Electric car market in turmoil

2012-10-05 12:05

Detroit - The fledgling electric car business is in turmoil as predictions about potential sales have proven to be wildly optimistic despite volatile fuel prices and plenty of media hype.

Weak consumer demand is hitting both the big automakers like General Motors and Nissan - which have failed to meet sales targets on the plug-in Volt and all-electric Leaf - and smaller start-up firms trying to carve out a piece of a very small niche.

"Electric vehicles don't make any more sense today than they did in 1912," said Sean McAlinden, an analyst with the Centre for Automotive Research in Ann Arbor, Michigan.

"They take too long to charge, the range is too short and they cost too much."

Electric cars also face stiff competition from hybrids and improved fuel efficiency in conventional vehicles as automakers update their fleet to meet tougher government standards.

Toyota recently announced plans to drastically scale back the release of its all-electric eQ and Honda has limited the release of its Fit EV to 1 100 US customers over the next two years.

Discounted leases

The Chevy Volt - which can switch over to a regular petrol engine once the battery runs out of juice - is by far the most successful electric car in the US.

After a slow start, Volt sales have tripled this year with help of discounted leases and a decision by California to allow them in fast-moving carpool lanes on the state's clogged freeways.

But sales of 16 348 through September are still far short of the 45 000 Volts that the US Department of Energy forecast in a 2011 report that GM could sell per year.

As fuel prices rise, consumers have been far more attracted to Toyota's Prius hybrid, which saw sales double this year to 183 340 vehicles.

Sales of the all-electric Leaf - which has a maximum range of 117km - are down 28% to just 5 212 vehicles in the US this year despite a major marketing push.

Nissan - which is preparing to open a new assembly for electric vehicles in Tennessee - is falling well short of CEO Carlos Ghosn's ambitious goal to double Leaf sales for fiscal 2013.

Only two years ago, the Boston Consulting Group predicted electric vehicle sales could reach 5% or roughly four million to five million vehicles of the industry's total global sales volume by 2020. Now they are saying electric vehicles might represent just 3% of total global sales.


While the big automakers can cushion their massive investments in electric vehicles with sales of conventional cars, the painfully slow growth and the difficulties in adapting electric technology to the tastes of modern motorists have posed huge challenges for start-ups.

Tesla Motors is falling behind in its efforts to produce a sleek new electric vehicle, the electric vehicle start-up company spawned by Silicon Valley billionaire Elon Musk acknowledged in a recent regulatory filing.

That leaves the Palo Alto, California-based company in danger of failing to meet the terms of a $465m Energy Department loan.

Nonetheless, electric vehicles advocates remain upbeat and investors are not shying from the companies.

Tesla was able to raise $128m by selling new shares of common stock and Fisker Automotive also raised $100m in new capital in September despite problems with the launch of its extended range electric vehicle, the Karma.

Tony Posawatz, Fisker's third chief executive officer since February, acknowledged the company made mistakes but dismissed a crushing review by Consumer Reports, which described the Karma's design as flawed.

"Customers do like these cars," said Posawatz, a former GM executive who had been responsible for bringing the Volt to market.

Extended range

Fisker has sold more than 1 000 Karmas, which cost $103 000, since the car went on sale last December.

Posawatz also predicted the technology for electric and extended range electric vehicles will catch on.

"It took 10 years, but the Prius is the best-selling vehicle in California," he said at a recent meeting of the Automotive Press Association in Detroit.

The company is moving ahead with plans to build its next vehicle, a sedan dubbed the Atlantic that will costs roughly half as much as the Karma, and expects to raise another $200m in private equity funding soon.

Meanwhile, Tel Aviv-based Better Place is looking for new direction after replacing founder Shai Agassi with a new chief executive officer.

