Detroit - The fledgling electric car business is in turmoil as
predictions about potential sales have proven to be wildly optimistic
despite volatile fuel prices and plenty of media hype.
consumer demand is hitting both the big automakers like General Motors
and Nissan - which have failed to meet sales targets on the plug-in Volt
and all-electric Leaf - and smaller start-up firms trying to carve out a
piece of a very small niche.
"Electric vehicles don't make any
more sense today than they did in 1912," said Sean McAlinden, an analyst
with the Centre for Automotive Research in Ann Arbor, Michigan.
"They take too long to charge, the range is too short and they cost too much."
cars also face stiff competition from hybrids and improved fuel
efficiency in conventional vehicles as automakers update their fleet to
meet tougher government standards.
Toyota recently announced
plans to drastically scale back the release of its all-electric eQ and
Honda has limited the release of its Fit EV to 1 100 US customers over
the next two years.
Volt - which can switch over to a regular petrol engine once the battery
runs out of juice - is by far the most successful electric car in the
After a slow start, Volt sales have tripled this year with
help of discounted leases and a decision by California to allow them in
fast-moving carpool lanes on the state's clogged freeways.
sales of 16 348 through September are still far short of the 45 000
Volts that the US Department of Energy forecast in a 2011 report that GM
could sell per year.
As fuel prices rise, consumers have been
far more attracted to Toyota's Prius hybrid, which saw sales double this
year to 183 340 vehicles.
Sales of the all-electric Leaf - which
has a maximum range of 117km - are down 28% to just 5 212 vehicles in
the US this year despite a major marketing push.
Nissan - which
is preparing to open a new assembly for electric vehicles in Tennessee -
is falling well short of CEO Carlos Ghosn's ambitious goal to double
Leaf sales for fiscal 2013.
Only two years ago, the Boston
Consulting Group predicted electric vehicle sales could reach 5% or
roughly four million to five million vehicles of the industry's total
global sales volume by 2020. Now they are saying electric vehicles might
represent just 3% of total global sales.
the big automakers can cushion their massive investments in electric
vehicles with sales of conventional cars, the painfully slow growth and
the difficulties in adapting electric technology to the tastes of modern
motorists have posed huge challenges for start-ups.
is falling behind in its efforts to produce a sleek new electric
vehicle, the electric vehicle start-up company spawned by Silicon Valley
billionaire Elon Musk acknowledged in a recent regulatory filing.
That leaves the Palo Alto, California-based company in danger of failing to meet the terms of a $465m Energy Department loan.
Nonetheless, electric vehicles advocates remain upbeat and investors are not shying from the companies.
was able to raise $128m by selling new shares of common stock and
Fisker Automotive also raised $100m in new capital in September despite
problems with the launch of its extended range electric vehicle, the
Tony Posawatz, Fisker's third chief executive officer
since February, acknowledged the company made mistakes but dismissed a
crushing review by Consumer Reports, which described the Karma's design
"Customers do like these cars," said Posawatz, a former GM executive who had been responsible for bringing the Volt to market.
Fisker has sold more than 1 000 Karmas, which cost $103 000, since the car went on sale last December.
Posawatz also predicted the technology for electric and extended range electric vehicles will catch on.
took 10 years, but the Prius is the best-selling vehicle in
California," he said at a recent meeting of the Automotive Press
Association in Detroit.
The company is moving ahead with plans to
build its next vehicle, a sedan dubbed the Atlantic that will costs
roughly half as much as the Karma, and expects to raise another $200m in
private equity funding soon.
Meanwhile, Tel Aviv-based Better
Place is looking for new direction after replacing founder Shai Agassi
with a new chief executive officer.