Economics not ?range anxiety' deterring potential buyers of electric and rechargeable hybrid cars
July 23, 2012 6:04 PM
Last month we reported?that, even with government subsidies on offer to purchasers of qualifying electric vehicles, that the economics of buying an electric versus a conventional fuel vehicle is far from clear for consumers.
An International Transport Forum policy Brief for June 2012 entitled ?Electric Cars: Ready for prime time?? reported that electric cars cost ?4k to ?5k more to their owners than an equivalent fossil fuel car over the vehicle?s lifetime, but, with electric cars much cheaper to run per mile, overall price differentials depends on travel distances over the lifetime of the vehicle.
The greater an electric car travels, the more attractively it compares to a similar fossil-fuelled model. Yet most electric cars are constrained by their travel range.
Consumers will also have varying attitudes towards such differed savings.
A report in this weekend?s Financial Times, as well as by JD Power/LMC Automotive, suggests the timing of the introduction first crop of electric and rechargeable hybrid cars has been unfortunate, adversely affected by current lowering oil prices and a depressed economy.
The FT article 'Electric cars struggle to build momentum' (registration required) found that manufacturers, including Audi, are scaling back plans for launch of electric vehicles due to poor market reaction to early movers such as Nissan, with its Leaf, and GM?s Chevrolet Volt. ??
Considerations such as charging infrastructure and ?range anxiety? were thought likely to be foremost for potential buyers but, according to the FT, ?carmakers say that most people buying or testing early electric cars have coped well with the need to plug in, as long as they could recharge at home or work. Instead, say industry analysts, consumers are rejecting plug-in cars because they find them too expensive for what they offer - even after subsidies like the ?5,000 grant available in the UK, or the $7,500 offered in the US.?
The FT report that ?In Britain, only about 800 consumers registered vehicles eligible for the plug-in car grant in the first half of this year.?
Quoting Lacey Plache, chief economist with Edmunds.com, the US car-buying website, ?The cost of a plug-in car is so much greater than a conventional car of the same size that people aren?t going to make up the cost differential during the period when they own the car ? and that?s even with government subsidies?.
The JD Power/LMC Auto report 'US Monthly Retail Sales ? June 2012' includes analysis of sales figures for electric vehicles in the US. According to John Humphrey, senior vice president of global automotive operations at JD Powerand Associates,??Gas prices in the United States have fallen steadily since April, which has changed demand for hybrid and electric vehicles. As gas prices increased from $3.33 per gallon in November 2011 to $3.84 per gallon in April 2012, the combined share of retail sales of hybrid and electric vehicle sales increased from 1.7% to 4.6% during the same period. However, as gas prices have dropped since April, so has the market share for hybrid and electric vehicles, which has been trending downward during the past two months and is now at 3.4%."
?The hybrid and electric vehicle market closely follows gas prices, which demonstrates that while there is consumer interest in hybrid and electric vehicles, demand is heavily influenced by the economic environment, rather than pure interest in the technology,? said John Humphrey. ?Until we see alternative powertrain growth without rising gas prices, we won?t see the market share growth that many automakers are hoping for.?
The JD Power/LMC Automotive report also predicts that hybrid and electric vehicle sales in the US will account for 3.2% of total light-vehicle in 2012.
Source: https://connect.innovateuk.org/c/blogs/find_entry?entryId=8872656
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