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Tuesday, April 17, 2012

This is why Obama refuses to drill: Sales of FORD's electric Focus in February and March: Zero

Nobody wants electric cars with today’s technology. I want to be able to drive more than 40 miles before needing a recharge.

Car testers wouldn’t even drive the Chevy Volt any distance from the testing facility for fear of being stranded. Fox Tested one and it ran out of juice in the Lincoln Tunnel.

They also tend to catch fire.

The only way anyone, other than a hard core tree hugger, buys one of these is the high price of gas.

Battery-powered autos proving to be a tough sell

  • By David Shepardson, Detroit News Washington Bureau

Ford group vice president Derrick Kuzak discusses Ford’s Focus electric, which had no sales in February and March.

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Ford group vice president Derrick Kuzak discusses Ford’s Focus electric, which had no sales in February and March. (John T. Greilick / The Detroit News)

Washington— Electric vehicle sales have been slow out of the box, despite marketing hype, government incentives and the hopes of green car advocates.

Total sales last year were 17,425, which is less than 0.1 percent of the U.S. car and light truck market.

Nonetheless, automakers show no signs of pulling back their multibillion-dollar bets: They need electric cars to meet tough new fuel-efficiency standards. About a dozen new plug-ins and fully electric cars will go on sale in the next year.

Auto executives point optimistically to March, when electric cars had their best-ever sales month: Nearly 4,000 vehicles sold in the United States. Still, three in every 1,000 cars drove off dealer lots under battery power.

News in recent months has done little to reassure skeptical buyers: General Motors Co. slowed production of its plug-in Chevrolet Volt. Two crash-test Volts caught fire; a government investigation ultimately found no safety problems. Politicians ridiculed electric cars and called for an end to government assistance. Battery companies and suppliers laid off hundreds of employees, while several electric vehicle startups went out of business or struggle to survive.

Even with gas prices flirting near $4 a gallon nationwide, most consumers remain reluctant. Plug-ins or fully electric cars cost $8,000 to $20,000 more than comparable gasoline versions, and it can take years or decades to recoup the higher initial cost.

Drivers worry about limited driving range in fully electric cars. Even some executives admit doubt.

"Right now, from a cost standpoint and a performance standpoint — range for customers — I don't think EVs are ready for primetime," said Toyota Motor USA Sales CEO Jim Lentz.

Toyota will launch two electric vehicles later this year. Toyota sold nearly 900 of its new plug-in Prius in March, but that was 3 percent of the more than 28,000 plug-in and gasoline-electric vehicles that Prius sold last month.

Ford Motor Co. sold about 12 Focus Electrics in December and January to fleet customers — and none in February and March, said Erich Merkle, a Ford spokesman. The Dearborn automaker plans a slow ramp-up as it begins production this spring for retail sales; the New York area and California are the first markets.

Analysts forecast modest gains. The auto website predicts 40,000 electric vehicles will be sold this year, with 70,000 sold in 2013. The projection for 2017 rises to 250,000 cars — about 1.5 percent of the market.

Great promise

The new generation of electric car hit the market with great promise: Clean-running. Inexpensive to operate. Acceleration and speed comparable to a four-cylinder.

GM unveiled its Chevrolet Volt concept at the 2007 Detroit auto show. It was a plug-in hybrid that could get up to 40 miles on battery power before a small gasoline engine kicked in to recharge the battery. The Volt drew enormous attention and became a symbol of GM's technological prowess.

Electric vehicles enjoyed bipartisan support from Democrats and Republicans, from environmentalists and from those who wanted to stop buying oil from unstable foreign regimes. To encourage purchases, President George W. Bush signed into law a $7,500 tax credit for buyers of electric vehicles in 2008.

In 2008, presidential candidate Barack Obama called for 1 million electric cars and plug-in hybrids on the roads by 2015; his administration awarded $2.4 billion in grants to battery and car companies in 2009 as part of a stimulus to make electric vehicles a reality.

Four years later after Bush signed the tax-credit law, some Republicans criticize subsidies for electric vehicles and derisively call the Volt the "Obamamobile." GOP presidential frontrunner Mitt Romney has criticized government loans to electric vehicle startups Tesla Motors and Fisker Automotive Inc.

Facing serious problems

Despite those hundreds of millions of dollars in government support, battery and electric vehicle startups have faced serious problems.

"This is an industry and a country that loves hype," said Brett Smith of the Center for Automotive Research in Ann Arbor. Electric vehicles, he said, are "still a tough business model, and in the end it all comes down to energy storage."

Batteries need to get cheaper and have longer life for electric vehicles to become more widely adopted, Smith said. The infrastructure for charging vehicles on the roads is still woefully inadequate in most places.

Nissan Motor Co. still vows to double sales of its electric Leaf this year, to about 20,000. And Nisan says it expects electric vehicles to be 10 percent of the market in 2020. "I have zero doubt that zero emission is here to stay," Nissan CEO Carlos Ghosn said at this month's New York auto show.

But fewer than 2,000 Leafs sold in the first three months of 2012. Nissan blames first-quarter sales on tight supplies.

GM abandoned its goal to sell 45,000 Volts in the U.S. in 2012 after its missed sales target in 2011. "We're going to have to overcome the speed bump," GM CEO Dan Akerson said.

There has been good news for the Volt: Sales doubled in March to more than 2,200 in the U.S. GM said it would resume production this week of the Volt at the Detroit-Hamtramck plant, a week earlier than planned.

Volkswagen of America Chief Jonathan Browning said he still believes electric cars will be part of the future. "It's important you don't get carried away," he said. "They are not the singular answer."

Consider this: Automakers will need electric vehicles to help them meet tough, new federal fuel-efficiency standards. By 2025, new cars and trucks must average 54.5 miles per gallon. That's double today's requirement.

Meeting fuel standards

More significantly, California has introduced new rules that will dramatically increase the number of electric cars by 2025. Zero-emission or plug-in hybrid vehicles must account for one-in-seven of new cars sold in California by that date.

In 14 years, California says there will be 1.4 million electric vehicles or plug-in hybrids on its roads. By 2040, it expects nearly all cars sold will be zero-emission vehicles.

GM will begin selling an all-electric Spark minicar in California and other limited markets next year.

The White House isn't backing away from electric cars. Obama wants to spend $2 billion to expand the tax credit from $7,500 to $10,000, and to turn it into a point-of-sale rebate.

Chrysler CEO Sergio Marchionne says the automaker will bring an electric version of the Fiat 500 to the U.S. by year's end — its first electric car.

He said only limited numbers of the battery-powered Fiat will be made. "We're going to restrict capacity because we're subsidizing each and every one — even after the incentives."

Ivan Drury, an analystat, says electric cars will see slow adoption as customers grapple with high prices and unfamiliar technologies.

"This is still an experimental technology," he said. "There's going to be a market. It's not going to be immediate and it has to start somewhere."

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