What Will it Take to Get Americans Buying Electric Cars?
Americans have shown willingness to support hybrid vehicles, but consumers have been slow to embrace fully electric cars.
According to the Electric Drive Transportation Association, 495,530 hybrid vehicles were sold in 2013. That's only a fraction of the total U.S. auto sales of 15.6 million for 2013, but it's a number that shows improving traction for the sector, which sold 434,645 in 2012 and only 266,329 in 2011. Overall, EDTA reports that electric drive vehicles (which include hybrids, plug-in hybrids, and full-electric vehicles) have climbed to 3.8% U.S. market share -- up from 2.4% in 2010.
Those numbers, however, are a little misleading. Although hybrids like the Toyota Prius, Honda Accord Hybrid, and the Ford Fusion Hybrid have become strong sellers, no fully electric car has gained any considerable market share. In fact, of the 592,192 electric drive vehicles sold in 2013, only 47,654 were fully electric. That's a tiny percentage of overall auto sales and not a major percentage of overall electric or partially electric vehicles. But it is a number that climbed from 14,251 in 2012 and 10,064 in 2011.
And despite the slow sales, there are some signs that manufacturers remain committed to bringing electric cars to the masses (or at least the mainstream). At the 2014 Detroit Auto Show, Tesla answered questions about its Model E, which is slated for release in 2017. The new car, also referred to as the Gen 3, addresses two of the major complaints consumers have had -- price and range. The company, in a question and answer session at the show, referred to a $40,000 price tag, which, while not cheap is dramatically lower than the $63,570 a base model Model S costs now. The company also told IBTimes, in an informal discussion, that "It's hard to imagine that the Gen 3 wouldn't get 200 miles in range."
Is it enough?
A 200-mile range at a $40,000 price tag might be enough to win over consumers who want an electric vehicle, can afford a high-end car, but won't spend that much money for limited range. According to the same article, the Nissan Leaf, which has sold more cars than any other fully electric vehicle, has a range of about 75 miles with a base unit cost of $28,800.
The BMW (NasdaqOTH: BAMXF) i3, which goes on sale in the U.S. later this year at a base price of $41,00, only has a range of about 80 miles. Even the Fiat 500E, a fully electric car that the company offers to select customers in select markets at a $199 per month lease (or under $20,000 with government tax credits for purchase) may hit on the price side, but it fails to deliver on mileage, only offering an estimated range of 87 miles per charge.
That leaves Tesla at a decent price point (or at least one not inconceivable to luxury car buyers) with the best available range.
Where can I charge up?
The other remaining challenge, however, is the lack of charging stations across the country. Tesla and others have been taking steps to address that. Starting in July 2013, Tesla began building charging stations in the United States. And though the company, as of the end of 2013, had only built 54 stations, it did concentrate them in the areas where its cars are being sold. According to an article on WallSreetSectorSelector.com, "most of them [are] being strategically positioned on locations along the highway corridors connecting Los Angeles to San Francisco, and Boston to Washington."
At these charging stations -- though times vary between stations and vehicles -- it takes around 20 to 25 minutes to recharge a car. That's longer than pumping a tank of gas, but not so outrageously long that a customer would not buy an electric car for that reason -- especially if longer trips were the exception rather than the norm for the vehicle owner.
And the growth in charging stations is not limited to Tesla. Gizmodo reported that as of January 2011 there were 1,972 electric vehicle charging stations in the United States.That number climbed to 6,310 in January 2012 and exploded to 20,138 in May 2013. That's not as many as the estimated 121,000 gas stations across the country, but it's huge growth. And with the stations concentrated on highly traveled routes and clustered in places with the highest electric car sales, the number seems high enough that in many places, difficulty finding a charging station may not be a reason to avoid buying an electric vehicle.
Will it work
If the electric car markers remove price, basic range, and difficulty in finding a charging station on a long trip as factors, the question remains, will customers flock to electric cars? The numbers, so far, suggest that they might -- and they have been as prices have fallen, ranges have grown, and charging stations have increased. But whether those trends track out to even the numbers that have embraced hybrid vehicles is very much in question.
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The article What Will it Take to Get Americans Buying Electric Cars? originally appeared on Fool.com.Fool contributor Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Ford and Tesla Motors. The Motley Fool 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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