Electric Carmegeddon?

By Bill Moore

Posted: 19 Jul 2011

Let me see if I have this right. GM starting selling the Chevy Volt in late December and Nissan began deliveries of the the LEAF about the same time. Both are electric-drive cars.

In that time, GM has delivered something like 2400+ vehicles and Nissan around 3600 or so, give or take. In GM's case that's more EVs in six months than all the EV1s they delivered over the course of about four years back in the late 90s.

Yet, if you follow the logic of a few pundits out there on the 'Net, we might as well write off electric cars as a flawed federal policy forced on GM by the Obama Administration. Twenty-four hundred Volt deliveries are a disaster of Edsel-like proportions we are supposed to believe. I should point out that GM made the decision to build the Volt during the previous Administration, but I digress.

Do the sales of a few thousand Volts and LEAFs over the last six months really herald the demise of the electric car, as some are now suggesting?

Let's examine that question, shall we, starting with reminding ourselves that GM shut down the plant in Detroit where the Volt is built in June to retrofit it, only resuming production this month. Nissan, for its part, heroically recovered from the worst earthquake in recent memory, a devastating tsunami, a nuclear power plant disaster, sporadic power outages, and a severely disrupted parts supply chain. And since some of the parts for the Volt also come from Japan, they too had to be impacted to some degree, though GM hasn't confirmed that one way or the other.

Sure, it's easy to look at the large number of non-electric cars that came off assembly lines during the same period and draw the conclusion that people just don't want to buy EVs, but if they're not available, how can they? I can walk into the Chevy dealer down the street from me and buy a Cruze, a Malibu, an Impala, an Equinox from stock. I can't buy a Volt. They just aren't available in my market. In fact, they aren't available in most U.S. markets, not yet. The same applies to the LEAF. It's only available in a handful of markets and based on pre-orders in hand, they're sold out for at least the next twelve months or more.

And this is called failure?

Both companies deliberately planned limited production schedules for the first year and conservative volumes thereafter in part because they too aren't certain how the market will respond, and also because the number of parts suppliers are limited. And we haven't even addressed the issue of dealer and technician training, not to mention spare parts inventories.

Put yourself in the shoes of the GM engineer whose job is to source the parts for the Volt and the supplier asks you how many units General Motors wants and how long the production run is expected to last? What you would have told the supplier back in 2008 or '09? 10,000? 100,000? 1 Million? This is a brand new product built in anticipation of gasoline becoming dear in the latter years of the current decade for a host of reasons. For once, GM management is trying to anticipate the market instead of following it. The same goes for Nissan and all the other carmakers developing EVs in the belief that it is the only viable alternative to meeting tougher emissions and efficiency standards being enacted around the world, as well as creating products free from the shackles of dependence on a single energy source: oil.

The general public may not yet appreciate that eventuality, but if you're a company whose future depends on being ahead of this particular curve, you'd better be taking steps to ensure you have products ready for the post peak oil world.

As to the question, Has the market disappointed?

Frankly, it's just a bit premature to make that call, don't you think? Look, EVs are largely a mystery to most people who haven't had the chance to sit in one, much less drive it for any appreciable length of time. I am still banking on the "viral" sales effect when neighbors and colleagues and relatives take friends and family members for rides in their new EVs. I am convinced that we'll see the "hockey stick" of exponential growth over the next decade: two becomes four, four becomes sixteen, sixteen becomes… well, you get the idea. All hockey stick growth patterns build gradually, slowly over time and then reach a critical 'tipping point' where growth explodes rapidly upward. That's the way EVs sales will happen, in my view. It is inevitable. Sure, engineers will continue to tweak the IC engine, wringing more performance and better efficiency from it, but in the end, that too will reach a point of diminishing returns. Eventually, it will find itself taking an increasingly subservient role has hybridization gradually shifts more of the propulsion role to the electric drive as in the various extended range (EREV) architectures with which GM, Volvo Cars (image above) and others are experimenting. Then at some point in the not all that distance future something better -- the fuel cell or maybe the Rotary Van engine -- will replace it.

You've heard my take on the question of early EV sales, now what's you're view?

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