  • J.Stephen.Whiteley - 2012-10-05 12:51

    As with the victory of the screw propellor steamer over the paddler, the electric car will win.

      nrgx.nrg - 2012-10-05 14:40

      This is where this electric vehicle campaign FAILS. Where does the electricity come from? Coal plants, nuclear plants etc. All of which with the increase in demand will polute the earth even more! How are the batteries made. To make 1 fuel cell, it must (currently) travel the world TWICE before it is fitted into the electric vehicle. That is tons and tons and tons of fuel used to get it to its destination. In summary: Yes it WILL reduce the carbon footprint, however, the production of the slight saving uses SO much energy it is actually worthless at the end of the day. In my view, the electric car will fail, scientific research points more at natural gas as a fuel alternative!

      ernst.j.joubert - 2012-10-05 14:58

      @nrgx.nrg: "This is where this electric vehicle campaign FAILS." Yes, for people that dont want to kick their addiction to oil and remain a slave to BP, Shell, Engen etc for the rest of their lives. "Where does the electricity come from?" You forget that drilling for oil, transporting it it refineries, refining oil, storing oil and transporting it to filling stations cause a substantial amount of pollution. "Charging" an internal combustion car is a very dirty process. And then there is the pollution caused by all the wars that have been fought over it!! Therefore, electric cars are still substantially cleaner than ICE cars and if renewable energy is used; even more so. "How are the batteries made." I guess you dont even know what batteries are used in EV's "In my view, the electric car will fail, scientific research points more at natural gas as a fuel alternative!" What research? Natural gas is a finite resource and oil companies would love to keep you as a slave because you would have to buy it from them. Electricity can be produced from a variety of sources. Individuals can generate their own for that matter.

      nrgx.nrg - 2012-10-05 15:10

      @ernst - yes, i agree the CONCEPT is a great one, as far as sustainability is concerned, Im not so sure. You accuse me of not knowing what batteries are used, well I would not want to bore into submission, perhaps do you OWN research before ATTEMPTING to dismiss an argument with zero rebuttal. Attempt at proving the pro's for the electric vehicle - FAIL!

      ernst.j.joubert - 2012-10-05 15:39

      @nrgx.nrg: With all due respect, if you dont know what batteries are used in EV's, how can you know if they are poisonous or not? "Attempt at proving the pro's for the electric vehicle - FAIL!" Some of the many pros are: 1) There is currently no other zero tailpipe emission technological option that can be quickly introduced into the market to start bringing down emissions considerably. 2) The infrastructure of electricity transmission is already there. No substantial new investments have to be made. 3) Electricity can be produced from a variety of sources. Hence, the price will be more stable than oil. No wars will have to be fought over oil and oil companies will not have the power to dictate to consumers anymore. This will have a positive effect on inflation. 4) Electric cars are fun to drive (full torque at 0 rpm).

  • ernst.j.joubert - 2012-10-05 13:38

    The Nissan leaf has sold almost 40000 units worldwide over the last two years. This is more than the prius sold when it initially got introduced. Today, the prius is one of toyota's best selling models.

  • peter.t.viljoen - 2012-10-05 13:38

    The Leaf's range is 160 KM. Poor reporting again News24...

  • deon.meiring - 2012-10-05 13:49

    The problem is that the Pruis is not that green? I dare any Pruis driver to do a trip with me from JHB to Cape Town and back @120km/h and I will use my 320d auto. I can do 5.6L/100 at that speed. Not sure if the Pruis can do that? I wonder if it will beat an old Getz 1.5 diesel at 120km/h? NOT GREEN AT ALL

      nrgx.nrg - 2012-10-05 14:43

      havent seen a green prius, but i have seen blue ones, and by blue im referring to the faces of the drivers in the prius

      ernst.j.joubert - 2012-10-05 15:03

      "The problem is that the Pruis is not that green? I dare any Pruis driver to do a trip with me from JHB to Cape Town and back @120km/h and I will use my 320d auto.." The manufacturing process of diesel causes more pollution than that of petrol. Diesel engines emit particulates and NOx. There are still alot of improvements that will be made in future generations of the Prius (i.e. plugin technology). Dont buy the diesel BS that audi, BMW and VW stuff down your throat just because they have invested heavily in diesel tech.

