When Will Americans Buy Electric Cars?
May 31st 2013 8:00PM
Updated May 31st 2013 10:00PM
There's no doubt that Tesla Motors (NASDAQ: TSLA) has found the formula for electric-car success. Tesla's Model S has won almost every award worth winning - and found plenty of happy customers, too.
The Model S, like Tesla's first car, the Roadster, proved that battery-electric vehicles could be gorgeous and fun to drive, while being just as functional in the real world as regular gas-powered cars. But the Model S is far from the only electric car on the U.S. market right now. And most of the others are finding sales to be much harder to come by.
Tesla's Model S sedan. Photo credit: Tesla Motors.
Cutting electric-car prices to try to spark sales
The latest evidence that non-Tesla EVs are proving a hard sell came from Honda , which said on Thursday that it would slash the cost of a lease on the electric version of its popular Fit subcompact.
As mass-market electrics go, the Fit EV is a decent one. Its EPA-rated range is 82 miles, ahead of the Nissan Leaf's 75-mile rating. It's said to be pretty fun to drive, in a Honda sort of way, and comes fairly well-equipped.
You'd think the fact that it's a Honda would help sales. After all, the brand is quite popular in the coastal U.S., where green cars seem to do best. But through April, Honda had sold just 68 Fit EVs so far this year.
That doesn't compare too well with the 636 Focus Electric EVs sold by Ford over that time span, much less the 5,476 Leafs sold by Nissan over the same period (and the likely 6,000-plus sold by Tesla).
But Honda is really following the direction of the market here. Both Ford and Nissan cut the prices of their slow-selling EVs earlier this year. And General Motors , which is entering the EV market with its little Chevy Spark EV shortly, has matched Nissan's inexpensive lease terms.
Still a tough sell here in America
It's not hard to see why battery-electric cars have been a hard sell in the U.S. Batteries are still heavy, bulky, and expensive, and that means that even small electric cars are heavy, cramped, and relatively expensive - and don't have anything like the range of their gas-powered equivalents. And places to recharge are still few and far between.
Tesla's Model S is the exception to most of those drawbacks, of course. But the Model S was designed from the start around a big battery pack that would give well more than 200 miles of range -- and designed as a luxury car, so that its price would be competitive with gas-powered rivals.
Tesla CEO Elon Musk has promised a "mass market" Tesla within a few years, but it sounds like his idea of "mass market" is more like a BMW 3-Series in terms of size and price than it is like a Focus or a Fit.
Meanwhile, the mass-market automakers are trying to get traction with simpler offerings aimed at green-minded commuters. (Or at least to placate regulators in states like California, which requires automakers to offer a zero-emissions vehicle.) So far, though, that market traction hasn't been happening -- except for the Leaf, which is selling in numbers close to Tesla's.
Do we still think that battery-electric cars are the future?
Just a few years ago, many observers expected battery-electric cars to have strong sales by now. But those sales haven't materialized, in part because consumers have adjusted to higher gas prices and in part because a lot of those observers anticipated breakthroughs in battery technology that haven't happened -- yet.
So do battery-electric cars have a future here? Tesla seems to have found a solid niche market for the moment, but whether it will be able to ultimately achieve the 500,000 yearly sales volumes it hopes for remains to be seen. And the Leaf has a following, albeit a small one by Nissan's usual standards.
But outside of areas like Silicon Valley and MetroWest Boston, where green-minded gadget geeks tend to congregate, battery-electric cars haven't made much of an impression on American car buyers. And I don't think that's likely to change unless the technology makes a big leap forward.
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The article When Will Americans Buy Electric Cars? originally appeared on Fool.com.Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends BMW and General Motors. It recommends and owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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