Cars with cords are coming. It’s inevitable, because everyone from Audi to Volvo is working on one. The first of them will be in showrooms by the end of the year. That’s great, but is there really a market for plug-in hybrids and electric vehicles? Consumer Reports says there is and it could be big — provided the cars don’t cost an arm and a leg.
Consumer Reports surveyed 1,752 American adults and 26 percent of them said they likely would consider a plug-in car of some kind next time they’re in the market for new wheels. Seven percent said they are “very likely” to consider one. On the other hand, 72 percent said they are unlikely to contemplate getting one.
Still, one in four is a respectable figure for a technology still in its infancy, and EV advocates say it bodes well for the success of cars like the Nissan Leaf EV, Chevrolet Volt range-extended electric vehicle and the Toyota Prius plug-in hybrid.
“This study confirms the pent-up consumer demand for plug-in electric vehicles that we have been hearing about from people all over the country,” Sherry Boschert, co-founder of the non-profit organization Plug In America, told Wired.com. “Automakers that vigorously respond to this demand will have an edge up on competitors who stick to gasoline-only cars. Millions of Americans want to drive on clean, affordable, domestic electricity.”
Millions?
Yes, Boschert wrote on Plug-In America’s blog.
“Let’s play with some more conservative numbers,” she wrote. “The U.S. Department of Transportation estimated that there were 136 million passenger cars nationwide in 2007. If even 7 percent of those were plug-in vehicles, that’s 9.5 million EVs and PHEVs.”
That’s the total number of cars on the road, not the number sold. Automakers sold about 10 million cars in the United States last year. If you figure 7 percent of them had an extension cord you’re looking at 700,000 vehicles. (Yes, we know the Tesla Roadster was the only highway-legal plug-in vehicle of any kind available last year, but let’s put that aside for the sake of argument.)
Not so fast, said Mike Omotoso of J.D. Power and Associates. Consumer Reports‘ findings look good, but there’s more to it than that.
“The percentages sound impressive,” he said. “But we have to remember that just because people say they’re considering it doesn’t mean they’ll buy it.”
A lot of people say they’ll consider an electric vehicle, or a hybrid, because it sounds good and they think it’s the right thing to do. Many of those people might even be serious about it. But most of them balk when they see the sticker price.
The Volvo C30 Electric concept at the Detroit auto show. Photo: Chuck Squatriglia / Wired.com
J.D. Power’s 2008 Alternative Powertrain Study is a case in point. A survey of more than 4,000 people planning to buy a car within the next two years found 62 percent could consider a hybrid. Another 16 percent said they’d consider a diesel. But very few of them left the dealership in one.
“Only 2.4 percent of vehicles sold in 2008 were hybrids, and about the same number were diesels,” Omotoso said. “People say they’ll consider it, but when it comes down to it, most of them buy a conventional car with a gasoline engine.”
Why? Easy — hybrids, plug-in hybrids and electric vehicles are relatively expensive. No one’s mentioned specific prices yet, but the Leaf is expected to go for somewhere in the high $20Ks or low $30Ks. General Motors is believed to be doing everything possible to keep the Chevrolet Volt under $40,000. (Leaf and Volt prices are before the $7,500 federal tax credit for EVs.) And Toyota promises the plug-in Prius will be “affordable.” The Prius hybrid starts at $22,800.
Consumer Reports offers some evidence backing up the sticker shock issue. Among the respondents who said they’d consider a plug-in car, the median amount they’d be willing to pay over the cost of a similar conventional car was just $2,068. One in five people said they wouldn’t pay one cent more for the technology. On the other hand, the same number of people said they’d fork over as much as $5,000 more.
The cost of the technology has always been one of the biggest barriers to its acceptance, and it all comes down to the batteries. They’re expensive — really expensive. Automakers don’t talk about it, so no one knows for sure how much batteries really cost, but a study by Boston Consulting Group puts the cost at $1,000 to $1,200 a kilowatt hour. For that reason, the group concludes, electric vehicles will remain expensive for quite some time. Fiat and Chrysler boss Sergio Marchionne said a production version of the Fiat 500 EV could cost as much as $32,000, with the battery accounting for half that.
That said, electrification advocate Felix Kramer of CalCars argues the BCG report grossly overstated the cost of the batteries, which General Motors says cost “hundreds less” than the consultants say they do. It also notes Deutsche Bank — which, by the way, loves Better Place’s plan to bring us EVs — says batteries are going for about $650 a kilowatt-hour and should be half that by 2020. And Argonne National Lab predicts plug-in hybrid batteries could cost $225 or less per killowatt hour if they’re produced in volumes of 100,000 a year or more.
Cost isn’t the only issue. Range is another sticking point, but Consumer Reports suggests it may not be as big an issue as naysayers would have you believe. Consumers want their cars with cords to have a range of 89 miles (median), according to CR’s study. Men wanted a little more — 106 miles — and people earning less than $50,000 said 102 miles would be ideal.
All of those figures are within the realm of possibility for current technology. Nissan says the Leaf will offer 100 miles. Mitsubishi says the i-MiEV is good for 81 miles. And then there’s the Tesla Roadster, which squeezes as many as 236 miles out of its 53 kilowatt-hour battery provided you aren’t stomping on the accelerator.
There are a lot of people who would be happy with less than that. Consumer Reports found 45 percent of respondents could live with less than 75 miles range, and 29 percent said they’d be happy even if they got less than 49 miles. That’s getting into the range offered by plug-in hybrids and range-extended EVs. General Motors says the Volt will go 40 miles on a charge before its gasoline engine kicks on to drive a generator that keeps electricity flowing to the wheels. At that point, you can keep going until you run out of gasoline.
“From our respondents, nearly three in 10 require a daily range of at least 200 miles — well within the capabilities of a Volt,” Consumer Reports said.
At this point, plug-in hybrids and electric vehicles are still theoretical to most people. They might be aware of them, and they might even be considering buying one. But we won’t really know how many people will buy one until they’ve driven one and considered the cost, the range and the convenience of owning one. The Consumer Reports study suggests many people will like what they see.
AUTOPIA
http://www.wired.com/autopia/2010/03/consumer-reports-plug-in-study/
