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 (NYSE: TM  ) Prius, Honda (NYSE: HMC  ) Accord Hybrid, and the Ford (NYSE: F  ) 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 (NASDAQ: TSLA  ) 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  (NASDAQOTH: NSANY  ) 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 (NASDAQOTH: FIATY  ) 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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  • Report this Comment On January 24, 2014, at 11:58 AM, Lusongshu wrote:

    The trouble with electric cars is that they can be OK second cars but almost never your primary car. 75% of the trips I make could be made with an electric vehcile. What about the other 25%? I am not going to the lumberyard with a little electric car. I am not going on even a weekend day trip with it never mind a vacation trip.

    I could buy an electric as a second car. Unfortunately the added registration, excise tax, and insurance exceed any savings in fuel costs. The solution is to create a new class of vehicles similar to the idea of ultralight aircraft. Let me own and operate a local transporation powered vehicle without a license, registration, special insurance, and without having to lug around highway safety equiment.

  • Report this Comment On January 24, 2014, at 12:09 PM, mortnogas wrote:

    75% vs 25% Like the majority of people that have bought electric cars it sounds like your ice would be your second car. 80% of American families own two or more cars.

  • Report this Comment On January 24, 2014, at 12:28 PM, wadestewart wrote:

    The electric car will succeed in the end. However, we need to understand where limitations are most likely.

    Battery power will require an order of magnitude change in capacity for this to work. Period. This may happen soon, but I'm not betting on it.

    Electric vehicles powered by natural gas fuel cells are more likely. Natural gas infrastructure is already being built. Natural gas fuel cells are already being used (on a larger scale) by Bloom Energy and others. This will put the electric vehicle in the 300-400 mile range.

  • Report this Comment On January 24, 2014, at 1:17 PM, timwinter wrote:

    My only hesitation other than the cost of these vehicles is my ability to charge them. So many of us live in condos or apartments that don't have a typical garage like a house does. Until builders/landlords add electrical outlets that somehow connected to each unit's electric meter, I don't see how us non-house living people could ever consider buying one. They need incentives so some sort of tax credit would be nice.

    In respects to charging stations, If they don't already, I think Tesla should go the way of gas stations and offer franchises for charging stations. Imagine how much additional revenue a station owner could make when you have people captive for 20-30 min. Restaurants and convenient stores would do very well. If I owned one, I'd offer free suites overlooking the charging station for people to keep an eye on their vehicle, to relax, connect to free WIFI or watch TV while sitting in a cozy little room with heat/AC. I'd make money off the "mini bar" vending machines. It would only require one employee to be on the clock.

    In all reality though, we need charging stations that offer gasoline, electricity and natural gas all under one roof.

    Make it happen Tesla!

  • Report this Comment On January 24, 2014, at 2:31 PM, jeffhre wrote:

    ". But whether those trends track out to even the numbers that have embraced hybrid vehicles is very much in question"

    Update - EV's are tracking much higher for the same period after initial introduction as non-plug-in-hybrids, no that full year 2013 numbers have been tallied.

  • Report this Comment On January 24, 2014, at 2:32 PM, TXObjectivist75 wrote:

    The physics of an electric car will never change, and never be better than an ICE, hybrid, or fuel cell. 1,000 lb battery vs ~200lb max for a full tank of gas. 800lb less mass to carry around (and a gas tank gets lighter as the fuel is burned). I can fill up a tank of gas in less than 5 min and get twice or more the range. My steel gas tank will last decades longer than a battery pack and still be functional. The physics didn't work 120 years ago in the dawn of the motor vehicle era, and won't 100 years from now.

  • Report this Comment On January 24, 2014, at 2:42 PM, jeffhre wrote:

    "I could buy an electric as a second car. Unfortunately the added registration, excise tax, and insurance exceed any savings in fuel costs"

    Yes an ultralight aircraft would eliminate all traffic worries. And no, there are no additional excise taxes or added insurance costs. And if only $100 added registration costs in only two states (to help make up for paying zero gas taxes) is a deal breaker, you would be much better off looking at used cars.

    For comparison, I was able to get a $7500 credit on taxes owed and a state rebate of $1500 for my Volt, and I am paying $75 a month for my electricity bill instead of the $50 a month I was paying before. For vacations and long trips: I do pay for gas as these occur. I am generally paying zero for gas where I was paying about $120 a month for a smaller car before.

  • Report this Comment On January 24, 2014, at 3:03 PM, jeffhre wrote:

    "The physics of an electric car will never change, and never be better than an ICE, hybrid, or fuel cell. 1,000 lb battery vs ~200lb max for a full tank of gas. 800lb less mass to carry around (and a gas tank gets lighter as the fuel is burned)."

    Physics questions those are fun. How much energy is in a Tesla battery pack? How much is in a gallon of gas*?

    100 years ago the conversation was ended by the rapid improvements in IC engines. And the nail in the coffin for EV's was somewhat ironically, the invention of the electric starter, first used by Cadillac.

    Gas is an energy dense liquid fuel. It has served transport needs well, but it will never get any more dense. Batteries on the other hand have improved by an average of 8% for the past 20 years. That is why we are having this conversation. Batteries continue to improve by at least 8% a year and are droppin in price evn faster.

    If electric motors need a flow of electrons to function, it is easy to concieve of a group of electrons bunched much more tightly together than gasoline molecules. Until the theoretical limits of Li Ion and some promising directions in battery research reach their theoretical limits though, that is just creative imagination.

