenance. Brakes last a long time too because regenerative braking does most of the stopping. Now if I can only stop smoking the tires.

September 17 2012 at 7:30 PM Report abuse +1 rate up rate down Reply
whitgallman

There is almost always some gas car parked in the electric car parking spots.

September 17 2012 at 7:23 PM Report abuse rate up rate down Reply
whitgallman

I drive my Electric Focus "OUTOFGAS" to work & back every day. Costs me 1 cent a mile because the company lets me plug in at work. 2 cents a mile otherwise.
Very spunky, great handling car as all the torque is available at the start.
The big thing for me is with gas nearing $4 a gallon and diesel over $4
• my pickup truck costs 25 cents a mile to run,
• my Jeep costs 15 cents a mile,
• my neighbor’s very fuel efficient new Hyundai costs 10 cents a mile but
• my Electric Ford Focus is only 2 cents a mile. ($1.60 to charge the battery for 80 miles) (No, the battery has a 8 year 100,000 mile warranty)
At two cents a mile, going for a ride just for the fun of it is affordable again and there is no air or noise pollution.
I don’t expect there to be many electric cars on the road.
Not many people can afford one right now.
With the relatively low mileage range it can’t be your only car, need something for long trips
Not many people will see the wisdom in limiting the use of crude oil from countries who have as a mission to use every bit of the profit to destroy our democracy, nor from oil from companies who’s profit drive will lead them to start wars in other countries for the purpose of driving up the value of their crude oil reserves.

September 17 2012 at 7:23 PM Report abuse -1 rate up rate down Reply
les69mor2

i worked for gm in the 70s and 80s then laid off,,alway brought gm since then but also hondas for my kids..this year wanted to buy a hybred,,the leaf was shown and too small,the prius was shown and was good,,last went to gm in my area of tn,,no saleman was there as they only had one that could show it,,waited one hour,,someone did unlock the car but no info no help,....went to second dealer two cities over,,guess what the same deal,,saleman was out to lunch at 130 pm and we waited and waited,,i brought the prius..that is what is wrong with the system,,no one cares if it is not a truck or suv,.

September 17 2012 at 3:43 PM Report abuse +1 rate up rate down Reply
bahnstr

When there is no demand then why are the prices so HIGH? If we're using less fuel why is GAS so high? Because Obama and his ilk want it that why. Why buy an electric car? They're dangerous and they're TOO damn expensive to build and not cost effective to operate. Even at $4 a gallon for gas when I can drive a cruz that gets 30 MPG's and costs under $20K to own it's not worth it. $20000 more for a car? That's nuts. drive 15000 miles a year at 30 MPG equals 500 gallons of gas that comes to $2000. It would take 10 years to recoup the cost regardless of all the silly rebates that had been or will be offered.

September 17 2012 at 3:31 PM Report abuse rate up rate down Reply
1 reply to bahnstr's comment
whitgallman

Wait bahnstr, you have forgotten which party the oil men are in. VP Cheney was at Haliburtan. The Bush billionaires are mostly Texas oil men. The purpose of the Bush Billionaires was to start wars to make their oil in the ground worth so much more and they continue to keep oil prices high in hopes of getting the "N" President out of office. Obama threatened to send the SEC after the oil speculators and the price of crude dropped $20 a barrel for a few months.
The cost of the electric car is recooped in 6 years at $2.80 a gallon. (you left out the tax credit and the oil changes)

September 17 2012 at 7:46 PM Report abuse +2 rate up rate down Reply
1 reply to whitgallman's comment
Mark Brooks

you forgot the insurance, my volt is way cheaper to insure than other cars in its price range by at least $500 a year. Location is important, and Prices may vary but in any large city any EV is cheaper to insure than an old teck gas burner...

September 18 2012 at 8:34 AM Report abuse rate up rate down