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        home > news > Automobiles > Are Battery Car Sales Charging Up?

        Are Battery Car Sales Charging Up?

        Chevy Volt to set a record in August

        Paul A. Eisenstein
        Paul A. Eisenstein , Publisher & Editor-in-Chief
        Aug. 30, 2012
        Chevrolet Volt sales are gaining momentum -- apparently driven by the 2013 model's ability to get an HOV-lane sticker in California.

        With the second anniversary of the launch of two critical battery-electric vehicles fast approaching, many observers have been questioning whether the public has been turned off to the costly technology.  There’s no question that the Chevrolet Volt and Nissan Leaf got off to a slow start.  And, when you add in less advanced battery technology, namely gas-electric hybrids, demand has clearly slowed since fuel prices hit their April peak.

        Yet, despite recent, largely negative headlines highlighting plant shutdowns, recalls and other setbacks, there are signs that battery car sales may be charging up, after all.

        News You Can Use!

        Perhaps the biggest sign of a turnaround has come from Chevrolet which is reporting that it expects sales of the Volt to top 2,500 by the time it closes the books on August.  That would be a tripling of sales compared to year-earlier levels – and a 10% jump from Volt’s previous record, the 2,289 sold in March of this year.

        The maker has just 54 days worth of the vehicles in dealerships across the country and barely 34 days of inventory in California. The Golden State has been leading the surge since the launch of the 2013 Volt – which now qualifies as a so-called P-ZEV, or Partial-Zero-Emissions Vehicle, under California law.  That means the ’13 Volt can be driven in the state’s less crowded HOV lanes even with only one person aboard.

        But Chevy officials say they’re also seeing demand grow in Michigan, Illinois, Florida and other parts of the country as awareness of the vehicle’s gas-stingy technology grows.

        Ironically, Volt sales could be hurt in the months ahead due to the decision to shutter the Detroit-Hamtramck Assembly Plant.  Initially reported by some media as a result of poor Volt sales, the closure is actually forced by the need to retool the plant to add another model, the 2013 Chevrolet Impala.

        The situation isn’t quite so upbeat for the Nissan Leaf which launched about the same time as Volt.  Leaf sales overwhelmed those of its Chevy rival throughout 2011 – but they’ve lagged behind this year.  Through July, sales for the year totaled a modest 3,543, down 26%.  July numbers were 395, a 58% decline.

        Nissan officials insist that’s the result of short inventory.  The maker has been diverting more production to markets where Leaf is just launching, asserts U.S. spokesman Dave Reuter.  The big test for Leaf, he says, will come late this year when Nissan turns on a new battery car assembly line at its sprawling factory complex in Smyrna, Tennessee.

        Both GM and Nissan are getting ready to expand their battery car line-ups.  The Japanese maker recently confirmed it will begin selling the Infiniti LE in 2014.  Based on the Leaf, it is expected to get a larger battery pack to improve both range and performance.

        GM has a luxury version of the Volt in development, as well, the plug-in Cadillac ELR set to go on sale next year.  Meanwhile, GM is readying a pure battery-electric version of the Chevrolet Spark for launch in 2013.

        Battery car sales are expected to grow, if for no other reason than the rapid addition of new product.  This summer has brought the launch of a wide range of new offerings from major manufacturers including:

        • Toyota, which launched a plug-in version of the Prius – itself America’s best-selling conventional hybrid;
        • Toyota also launched its first pure battery-electric vehicle, or BEV, in two decades, the RAV4-EV;
        • Honda introduced a BEV version of the little Fit, and will bring a plug-in of the 2013 Accord to market early next year;
        • Ford is now ramping up sales of the battery-electric Focus and is preparing to launch a plug-in version of its new C-Max “people-mover.”

        Other makers, including Fiat, are or will soon, have plug-ins and battery-electric vehicles of their own.  But it’s clear not everyone is enthusiastic about getting into the battery business.  Even before the first Fiat 500 EV reaches showrooms, Fiat/Chrysler CEO Sergio Marchionne has dubbed it – indeed, all battery-electric vehicles – “economic lemons,” because Fiat and most of its competitors are likely to “lose money on every one we build.”

        There’s no question, says analyst Joe Phillippi, of AutoTrends Consulting, “Range has to grow and prices have to fall – in both cases by a significant amount.”

        So, why are makers even bothering?  In part, to earn respect from green-minded consumers who have increasing sway over the overall U.S. auto market.  In part, to learn more about the technology which, over time, will help improve performance and lower cost.

        Another factor, acknowledged John Mendel, the top U.S. executive with Honda, is the seemingly all-powerful California Air Resources Board.  It has mandated that all major makers sell a minimum number of Zero-Emission Vehicles.  “Nobody wants to have to stop selling cars in California,” or the other states that have copied its mandates, Mendel explains.

        But while they may be selling battery cars, that doesn’t mean makers like Honda or Toyota like them.  The bigger maker only plans to sell about 2,600 RAV4-EVs in California over the next three years, just enough to keep regulators happy.

        On the other hand, should consumers surprise the maker, it could ramp up production.

        Not all manufacturers are so cynical.  Nissan believes it could move 10s of thousands of Leafs and Infiniti LEs in the next few years, and the Smyrna plant alone has capacity to roll out perhaps 200,000 or more battery vehicles annually.

        GM has backed down from an initial target of 60,000 plug-ins this year – 15,000 of those meant for export – but it is still upbeat about longer-term acceptance.

        Meanwhile, Tesla Motors claims to already have 12,000 orders for its new Model S which carries a price tag running from $57,000 up to over $100,000 for a version equipped with a 300-mile battery.  Initial production is running slower than expected but Tesla claims it will have it annualized “run rate” at nearly 25,000 by year-end, by when it hopes to have deliver its 5,000th battery sedan.

        But there remain plenty of skeptics saying “show me.”  And they point to the initial, disappointing results at Fisker Automotive which recently had to order a second recall as the result of a fire caused by a defective fan system.

        “It’s going to be a long, slow, steady slog,” contends analyst Phillippi.  “Other than the true believers, the early adopters and techies, it’s going to take time to convince the mainstream market.”

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