Who Wants to Buy an Electric Car?
Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager
Apparently, not very many people are interested and manufacturers are getting the message. The high profile troubles of Tesla Motors and most recently, Toyota, are proof that the electric car is far from ready for prime time. Tesla, a US company known for marketing its electric cars markets well- heeled customers but are also notorious for its fire prone batteries.
This week, Toyota announced a priced reduction of its Prius Plug-in for the 2014 model year. Without altering the vehicle specs, the MSRP for 2014 Prius Plug-in Hybrid will be $29,900 after the $2,000 reduction. Press accounts quote unnamed Toyota officials as admitting that “price repositioning” is the only way that Toyota can hope to sell the Prius Plug-in.
What are the problems with electric cars?
The 2013 Toyota Prius plug-in hybrid gets a combined 95 miles per gallon gasoline equivalent(mpge), or 50 mpg in gas hybrid mode. In electric only mode, however, it has a mere 11-mile range. That is a severe disadvantage. Despite the hype surrounding Tesla, with a near decade long history, sells only a few thousand vehicles per quarter. A fully loaded Tesla S carries an MRSP of about $90,000 and the Tesla Roadster sports an MSRP of $109,000. Because of low production capacity, customers must to wait months to get one of these toys for the wealthy.
Further, the reputation for the dangers associated with electric cars is exceeded only by their deserved reputation for impracticality. A fully charged battery cannot take the car only a tiny fraction of the distance as can a hybrid or gas engine. Location of charging stations is a significant worry. Service technicians who can fix these electric cars are extremely scarce.
Most of all, the inane concept of charging an electric car with fuel produced by fossil fuels is the height of foolishness and an insult to any serious student of sustainability.
The price reduction conundrum
With the popularity and market share of the Prius line, which arguable has made the hybrid car a mainstream product, it would seem that the brand association, at the very least, would fuel success for the Prius Plug-in. Neither has its 95 mpg mileage.
Toyota’s price reduction aligns with price drops across the board for plug-in vehicles, whether sold or leased. The Nissan Leaf, Fiat 500e and the Chevy Spark can be leased for $199 a month. In June, Honda dropped the Fit EV from $389 to $259 a month. In July, Ford slashed the Focus EV by $4,000. In August, GM cut $5,000 off the sticker price of the Chevy Volt.
The manufacturers claim that the price reductions in the Volt and Leaf have arisen from the economies of scale of increased production and lithium-ion batteries.
What is driving the price reduction?
The main motivation for the electric vehicle price wars, however, is to move units at a discount and reevaluate the strategy given the Zero Emission Vehicle (ZEV) Effect. which claims that the only reason Tesla finally turned a quarterly profit was its sale of carbon tax credits, hardly a sustainable phenomenon in both senses of the word. The ZEV mandate in California aims to achieve a 15 percent level of emission free vehicles by 2025.
Would you buy an electric car?
I certainly would not and for the impartibility, safety, and cost problems cited above. Most of all, this whole electric concept is a slap in the face to the environment.