The EV Market is Not Short Circuited, Says Bob Lutz

It’s been several years since the Tesla Roadster was introduced, and two years since the Chevrolet Volt and Nissan Leaf were launched. Other electric vehicles have come along as well, but as of last month, the U.S. market had purchased fewer than 46,000 electrified plug-in cars this year out of 13 million total vehicles.

In a recent opinion piece for Forbes, former GM Vice Chairman Bob Lutz says yes, things are slow, but he’s not surprised.

Often good for colorful commentary, Lutz’s write-up published last week cited corporate and governmental expressions of “breathless hype surrounding the imminent triumph of electric vehicles.” These, said Lutz who’s been called the father of the Volt, were soon extinguished by “the facts of low fuel prices, abundant oil supply, high EV prices.” And following in the wake of the wake up call, Lutz says, is an injured reserve list of EV market players including A123 Systems, with Fisker and Coda in “dire straights,” not to mention others that have fallen or may yet.

What gives? Are the critics right? Is electrification an idea whose time has not come? Are wheels of “hyped” progress coming to a halt?

No, says Lutz. Instead, he essentially says, irrational exuberance and intoxication over the thought of the pending dawn of a new EV day is giving way to reality of a distant – but just as real – horizon.

“The electric vehicle market is moving exactly as I have consistently predicted,” said the purveyor of extended-range GM light duty VIA Motors trucks. “I have always maintained that pure EVs will have a limited future until there are cars selling for $30,000 with a reliable 300-mile range. Extended-range EVs (E-REVs), like the Chevrolet Volt, overcome the range problem, but at a steep price premium.”

Lutz says the only segment that will see fast adoption of extended-range EVs is the type he happens to be a paid consultant to promote for VIA Motors. These would range-extended full-size pickups, sports utilities and SUVs like VIA is slated to continue showcasing this month, “because their gasoline counterparts use so much fuel that the owner of an E-REV version will actually save money almost from day one,” he says.

So while these light-duty trucks aimed primarily at fleets may cost upwards of $70,000, they get up to 100 MPGe, and stand to see faster adoption than passenger vehicles, Lutz says. Whether this proves to be the case, it is at least a fact that saving substantial fuel in a gas guzzler nets a larger dollar savings than for a higher efficiency car.

Other Lutz predictions are that by 2020, E-REVs and strong hybrids might be selling at about 1.5 million units annually, with a 10-percent market share in the U.S.

And “ultimately, of course” the EV will supplant all petrol power and cars that run on dino juice will go the way of the dinosaur.

The problem now is the public is like a kid saying, “when are we going to get there?!”

Or, as Lutz phrases it, “Trouble is, nobody quite seems to hear ‘ultimately,’ or can’t or won’t understand it.”

Lutz says the harsh reality has tempered the hypesters and Pollyanna dreamers and he describes an “EV bubble” that’s a lot like the dot-com bubble.

But the good news is nothing is wrong, and his first vision remains untarnished. EVs will happen, Lutz says, and everyone has to just be patient if that’s possible given “we never seem to learn.”

As for the bubble bursting only to be replaced by slow progress for the next decade or two or more, we’d just as soon peer into a crystal ball and prophesy that one as we’d discern the glint of a transient bubble.

Anything could happen including Mr. Lutz could be presciently correct. And for all we know he has fair odds that he will be. After all, as he points out, he has been right since the beginning.

Forbes