    *about 33.7 kWh and a Tesla battery pack holds less than the energy of 3 gallons of gas 85 kWh. How can it travel over 350 miles? Gas engine 22% efficient, Tesla electric motor 94% efficient. Your steel gas tank with no moving parts will indeed last a long time. However, an electric motor with one moving part, supported by bearings and connected to a reduction gear, will last far, far longer than your gas engine and transmission.

  • Report this Comment On January 24, 2014, at 3:31 PM, rh33 wrote:

    I don't think it makes much difference whether people buy electric cars or not. Why would anybody care? Electricity comes mostly from burning fossil fuels; gasoline is made by refining a fossil fuel, and some of the fossil fuel is burned in refining. And while the use of the electricity in producing the motive power in the automobile is very efficient, the generation of the electricity in the power plant is not, nor is the delivery of the electricity to the point of use. A more enlightened effort would be in making the whole transportation system more economical.

  • Report this Comment On January 24, 2014, at 5:16 PM, JackDoge wrote:

    rh33 wrote:

    " And while the use of the electricity in producing the motive power in the automobile is very efficient, the generation of the electricity in the power plant is not, nor is the delivery of the electricity to the point of use. A more enlightened effort would be in making the whole transportation system more economical."

    1.)Fossil based Power plants will always be more efficient at producing/converting power than ICE. It's at least 2 fold more efficient.

    2.) The delivery of electricity through lines is more efficient than semi-trucks using ICE, hauling fuel tanks to gas stations that provide fuel to ICE vehicles.

    3.) Look at your map and see how much electricity from a power plant is generated by hydro. More will convert and switch to in the future.

    Electric cars are far from perfect. Batteries will improve, especially if there is a race of competition to make it better. Electric vehicles is not the end all be all solution of the future, but when it comes to being "green", maintenance, * instant torque fun* and efficiency, the electric motor wins hands down.

  • Report this Comment On January 24, 2014, at 7:36 PM, nonqual wrote:

    If/when BEVs provide comparable value and convenience to other modes of propulsion, they will be widely adopted. Former DOE Secretary Chu opined in Brazil in 2011 that battery technology would have to improve by 3 to 5 orders of magnitude for BEVs to be competitive.

    Rather than subsidizing the 1%ers' toyz and politically correct cronies, US shoould be funding basic research in alternate energy forms.

  • Report this Comment On January 25, 2014, at 9:39 PM, BloviationNation wrote:

    The lure of a device that converts its energy source to torque with better than 90% efficiency will keep automotive engineers searching for ways to make the device practical. Modern three phase inductively coupled AC Electric motors achieve this conversion efficiency and do so rather cheaply. Most people fail to understand that the problem with an electric car is not the engine, but rather its fuel tank (the battery). Electric motors can be made enormously powerful for their small size. An example would be the Tesla Model S which uses a single small electric motor that's about 16 inches long by 10 inches in diameter yet makes nearly 450 ft lbs of torque at over 400 HP. People also make the mistake of thinking that Lithium batteries are the only viable energy storage technique available. This is only true for the moment. Lithium is a temporary solution and will likely be superseded by other "energy storage" technologies within 10-15 years. Already under development are technologies that will double Tesla's present 250 mile range. And if an efficient and cheap way to isolate/extract hydrogen is ever found look for fuel cells to replace most other batteries chemistries as the energy storage option of choice for electric cars.

  • Report this Comment On January 25, 2014, at 10:54 PM, jeffhre wrote:

    "I don't think it makes much difference whether people buy electric cars or not. Why would anybody care?"

    There are a number of opinions here that experess why some people are interested. As a fossil fuel, clearly natural gas is much cleaner, with far fewer health, environmental and habitat effects than gasoline. Natural gas burned in a large thermal plant, produces energy far more efficiently than millions of small mobile power plants. And as BloviationNation wrote, delivering gas by diesel trucks and pumping it electrically into customer tanks, cannot compete with power lines for delivering motive power efficiently. Huge differences right now.

    In California, over 33% of EV drivers use solar panels to power their cars. This points towards a possible future of remarkably clean power for propulsion, as solar power continues to rapidly drop in price. Natural gas, nuclear, wind, hydro, solar and geothermal generated electricity accounts for 62% of US electricity genaration. And that total is getting larger year by year.

    Electric motors effectively use these advantages, in addition to operating with conversion efficiencies above 90%. And natural gas does not need to be refined, which saves billions of kWh of energy over gasoline. Gasoline engines beginning with these disadvantages, only convert the enegy in gasoline at a rate of 22% efficiency.

  • Report this Comment On January 26, 2014, at 11:12 AM, Capt601 wrote:

    It will take manufacturers other than tesla ,or Nissan with the leaf, to make a true EV. Not a hybrid called an EV like the volt.

    The bystanders with their EV phobia will still always be complaining on the sideline. I need ,ore range, I can't use it for all of my driving? Really? Why can't you? Do you drive 2000 miles a day? Tesla is buildings a supercharger network. 99% of EV charging is done at home, because people don't drive more than 265 mile a a day.

    And your gas car catches on fire 3 x per hour, 24 hours a day. How safe is that? A tesla,2 times after running over an object that an ice car dropped. And overall a tesla significantly safer.

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