Published on October 28th, 2013 | by Zachary Shahan0
Electric Cars & Plug-in Hybrids Seeing Strong Sales Growth & Investment… Much More To Come
The Union of Concerned Scientists’ Clean Vehicles program recently released an updated version of its rather comprehensive “backgrounder” on electric vehicles — “how much the technology is growing in the country, the opportunities it presents for consumers and automakers, and the challenges facing its adoption,” to be specific. Also included in the updated backgrounder is which automakers are now investing in EV technology.
Here are some of the key, overall findings:
- Sales of plug-in electric vehicles (EVs), including both plug-in hybrids and battery electrics, are up significantly over last year. More than 59,000 EVs were sold in the United States by the end of August — already surpassing EV sales for all of 2012.
- In California, sales are more than double the rate of last year, representing 29 percent of U.S. plug-in vehicles sales.
- Americans have purchased almost 140,000 plug-in vehicles in the last 3 years, resulting in the country using about 40 million less gallons of gasoline per year.
And here’s even more on a few key topics — major drivers of sales, opportunities, and challenges (all via UCS):
Major drivers of sales
- More choices from more manufacturers at a range of prices mean higher sales.
- Sales of the Nissan Leaf and Chevrolet Volt hit an all-time high in August since their introduction in 2010.
- Consumers can now get plug-in vehicles in familiar models, but which use less gasoline than even a traditional hybrid. Toyota, Ford, and Honda are producing plug-in versions of popular cars, such as the Toyota Prius, Ford Fusion, and Honda Accord. The plug-in Prius has been particularly successful, with more than 20,000 sold in less than two years.
- New plug-in cars at lower price points are allowing affordable, gasoline and oil change-free driving. For example, the Chevy Spark EV and Nissan LEAF are currently available with $199-per-month leases.
- Tesla is producing a high-end EV with excellent reviews and safety ratings, and has sold more than 10,000 cars this year. In California, Tesla is outselling brands like Volvo, Buick, and Porsche so far in 2013 (California Auto Outlook/ Polk).
- BMW will soon release its i3, which is the first electric car built from the ground up from one of the traditional up-market manufacturers.
- Overall, consumers are seeing many more electric options in dealers’ showrooms and the trend looks to continue with options from Volkswagen and Cadillac arriving soon.
- Compelling incentives: Incentives are also driving plug-in vehicle purchases. Four of the top five cities (San Francisco, Los Angeles, Seattle, New York City, and Atlanta) for plug-in vehicles are in states (California, Washington, Georgia) with financial incentives. Four of the top five cities are also in regions that allow HOV/carpool lane access to solo plug-in vehicle drivers. California is the leader in plug-in sales and the state provides both HOV access and up to $2,500 in purchase rebates.
- Early adopter areas leading the charge: Early adopter regions are leading the way, especially in California. Buyers in the San Francisco Bay Area at the leading edge, with plug-in cars accounting for 5 percent of new cars (excluding trucks) sold in the Bay Area in the first half of 2013 (California Auto Outlook, CVRP data). Overall, it’s becoming increasingly common to see plug-in vehicles in major metro areas, and the visibility of these cars and word-of-mouth is likely reinforcing sales growth.
- More charging options: Workplace charging offers the best opportunity to recharge EVs outside of the home because commuters park their vehicles for eight or more hours, usually in the same parking lot. Charging vehicles for long periods of time means that businesses can invest in lower-voltage outlets instead of more expensive high- power recharging stations. Installing workplace chargers provides a substantial benefit to employees and helps reduce barriers to EV ownership. In areas where carpool lanes are open to plug-ins, workplace charging also can lead to higher productivity since workers will spend less time commuting.
- Car sharing and rentals: Renting a car increases the chance that a driver will later buy that model. (IHS/Polk study) Encouraging rental and car-sharing companies to add more plug-ins to their fleets will help build public awareness and acceptance of EVs while putting more low-emission vehicles on the road.
- Different roles for battery-only vehicles and plug-in hybrids: Battery-only EVs offer the greatest fuel cost savings and can be a good fit for many consumers, particularly commuters with predictable driving patterns or those in households with more than one car — which is more than half of U.S. households. Most offer 70+ miles on a full charge, far more than the average daily driving distance for many Americans. Alternatively, plug-in hybrids are a better lifestyle option for drivers who travel farther or live in single-vehicle households. Both types of EVs enable Americans to reduce oil consumption and climate-changing emissions, and save money on gasoline.
While sales and model choices are increasing, reports based on false and misleading assumptions have questioned the benefits of plug-in vehicles and the viability of programs that support them.
- Misinformation and misleading studies: Electric vehicles produce lower emissions than the average gasoline vehicle everywhere in the United States and are cleaner than all gasoline cars in much of the country (UCS State of Charge). Including the emissions from vehicle production lowers, but does not negate, the environmental benefits of EVs. However, some recent media reports have questioned the environmental benefits of EVs. Most stem from an article in IEEE Spectrum.The IEEE article has been widely criticized for taking statistics out of context, using unsupported conclusions, and for making unfounded accusations of bias towards academics and other researchers. Its broad and overly negative conclusions about EVs are not supported by current data or analysis. Even with the pessimistic assumptions about vehicle manufacturing emissions, two-thirds of drivers live in states where a plug-in vehicle is the lowest emission vehicle. In addition, electricity is getting cleaner in many areas so emissions from plug-in vehicles will only drop in coming years.
- Sustainable funding needed for state incentives: Plug-in EVs are still in the early stages of deployment, and will take time to become a large share of the new vehicle market. State and federal incentives have played an important role accelerating the sales of plug-in vehicles and will continue to be important as the market matures.In California, new car owners have oversubscribed to the state’s rebate program, suggesting the need for structured incentive programs. Because of the success of the program, rebate applications have created demand that is mismatched with the pace of incoming funds. Currently, a patchwork of temporary funding sources has been used to keep the program operating. The recently enacted Senate Bill 359 will keep the popular purchase incentives available through next summer, but a long-term plan that matches demand to resources will still need to be developed to avoid disruptions in the program.
The overall conclusion from UCS:
“Plug-in vehicles are on the right track with sales figures showing steadily growing consumer acceptance, as would be expected from a developing market. Game-changing automotive technologies often take many years to become a significant part of the new-vehicle market. For example, the Toyota Prius recently claimed the spot of best-selling car in California after 12 years on the market. Plug-ins face higher hurdles than hybrids did a decade ago, so a steady increase in sales and number of models should be seen as a positive sign that plug-ins are poised to be a significant segment in the U.S. auto fleet.”
Indeed, as I wrote in my last monthly update of electric car and hybrid sales in the US, 2013 100% electric car sales through September are up 447.95% over last year (33,617 vs 6,135 cars sold), while overall plug-in car sales are up 35.86% (32,718 vs 24,082 cars sold).