Consumers wary of buying electric cars

Nissan CEO Carlos Ghosn is bullish about the future of Nissan’s battery-powered Leaf, but others in the industry are skeptical about the prospects for electric vehicles.
Kiyoshi Ota | Bloomberg News
Nissan CEO Carlos Ghosn is bullish about the future of Nissan’s battery-powered Leaf, but others in the industry are skeptical about the prospects for electric vehicles.
By By Laurence Frost and Alexander Webb, Bloomberg News
Posted Sept. 25, 2011, at 5:59 a.m.

FRANKFURT — Klaus Doerrzapf has solar panels on his home, but he has no plans for an emission-free car in his garage. He’s one of the reasons why automakers won’t recoup investments in electric vehicles anytime soon.

“It’s too early,” the 50-year-old manager at an electrics company said at the International Motor Show in Frankfurt. “Range and price are a problem. Battery life and charging times are also concerns,” Doerrzapf said, while looking at an electric-powered Focus from Ford.

BMW, Volkswagen and Nissan partner Renault talked up their electric vehicles at the Frankfurt motor show as they rolled out a record number of models and began the search for a return on their development spending. Nissan, the maker of the all-electric Leaf, is investing $5.5 billion together with Renault to build electric cars.

Following the introduction last year of the Leaf, Mitsubishi Motors’ i MiEV and General Motors’s Chevrolet Volt, the new models will test consumer appetite for electric vehicles, which cost more than double the price of conventional models. Consumers are balking at paying up, concerned that their own investment will be wiped out in a few years because the batteries may not last.

“We’re about to find out what happens when several big manufacturers try to sell electric vehicles to real people,” said Ian Fletcher, a London-based analyst with IHS Automotive. “The signs aren’t all good.”

Nissan has delivered 12,000 of the Leaf model since its introduction in December, Chief Executive Officer Carlos Ghosn said in Frankfurt. PSA Peugeot Citroen, which beat Renault to the market with two electric city car last December, targeted 7,000 combined deliveries of the iOn and C-Zero models for 2011. It has sold 3,000 since Jan. 1.

Yokohama, Japan-based Nissan said last November it planned to sell as many as 25,000 units of the $32,780 Leaf in the U.S. during the model’s first year. Through August, U.S. sales of the model totaled just 6,168.

The Leaf, which has a range of about 100 miles per charge, costs $40,776 in Britain, even after the deduction of a $7,860 government incentive, while the brand’s similarly sized Note starts at $17,600. In France, the $6,850 government contribution lowers the starting price of Peugeot’s iOn to $48,380, compared with $13m275 for the gasoline-burning Peugeot 107.

“I wouldn’t buy one just yet,” said Jean-Pierre Ahtuam, 38, who runs a juice bar in central Paris. “I’d be worried about where I’d plug it in and whether it will be worth anything in a couple of years — that’s got to be a concern with any new technology the first time around.”

Costly batteries and limited driving range remain the key sticking points for the technology. Public charging stations are also conspicuously absent in most markets. Even the technology’s strongest advocates recognize that success hinges on years of generous subsidies from increasingly cash-strapped governments.

“As things stand, it’s only with this support that we can make the cars affordable for consumers,” said Thomas Orsini, electric-vehicle business development director at Renault, which is predicting a 10 percent global market share for battery cars by 2020. “If the subsidies disappear too soon, the market won’t get off the ground.”

Ghosn, chief executive officer of both Renault and Nissan, remains bullish. Demand for Nissan’s Leaf has outstripped expectations, he said Sept. 12.

“When we first predicted a 10 percent market share, people said we were being extremely optimistic,” the CEO said. “Since then, it’s the experts who have increased their forecasts.”

Not all industry analysts got Ghosn’s memo. Fletcher at IHS expects battery-powered cars to claim about 1 percent of global production in 2020, while rival research firm J.D. Power and Associates puts their market share below 2 percent. The forecasts exclude cars with range extenders, like GM’s Volt, which use a small on-board gasoline generator to recharge the battery on the move.

Even some of the auto executives showing pure electric models in Frankfurt sounded skeptical about their future. Peugeot Citroen sees three times more global demand for hybrids, which combine electric propulsion with a combustion engine.

“Everything we’re seeing today confirms that vision,” said CEO Philippe Varin.

Consumers like Doerrzapf, who owns a VW Passat and works for a company supplying the type of electronics equipment needed to recharge the vehicles, may yet change their minds.

“They are nice to drive,” he said.

 

http://bangordailynews.com/2011/09/25/business/consumers-wary-of-buying-electric-cars/ printed on April 24, 2014