Much of the electric and hybrid car business in the US is subsidized by the US Govt. In 2010, one fourth of GM and Ford’s hybrids were purchased by the federal government. Nissan got a $1.4 billion dollar loan from the feds to develop their electric car, the Leaf. Several thousands of dollars in tax credits per car have to be shelled out to make these models attractive for sale. There is just one problem, they still aren’t selling.
Ten years after the Toyota Prius hybrid swept into the market, only about three percent of all cars sold in the United States are electric or gas-electric hybrids, said David Cole, director of the Center for Automotive Research.
“Initially there was probably some excessive exuberance about the green auto,” he told AFP.
“But the economics are not attractive yet for the average consumer.”
Nissan has sold only 9,700 of its all-electric Leaf in the US market, and General Motors has sold just 8,000 of its rechargeable hybrid the Volt since its launch at the end of 2010, below the targeted 10,000.
The Volt became the object of scrutiny in recent weeks after tests by US authorities saw batteries in three cars catch fire.
Owned by the government, GM has no choice but to produce the Volt, other manufacturers are not so sure.
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Detroit’s investment in hybrids and electrics have picked up pace in recent years under prodding and
Ford this week launched its new 2013 Fusion mid-size sedan, to be sold in gasoline, hybrid and plug-in hybrid versions.
But Mark Fields, Ford’s president for the Americas, would not commit on how many would be made in each format, saying the market would set the pace.
But last year only a fraction of the nearly 250,000 Fusions sold last year were hybrids.
One challenge has been that hybrids, which have both traditional combustion engines and electric engines, are more costly because they require two powertrains, according to Michelle Krebs of auto specialists Edmunds.com.
Moreover, drivers still worry that they will run out of power without a network of recharging stations as widespread as gasoline pumps.
Sergio Marchionne, the head of Fiat and Chrysler, reiterated his doubts over the market, especially for electric cars, at the Detroit show, citing both the pricing problem and the availability of batteries.
Marchionne’s counterpart at Renault Nissan, Carlos Ghosn, is more positive but recognizes big hurdles.
“I admit I am much more optimistic on electric cars than most people. We are very far from the potential of the market,” he said in Detroit.
“The problem for the moment is the supply and the bottlenecks with the batteries,” he said in Detroit.
The “green” car industry is a classic example of what happens when the government tries to create a marketplace that isn’t there. President Obama has decided the green car business would take over for combustion engines, but in order to make that happen, the federal government had to ridiculously subsidize their manufacture and they are still not selling…That’s just government stupidity at work.