Electric Vehicle Economics Don't Pencil Out

NCPA November 12, 2012

Electric vehicles are doing poorly in the car market because automakers are unable to lower their prices, says the Los Angeles Times.

• Nissan has sold fewer than 6,800 of its Leaf electric cars, down from 16 percent last year.
• Honda leased only 48 of its electric version of the Fit this year.
• Similarly, Mitsubishi sold less than 500 of its MiEV mini-car.
• Tesla Motors, which expects to sell about 3,000 of its electric car this year, has sold fewer than 300.
• Altogether, the industry expects to sell 500,000 gas-electric hybrids, accounting for about 3.5 percent of overall auto sales in the United States.

A survey done by JD Power and Associates looked at the reasons for why people buy or plan to buy electric vehicles.

• Forty-four percent of electric vehicle owners said low emissions are the top benefit of their vehicle.
• However, of the people who plan to buy an electric car, only 11 percent cite environmental concerns as their top reason.
• Instead, 45 percent of people say they plan to buy an electric car because of the savings on fuel.

Savings on fuel can be significant according to the study. Owners found that utility bills went up by only $18 to charge their electric vehicles, yet brought down fuel costs by nearly $147. The main problem the industry faces is that battery powered electric vehicle cost around $10,000 more than a standard gasoline-powered vehicle, meaning it will take consumers more than six years to make the investment worthwhile.

Source: "JD Power Study: Electric Vehicle Economics Don't Pencil Out," Los Angeles Times, November 8, 2012.