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.
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.
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.