      morgaenart.farto - 2012-10-05 17:12

      ernst the idiot strikes again... Here's a poser for you toxic are the industrial processes in the manufacture of the batteries and electrical equipment that goes into a battery-car?

      ernst.j.joubert - 2012-10-05 17:24

      @Morgean FART-o: Do you even know what batteries are used in EV's?

      morgaenart.farto - 2012-10-05 17:44

      @ernst idiot... This is from your typical Pink left-leaning BBC (bet one of your favourite news sources): In case you refuse to read said article, I quote: ...."The production phase of electric vehicles proved substantially more environmentally intensive," the report said, comparing it to how petrol and diesel cars are made. "The global warming potential from electric vehicle production is about twice that of conventional vehicles." In addition, producing batteries and electric motors requires a lot of toxic minerals such as nickel, copper and aluminium." QED, Idiot

      ernst.j.joubert - 2012-10-05 20:39

      @Morgean.FART: You seem to thrive on misinformation and worse yet, you perpetuate this nonsense. Here are some facts: 1) Electric cars have far fewer components than internal combustion cars. Electric motors last substantially longer than normal ICE's and EV's require far less maintenance. Therefore, fewer resources are used and so hence, less pollution. 2) EV's use lithium ion batteries. These batteries are much less toxic than the lead acid battery that you currently have in your car (Lithium is used to treat bipolar disorder in humans). 3) If the entire lifecycle of an EV is compared to the entire life cycle of an ICE, then the EV pollutes substantially less than an ICE (If all factors are taken into account like feul production etc.). Perhaps you should visit the following site, you might learn something:

  • Robert - 2012-10-05 15:53

    if the same amount R&D went into electric car batteries and charging them as opposed to petrol and diesel engines and tech then i'm sure sales will improved drastically. So i guess we'll be the oil companies slaves until then..

  • morgaenart.farto - 2012-10-05 17:13

    The electric car will go the way of Obama...onto the (s)crapheap of History...

      ernst.j.joubert - 2012-10-05 17:26

      @Morgean FART-o: We will see about that. If you want to continue being a prostitute of Big Oil, be my guest.

      morgaenart.farto - 2012-10-05 17:40

      Yes we WILL see about that. I admit the electric car will outlast Obummer by a few years, but mr Empty Chair will be voted out with his Green/Pink policies in a few weeks time.

      ernst.j.joubert - 2012-10-05 20:41

      @Morgean.FART: Supporting a redneck moron (sorry, mormon) like Zitt Romney surely shows just how enlightened you are......

  • rosiegracebrooks - 2012-10-05 17:25

    The oil magnates rule the world. If cars didn't run on petrol, economies and personal fortunes would collapse. Electric cars are without a doubt the way of the future but as usual, money and fortune of the already wealthy is more important than saving the environment and helping normal people save money.

  • craig.king.7505 - 2012-10-05 17:43

    Transferring the burn from the car to a power plant doesn't change much. Batteries are crap now and without a revolutionary discovery the minor incremental improvements are not enough to make this a viable means of transport. The electric car is a political object. Getting the internal combustion engine more efficient is what is actually going on.

      ernst.j.joubert - 2012-10-05 20:47

      @Craig: Perhaps you should visit the following site and see what can be achieved by people that innovate.

      ernst.j.joubert - 2012-10-05 21:14

      @Craig (continued):

  • RiD123 - 2012-10-05 19:03

    ESKOM ALERT!!!! Please unplug all unnecessary equipment like radios, heaters , cars and switch unneeded lights off.. We thank you.

      steynberg.myburg - 2012-10-06 11:50

      From oil company slaves to Eksdom slaves...sorry Eskom slaves...Eish.

      ernst.j.joubert - 2012-10-06 13:20

      You can generate your own electricity. Electricity prices more stable than oil.

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