JD Power study: Electric vehicle economics don’t pencil out
Sales of electric vehicles won’t take off until automakers lower prices and demonstrate the economic benefits to consumers, according to a J.D. Power and Associates study of electric vehicle ownership.
Almost two years after automakers started selling battery-powered rechargeable cars in the U.S., the segment is an almost immeasurable portion of auto sales.
Nissan has sold less than 6,800 Leaf electric cars this year through October, and that’s down 16% from the same period last year. Honda has leased just 48 of the electric version of the Fit this year. Mitsubishi has sold less than 500 of its MiEV mini-car. Start-up electric car company Coda Automotive has refused to disclose how many cars it has sold.
Tesla Motors, which launched production of its high-end Model S electric hatchback, has delivered less than about 300, and expects to sell about 3,000 this year, depending on how quickly it can ramp up production at its factory in Fremont, Calif.
Meanwhile, led by Toyota’s family of hybrid vehicles, the industry will sell about 500,000 gas-electric vehicles this year, accounting for about 3.5% of U.S. auto sales.
People who have purchased an electric car “most often cite environmental friendliness as the most important benefit,” according to the study, which the J.D. Power research firm plans to conduct annually.
Almost one-half -- 44% -- of EV owners ranked low emissions compared with gasoline vehicles as the top benefit of their vehicle.
But for people who are considering buying an EV, just 11% cite environmental concerns as their top reason while 45% list saving money on fuel.
The study found the savings could be significant.
“EV owners report an average monthly increase in their utility bill of just $18 to recharge their vehicle’s battery — which is significantly less than the $147 that they would typically pay for gasoline during the same period of time,” the study said.
The problem, said Neal Oddes, senior director of the green practice at J.D. Power, is that there “still is a disconnect between the reality of the cost of an EV and the cost savings that consumers want to achieve.”
A battery-powered all-electric vehicle will cost about $10,000 more than a similar gasoline-powered vehicle, he said. Based on annual fuel savings, it would take an average of 6.5 years to recoup that money.
“The payback period is longer than most consumers keep their vehicle,” Oddes said. “The bottom line is that the price has to come down, which requires a technological quantum leap to reduce the battery price.”