Yes gas at the moment is cheap, conventional car sales are up, regular hybrid sales are down, but ... in the U.S. last year, sales of plug-in electrified vehicles (PEVs) including all-electric and plug-in hybrids rose by 23 percent.
To date, Americans have purchased close to a third of one-million PEVs, globally around three-quarters of one million have been sold, and the first million worldwide is projected by this year.
Although PEVs now comprise just three-quarters of one percent of the 16.4 million passenger vehicle market in the U.S. – which is the world’s largest PEV adopter – the growth is happening against resistance and appears to be accelerating.
Why are these vehicles being introduced, and why are people buying them? There are a variety of views on this floating out there, some informed, some not as much.
Following are seven major interrelated factors driving the development and purchase of plug-in vehicles, and no doubt, some of you could come up with more.
Regulations
Whether cynically or gratefully, industry observers note the chief factor pushing major manufacturers beyond a comfort zone into plug-in technology may be because they have to.
Actually, federal Corporate Average Fuel Economy (CAFE) regulatons for 2017-2025 do give automakers an out, and rules are written allowing them not to build more than 1-3 percent PEVs by 2025 to meet tightening emissions and mpg rules.
But PEVs are an excellent way to comply with CAFE’s mandate to bolster new vehicle window sticker averages into the low 40s within one decade and either way, California’s Zero Emissions Vehicle (ZEV) mandate is in place too.
These rules call for one-in-seven ZEVs (15 percent) to comprise new car sales by 2025. California and a dozen other states following its rules constitute around a quarter of the U.S. passenger car market and serve as a serious prod to automakers.
From Geneva last week, Audi for example was quoted as saying it is building ZEVs primarily for that reason.
Europe also is gearing up – or bracing itself – for “real world” emissions tests from Euro 6 standards that have industry leaders like Volkswagen CEO Martin Winterkorn issuing such cheery warnings that these could be “fatal” to the car industry.
Winterkorn figures Volkswagen will need to spend around $3 billion to meet a 65 gram CO2 per kilometer standard, or about one-quarter of the company’s 2013 gross earnings. But if rules hold fast, others believe automakers will dig into their pockets and do what they must – and figure a way to profit anyway.
China and Japan also are pushing tighter rules, and all told, automakers are being coaxed or even forced to develop battery electrified technologies – be they plug-in hybrid, or all-electric.
Not all automakers have complained as bitterly, and for their part, policymakers cite varying reasons for pushing battery technology cars.
Environmental Concerns
Canadian tar sands site. Costs to the environment from extracting petroleum has been another point of deep controversy
One major reason regulatory bodies around the world are mandating fewer emissions are of course broad environmental concerns. Greenhouse gas emissions are generally recognized as contributors to climate change, and science cited is used to support the rules.
But beyond that, particularly in the U.S. where “climate change” has deniers and debunkers ready to tackle this topic called a “hoax” and a "scam," reasons for reducing emissions also include general health and ecological considerations.
To whom it may concern: If you don't believe hydrocarbons contribute to melting icecaps and unhappy polar bears, do you believe they can give kids asthma or bring on other woes?
Other byproducts from burning gas or diesel have been known to cause human ailments in adults and children. Aside from the untold pain and suffering these can cause, financial costs treating diseases and conditions are something most agree would be better off avoided.
As for leading protagonist California, its Air Resources Board got its charter in 1967 under then-governor Ronald Reagan simply to improve air quality in the state. It has since cited greenhouse gas emissions as a major concern, but heavy smog blanketing Los Angeles once upon a time was a motivator beforehand for authorities to clamp down and general air quality remains at stake.
And, beyond this, the federal government shares similar concerns and foreign governments moved by their own view of local and global environmental issues are also pushing for tighter controls and fuel conservation.
Europe is more unified on the "climate change" question, and focused on greenhouse gas emissions. China is too, and more than that, its toxic urban air has been a threat more dire than LA at its worst.
Automakers doing business around the world are being pulled into compliance with environmental mandates every which way they turn.
Energy Security
The U.S. Department of Defense has increased spending to find alternatives. Meanwhile, the U.S. is moving forward with fracking. Whether this is good or bad policy, others observe these sources may be unsustainable and will eventually run out, only delaying "peak oil." Finding alternatives before it becomes a case of managing a crisis is in keeping with the proverb: "The wise person sees trouble ahead and avoids it, but the naive continue on and suffer the consequences."
Another major reason to get off of oil is to have fuel choice and freedom of a different but very real sort.
