Now four years since the advent of the mainstream plug-in car, and several years beyond earlier plug-ins that came and went besides, hindsight reveals good intentions haven’t all gone as planned, but the journey is now well underway.
Last week the U.S. Energy Secretary Ernest Moniz conceded what everyone already knew: the Obama Administration’s 2011 goal of one million “electric” cars including plug-in hybrid and all-electric cars by the end of this year will not be met.
“We’re going to be a few years after the president’s aspirational goal of the end of 2015, but I think that we are within a few years of reaching that goal,” Moniz told The Detroit News last week.
By the end of the year, we may have over 400,000 plug-in electrified vehicles (PEVs), and this month we’ll cross a milestone in and of itself.
Thirty Percent There
When U.S. plug-in sales are tallied this month it’s a near certainty that the 300,000th unit will have been sold.
Counting major manufacturers’ plug-in electrified vehicles – like the Chevrolet Volt, Nissan Leaf, Tesla Model S and all others – along with other limited or now-extinct vehicles, the U.S. tally through December 2014 is 295,322 units.
While January is typically a slow sales month, chances are good that this month as many as 8,000 or so PEVs will be bought and only 4,678 are needed for 300k.
To be clear, the 295,322 count includes now off-the market vehicles, the Fisker Karma, Tesla Roadster, Mini E, Coda sedan, BMW ActiveE – and incremental contributions by vehicles not normally tracked.
These include a 4,640 sales by vehicles like the Myers NmG , Porsche 918 Spyder, Smith Newton trucks, and a few other fringe sellers. The bulk of sales are from regular passenger vehicles by major manufacturers and these add to 290,682 which means the 300,000 milestone is in sight by any reckoning.
About Obama’s ‘Aspirational’ Goal
No one knows the future, not even the Obama administration which after examining market data through 2010 based its then-admittedly “ambitious” projection in early 2011 of one-million plug-in cars by 2015.
An official status report on behalf of the Obama administration issued by the U.S. Department of Energy (DoE) February 2011 attributed numerous variables to the projection and some in hindsight were shaky and unreliable indeed.
A total tally of 1,222,200 potential production capacity including some trucks – but excluding potentially “several hundred thousand EVs” was called for by end of 2015 – and already it was noted some delays were going to affect the count.
“Although the goal is ambitious, key steps already taken and further steps proposed indicate the goal is achievable,” said an executive summary in the DoE’s 2011 status report titled, “One Million Electric Vehicles By 2015.”
Since that time, hindsight has shown the way things have gone.
According to green car analyst Alan Baum, factors affecting the PEV market’s actual growth rate include costs – perceived as high by both consumers and on the automakers’ side.
Another is infrastructure, or lack thereof in certain regions. Another is marketing by automakers who’ve had to learn as they go, make mistakes, and in the case of the Chevy Volt, advertising was ceased everywhere except California more than a year ago after initial adverse issues confronting its acceptance.
Another contributing factor to the shortfall was “dealer problems” – such as those who did not know how to sell plug-ins and some which opted out altogether from promoting certain models.
Also, some planned-for vehicles were delayed and/or low production also contributed to lower sales rates than expected.
Among the myriad variables anticipated in 2011 by the Obama administration’s over-estimate were projections by automakers, and so the accountability goes down the line.
For example, now sidelined Fisker was supposed to have sold tens of thousands of cars all by itself – as evidenced by projected production capacity of 195,000 of its “Nina” later called the Atlantic which never made it beyond concept stage.
Much heavy lifting was supposed to have been by the Chevrolet Volt and Nissan Leaf, but neither cars’ sales rose to the high production capacities on a chart showing by 1.2 million total plug-in cars upon which the 1.0 million sales goal was based.
Chevrolet was credited with a theoretical production capacity of 505,000 Volts based on a steady 120,000 units per year from 2012-2015. Nissan was supposed to have been able to produce 300,000 Leafs. Sales never warranted these production capacity levels that should have only led sales by a much tighter margin.
As the Obama administration hedged with several statements while simultaneously justifying its one-million PEV goal, sales were expected to increase much nearer to production capacity toward 2015, but they never have come close.
For example, GM’s 2012 U.S. sales goal had been 45,000 units and presumably there would have been a ramping up toward higher volumes from 2013-2015. Instead, GM announced by that same year it was dropping all projections, and even for the 2016 Volt it has no projections.
