Automakers can’t sell All-Electric Cars and Hybrids because Car Buyers don’t Want Them

Posted by PITHOCRATES - September 30th, 2012

Week in Review

The American car buyer has looked at all-electric and hybrid cars.  And after about two years of looking at them they are telling us what they think about them.  They don’t like them.  They don’t want to buy them.  And the automakers are starting to get the message (see Buyers, automakers raise doubts about electric cars by Chris Woodyard posted 9/28/2012 on USA Today).

Having largely exhausted a pool of electric-car devotees as buyers, automakers are facing headwinds in trying to make plug-in cars a mass-market product.

Nissan joined General Motors last week in offering deeper lease discounts on its premier electric car. The latest deal on the all-electric Leaf brings the lease payment closer to the level of a comparable non-electric car, not counting the gas savings, an analysis for USA TODAY by Edmunds.com finds…

Yet, some automakers are stepping back when it comes to battery-only electrics:

Toyota, for instance, announced this week that it will bring as few as 100 of its electric version of the Scion iQ to the U.S., not the thousands expected earlier. Toyota Vice Chairman Takeshi Uchiyamada warned that current all-electric cars just don’t meet the range requirements of most drivers.

The electric car is perfect for someone who doesn’t drive anywhere.  Where the range of the all-electric car isn’t an issue.  If you have a short commute to work or all your needs are satisfied within a 10 minute drive from your house than the all-electric car is for you.  Well, that.  Or walking.  But if you have a 30 minute drive home from work in a winter blizzard you’re going to want a gasoline engine under the hood.  To keep you warm.  To keep your windows defrosted and ice free.  To keep your headlights shining bright.  And best of all, to get you home so you don’t have to walk home through that blizzard.

EV start-ups aren’t having any easier time. Tesla warned in a filing this week that production of its new $57,000-and-up all-electric Model S sedan has fallen far behind schedule.

The higher price also has put off buyers, and the non-partisan Congressional Budget Office recently issued a report concluding that the government’s up-to-$7,500 tax subsidy for buying an electric car will cost taxpayers $7.5 billion over seven years but does not make up for the extra cost of the cars. It found that electric cars average $16,000 to $19,000 more than a comparable gas-engine or hybrid vehicles.

But cheap leases, along with the savings on fuel costs, have closed that gap some, at least for the Volt and Leaf.

GM has sold 13,497 Volts in the first eight months of this year, according to Autodata, more than three times as many as in the same period last year. The total has been helped by the fact that on the $39,995 Volt, Chevy is offering a $299 monthly lease after a $1,529 down payment.

The Edmunds.com analysis finds that before adding in fuel savings, this amounts to 34 cents a mile for the life of the lease, compared with 22 cents a mile for a comparable, non-electric Chevrolet Cruze, which has a sticker price of less than half a Volt’s.

This is the big problem with all-electric and hybrid cars.  They cost too much.  And people only buy them because the government slaps fat subsidies of taxpayer money on them.  Or by the sales of gasoline-powered cars.  For when they sell a car below cost they have to recover that cost elsewhere.  And the only place they can is in the price of the cars people want and are buying.  Those cars with a gasoline engine under the hood.

So if you want one of these electric cars you have to make big sacrifices in your life.  From not driving anyplace more than a 10 minute trip from your home.  To not buying other things because you’re paying so much more for a car than you have to.

It is clear that the all-electric and hybrid cars are just not viable business models now.  That could change.  But for now any more taxpayer money invested in electric and hybrid cars is money wasted.  Because car buyers simply don’t want to buy them.  Now all we need is for our government to learn what our automakers have learned.

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