Petroleum is a global commodity and the U.S. is not in control of what it pays for it. U.S. transportation requires up to 70 percent of all oil consumed. The U.S. is a net importer of oil, although with fracking and horizontal drilling, the U.S. Energy Information Administration now observes imports are the lowest they’ve been for 20 years, at about 33 percent.
Further, according to Oxford University’s Oxford Institute of Energy, it is a “myth” the U.S. is dependent on Middle East oil and its military and diplomatic involvement are there to only maintain this flow.
The U.S. has never imported more than 14 percent of its oil from the Persian Gulf, however it does remain vulnerable to threats from terrorists and just as potentially terrifying, it is at the whim of market prices.
U.S. foreign involvement, it is said, thus goes beyond maintaining flow for supply's sake, and attempts to maintain stability as instability can spike prices in a complex geopolitical equation.
“For example, in 2011 the war in Libya caused oil prices to U.S. consumers to spike by $25 per barrel despite the fact that the USA imported no oil from Libya,” says a report from the Oxford Energy Forum . “Therefore, even if the USA miraculously became self-sufficient in oil, it would not be shielded from the world market.”
On the other hand, if the U.S. did not need oil so much for transportation, energy security advocates believe the U.S. could reduce its involvement in sensitive petroleum producing regions.
Today groups around the world opposed to what they view as American values and its foreign policy have become enemies to the U.S. Energy security has been likened to national security, and the U.S. Defense Department has repeated this assertion at various times.
Thus, goes the rationale by energy security advocates, hybrid and plug-in electric vehicles powered by domestically sourced electricity can help reduce U.S. reliance on imported petroleum and increase American security.
Technological/Economic Leadership
One of the not-often-cited reasons for why both sides of America’s deeply divided political aisle once signed off on a $7,500 consumer plug-in tax credit in 2008 under the Bush administration was to help America as an economic leader.
A New York Times editorial by Joe Nocera last month cited the need for game-changing batteries to foster U.S. leadership in an emerging technology.
Quoting Steve LeVine, Washington global economic correspondent for Quartz, Nocera wrote there is “’a loss of confidence in the U.S. in our ability to create a real economy’” — one based not on financial instruments or a real estate boom, but real products that would help create entire new industries.”
“France and Germany and China have renewed their push for electric cars,” [LeVine] says. “The stakes are so high and the dividends so rich that they keep going” — even if the quest seems, at times, quixotic.
“Besides, batteries are, as LeVine puts it, ‘a hard problem.’ If the government won’t try to solve that problem, who will?”
It’s a debatable concept to be sure, but the simple idea is this: plug-in cars are being developed globally by competitive nations vying to lead.
The upshot is no one wants to be left behind. For Americans reading this, the idea of spurring the economy and riding a wave toward new energy could be good for the country.
Assuming this happens, this is true if you are a Democrat, Republican, Tea Partier, “Other,” or “none-of-the-above.”
Tesla Motors
In January this year, GM surprised the automotive world with the Chevy Bolt which “beat” Tesla’s Model 3 to being revealed, and may even beat it to production in 2017.
What escaped some peoples’ attention in the here-today-gone-tomorrow news cycle was GM had tipped its hand in 2013 that a 200-mile, mid-$30,000 EV would be built in anticipation of the Model 3.
Tesla CEO Elon Musk even tweeted his approval of GM’s now-former CEO Dan Akerson’s statements it would compete with Tesla, and bring its own affordable EV to market.
“Am happy to hear that GM plans to develop an affordable 200-mile range electric car,” said Elon Musk September 2013 in response. “Right target. Hope others do same.”
And now, what do you know? Nissan in January said it would follow GM to market with a 200-plus-mile next-generation Leaf, Ford this month was reported as preparing its own of similar specification, and who will be next?
SEE ALSO: Is a 200-Mile EV the Next Automotive Benchmark?
The de facto next standard of 200 miles, mid $30s, by 2017 is anticipated, and assuming it comes – including the as-of-yet phantom Model 3 – other automakers will need to follow or today’s goods will look like tomorrow’s dinosaurs.
Thus without exaggeration or as an expression of fanboyism, Tesla Motors is itself a significant driver of the global electric vehicle market. It is leveraging its influence well beyond its current production volume even as the "disruptive" company prepares the Gigafactory, plants Superchargers, and makes fans – and detractors – daily.
Despite not turning much in the way of a substantial profit yet, the company is in rapid growth mode, has captured the imagination and luxury car market with its Model S. This plus its Model X that's sold out for the next couple of years before it’s even revealed and more are making major players take notice.
On the upscale side of things, Tesla has stepped conspicuously on the toes of Mercedes-Benz, Audi, BMW, and others in selling higher volume against certain models of these established brands.