The Leaf meanwhile is also no where near production capacity but is poised this month or next to surpass the Volt in U.S. sales having 72,322 sold through December compared to the Volt’s 73,357.
No one in 2011 projected U.S. fuel prices as staying as low as they did, or most recently, oil and gas prices dropping like they are either.
“Fuel price matters when consumers make automobile purchasing decisions,” said the Obama Administration’s 2011 report. “If oil prices increase, or expectation of further oil price increases becomes prevalent, interest in EVs will likely increase as well.”
However, Baum does not see cheap fuel now being as much of a factor in the big PEV picture.
“I don’t believe that fuel prices are a large reason for the shortfall, since we are still not in the mass market phase for most vehicles,” said Baum having summarized his other reasons above. “That could change if consumer perceptions of fuel prices change, but I don’t believe that has happened as of yet.”
Other things that have never happened to grease the tracks include the federal tax credit being made into a point-of-sale rebate so anyone – not just those who can afford to front the money and whose tax situations permit it – may get up to $7,500 off for a qualified PEV.
“The President is proposing to transform the existing $7,500 tax credit for electric vehicles into a rebate that will be available to all consumers immediately at the point of sale,” said the administration in 2011.
That the Obama administration was not making a rock-solid forecast in 2011 is evident by how it qualified fluid market conditions that could change unpredictably – and did.
“There is clearly substantial consumer interest in electric vehicles, as demonstrated by the larger-than-anticipated pre-orders for the Nissan Leaf and the Chevrolet Volt,” said the Energy Department’s 2011 report. “Whether this interest translates into sales beyond the initial ‘early adopter’ market will depend on initial consumer experience with these early vehicles, and on how that experience is communicated and perceived by the rest of the car buying public. Uncertainties about EVs – including their resale value, range and availability of convenient charging facilities — may impose sales barriers.”
Today’s Actual Market
In all, numerous factors beyond the few major variables just touched upon have shaped the actual U.S. PEV market since 2011 which finished that year with sales at a mere 0.22 percent.
When the Obama administration made the one-million goal, it noted the 2010 economy was coming out of a recession and a shrunken car market.
“U.S. light-duty vehicles rebounded to approximately 12 million in 2010 from less than 10 million in 2009,” said the administration’s 2011 report . “Historically, U.S. sales of new light duty passenger vehicles ranged from 15-16 million per year from 2005-2008. Conventional hybrid electric vehicles (HEVs) have been on sale in the U.S. for over ten years, and today sales have grown to almost three percent of total light-duty vehicles. Over 1.6 million HEVs have been sold over the past six years. To reach the one million vehicle goal, EVs will need to average just under 1.7 percent of sales through 2015 (assuming sales of 12 million light- duty vehicles per year).”
Despite cheap gas which Baum notes did hurt hybrid sales last year, plug-in sales are increasing market share alongside a resurgence of consumers buying trucks and SUVs.
Presently, PEV sales comprise around 0.76 percent of the U.S. market, and Baum projects they’ll cross 1.0 percent in 2016 though we’ve seen other estimates they could be as soon as this quarter. By contrast, regular hybrids have dropped from around 3.2 percent in 2012 to 2.2 percent last year.
This year more plug-in passenger vehicles are coming, including some down-market vehicles along with upscale.
One more substantial factor driving the industry are government regulations including federal Corporate Average Fuel Economy (CAFE) and California’s Zero Emission Vehicle (ZEV) mandates forcing automakers to keep improving their average mpg and emissions.
Despite the president’s politically conspicuous but questionable statement once upon a time, the federal government, as well as regulators in California, Europe and elsewhere have spoken words that do matter with the force of law, and these should not be underestimated.
Looking Back, Looking Ahead
Looking back at projections made for all-new plug-in vehicles and start-up companies facing next to no market, it’s clear guesses were wrong, and there was some hype mingled with hope.
Nor is this the first example of projections into “the future” that hindsight showed quite incorrect.
So, any guesses on what the market will look like in 2019-2020? We have more data now, and as people are inclined to do, projections are still being made.
Baum projects one million PEVs will be reached in the U.S. in 2018.
Beyond that, considering competitive technologies, competitive companies, global markets and economies, there are more variables really than we can quantify or account.
Thus the road to somewhere sustainable may be a straight one, but odds are twists and turns will continue to be encountered along the way, and we’ll say it again: no one really knows the future.