Other Automakers
This week Audi said it would build a 300-mile electric SUV by 2018, by 2017 Mercedes-Benz says it wiill have 10 plug-in hybrid variants along with EVs, and BMW has started a whole sustainable i-series.
As mentioned, more-affordable cars around the $30,000 price point after tax credit are coming too.
Beyond Tesla, every automaker is now on board with the agenda – whether they have products now for sale, or only limited “compliance” cars, or only now developing future products.
Leaders in this space with pioneering products include General Motors and its Volt and now Bolt EV pending with lessons learned by its Spark EV, Ford with plug-in Fusion and C-Max Energi, Renault-Nissan with its Leaf in the U.S. and other cars in other markets.
The Germans have discovered plug-ins as an excellent way to pass regulations and increase their reputations for technology and even green credibility as well. Really, now that the pump has been primed, automakers are working on pumping out more as they are able.
Consumer Demand
The common objections to battery electric cars were explicitly stated in September 2012 by Toyota’s “father of the Prius,” Takeshi Uchiyamada.
“The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge,” said, Uchiyamada.
Meanwhile Toyota’s Japanese competitor Renault-Nissan has sold over 160,000 Leafs worldwide and is proffering other EVs under the Renault and Nissan nameplates. GM's Volt/Ampera likewise, while attacked in the U.S. by politicized critics, and for its initial $40,000 price tag plus miscellaneous other reasons, has also sold around 90,000 copies worldwide and the Volt is approaching generation two.
The counterpoint to the idea that battery power is not ready for prime time is people are embracing them thus showing their upside potential.
If it sounds absurd to buy a $30,000-$36,000 (before subsidies) car like the Leaf and other EVs that go just 80-miles or so per charge, that it is happening does indicate pent up demand and desire to stop consuming petroleum.
Soon more fence sitters may jump in with the next Volt launching this summer and by 2017 the wave of 200-mile EVs. On the upscale level, shoppers will have Model X, Model S, PHEVs and EVs from the Germans, Japanese, Americans and more.
Infrastructure is still scant compared to gas stations, but every home has a plug and ability to charge at home is often seen as a benefit, not an inconvenience.
Freedom from the pump, and kissing oil goodbye has prompted a spate of vanity license plates attesting to the fact that oil, gas, OPEC, and related subjects are no longer wanted. Plug-in cars, unlike conventional hybrids which must always use petroleum, do permit this.
PEVs are also being enjoyed in their own right as simply good cars that seem to be holding up, and need less maintenance. While there are good, better, and best cars, the “fun to drive” factor from novel, quiet models with instant torque is there, and word-of-mouth testimonials are increasing grass roots interest.
On the down side, with the exception of Tesla, first-generation cars such as the Chevy Volt and Nissan Leaf have seen resale values not keep up with comparable gas cars.
Leasing has been the preferred means to get around this and IHS Automotive reports 85 percent of Leaf buyers lease, and 49 percent of Volt buyers do as well, for example. This also nets some or all of the $7,500 federal tax credit for which these vehicles are eligible regardless of the lessee’s actual tax liability that tax year.
The upside to lower resale values and rapidly evolving products is inexpensive clean used examples are filtering down for others to follow the early adopters.
In sum, it’s not all rosy, but the grass is green on the other side of the fence too, and more and more are crossing over.
Volt News
64,000 Chevy Volts Being Recalled For Carbon Monoxide Risk
Following two injuries attributed to carbon monoxide exposure, General Motors is recalling 64,000 Chevy Volts to update software controlling the unique extended-range EV.
Cars affected are from 2011-2013 and if owners leave the car on in EV mode parked in a garage, the gas engine may later kick on creating emissions in a confined space.
"If the gas engine runs for a long period of time within an enclosed space, such as a garage, carbon monoxide could build up," GM said.
The software update will limit the time a Volt can be left idle in the “on” position, said Automotive News. Normally the car emits a chime to warn the vehicle is still on, but this my be overlooked.
The bulk of recalled Volts will be from the U.S., with 50,249 being called back. Another 13,937 are in Canada or been exported.
It was not stated what the “injuries” were from CO exposure GM conceded and no one has been reported to have died from this issue.
While GM has been blamed in other incidents such as the ignition switch recall, pundits are already offering that GM did create a warning suggesting owners themselves are failing to pay heed to safe operation of their vehicles.
Beyond the alert chime, the solution GM has is to engineer more safety, a common policy today in many arena to handle areas in which someone may be hurt even if one might say their own negligence was fully or partly to blame.
Automotive News
