Cost & Fear Are Holding Back Sales of Plug-In Electric Cars

3 months ago by Steven Loveday 52

Can the Chrysler Pacifica Hybrid alleviate consumer's fears about plug-in electric cars?

Can the Chrysler Pacifica Hybrid alleviate consumer’s fears about plug-in electric cars?

As we recently reported, the Chevrolet Volt and the Chrysler Pacifica Hybrid made the Wards 10 Best Engines list this year. Wards was very impressed with the “green cars”, mostly due to outstanding performance, paired with efficiency. In the mix of the Ward’s testing this year were eleven electrified vehicles. Wards believes that cost – and moreover “fear” – are deterring sales of plug-in electric cars.

If Chevrolet Volt recent sales success even partly transfers to the Chevrolet Bolt EV, it will be a substantial step forward for EVs

If recent Chevrolet Volt sales success even partly transfers to the Chevrolet Bolt EV, it will mark a substantial step forward for EVs

This recognition from Wards is all good news, however, of the eleven tested, only three were picked. Two of these were plug-in electric cars (Volt and Pacifica) and one was a traditional hybrid (Honda Accord Hybrid). There was no fully-electric winner, but that makes sense, as only one was tested and very few even exist. The fourth “green” car to take a top spot, the Hyundai Elantra Eco, is not electrified at all.

Wards noted that the BMW 330e PHEV nearly made it in the top ten, and the Hyundai Ioniq EV received much positive mention, including excellent regenerative braking.

Despite low sales, when compared to traditional ICE vehicles, Wards noted that plug-in hybrid electric cars (data not including BEVs) are up 58.7% as of November this year, while traditional hybrids are off more than 10%.  Nearly all of the spike in sales is attributed to the new 2nd generation Volt’s 58.5% sales leap over an older model.

The outfit notes that the 20,000-ish Volt sales still pales in comparison to Chevrolet Cruze sales, which are approaching 200K, but at the same time it seems that consumers have figured out that non plug-in hybrids are really not worthy, since for example the Honda Accord has sold over 300,000 Accords copies, only 6,000 of which have been hybrids.

Nonetheless, historically consumers have proved more apprehensive about buying vehicles that they need to plug in. Chrysler does not refer to its new Pacifica as a PHEV, but rather coined it a hybrid. It will be interesting to see if that makes a difference in the current market, especially when realizing the Accord Hybrid sales as mentioned above.

The Pacifica Hybrid hasn’t been on the market long enough to make any impact. It is reasonably-priced, and practically a steal when considering the $7,500 rebate (MSRP of $41,995 – details, or effectively $34,495 after rebate). According to Wards, price may be a deterring factor, and more so in the past, but with amazing lease deals, and competitive prices like that of the new Pacifica, fear seems to still steer consumers.

There’s no doubt that we live in a “plug-in, battery-operated, wireless” world. People just need to realize that with cars it is no different. Hopefully, the Volt will continue to push record sales, paving the way for the Chevrolet Bolt EV to find marked success, and the Pacifica will prove a major turning point for mass adoption of PHEVs.

Source: Wards Auto

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52 responses to "Cost & Fear Are Holding Back Sales of Plug-In Electric Cars"

  1. OKSoda says:

    Maybe if they would actually advertise EVs and PHEVs outside of CARB states, there would be more interest. I have never seen an ad for any EV or PHEV in MN. There is definitely interest, people here just don’t know about them.

  2. Trollnonymous says:

    It’s cost that accounts for most of the holding back.

    When you put the Bolt and Model ≡ up and say they are the first “Affordable EV’s” and they are priced at $37500.00 when most of the general public considers an affordable car one of the Civics, Cruze, Sentra, Corolla, Mazda 3 or Focus then they all say he|| no they can’t afford one.

    1. Hauer says:

      Except that I TCOed a Model 3/Model S60 hybrid vs. a Volvo V40 (Focus Based with Volvo engine…) and in the long range (10 years) the Tesla is cheaper.

      But that might be too much to expect from consumers looking for 99,00 leases.

      1. Trollnonymous says:

        You’re preaching to the choir.

        I’ve already mentioned to all of them who inquire about EV/PHEV that they need to look at what they won’t need to do with an EV/PHEV.
        No Oil change
        No oil filter change
        No (or minimal with PHEV) gas
        No Smog (PHEV in CA get’s smogged after 5th year)
        No intake Air filter change
        etc….

        Even helping them calculate that, they can’t get over the sticker shock.
        I won’t lie to them. They will need a faster EVSE than the silly trickle charger PHEV’s come with and some EV. Even a 24A EVSE clipper creek will require a front end cost of ~$400. They will also need another 30A line pulled for them in the garage as they never want to share the dryer plug. That’s another $400 to $1K depending on the run.

        Explaining the rebates for Fed and here in CA sometimes nulls the sting but once they learn nothing is taken off at the point of purchase, they just say forget it.

        1. SJC says:

          You still have to change oil with a PHEV.
          The Pacifica PHEV would cost $32,500 in California after tax credits compared to a higher price for a Toyota Sequoia with three row seating.
          It is the increased price over a base model Pacifica that stops some.

          1. On my Volts, I change oil every two years because it gets old. The Chevy oil life indicator keeps track of every time the engine turns on. Since the oil is synthetic and the engine rarely turns on, it needs to be changed about every 24,000 to 36,000 miles.

    2. David Murray says:

      That’s certainly true for a lot of people. But considering you can buy a used Chevy Volt or Nissan Leaf for $10,000 there really is no excuse. In fact, the reason you can buy one that cheap is due to lack of demand and fear that something will go wrong with these used EVs.

      1. MikeG says:

        Unfortunately, a lot of people in the market for these sub-$10000 EVs are apartment and condo dwellers who lack charging infrastructure.

      2. Glenn says:

        My son is all in on getting a used Volt. My 2013 Volt has been rock solid and at current prices a used Volt can be an incredible value, especially for someone who doesn’t make enough to take full advantage of the tax credit.

    3. PlugsT says:

      “The average” price of a vehicle in the US is now $34,000. So $37,500 is average. The reason why that average is so high is because of all the morons willing to pay $50-60K for a loaded SUV or fancy truck.

      Yet these same people hesitate and question the validity of a $37K 240mile+ EV?

      1. zzzzzzzzzz says:

        It is average vehicle, but average car, not SUV/truck is some $24k-25k.
        Think about something popular like Camry, that costs about it and is bigger inside, 103 q. feet vs 95 q. feet for Bolt. A bit smaller cars like 98 q. feet Corolla are sold under $20k.

        While Bolt is great and huge step towards mass market compared to 100 mile Leaf type cars or $100k overweight vanity vehicles, it is not exactly competitive in mass market yet. Sorry but fuel savings do not count when qualifying your debt-to-income ratio for auto loan or lease payment, even if you have access to cheap electricity at home.

  3. David Murray says:

    Ignorance is usually the cause of fear. And ignorance is the biggest reason I can think of that EVs and PHEVs aren’t selling better. Most people still don’t understand how they work, or that they even exist.

    1. Trollnonymous says:

      Correct, most do not understand how they (PHEV) work but, I have encountered peeps who don’t really care how they work. They just know it will reduce their consumption of the OPEC juice significantly.
      Then they see the price and they say……WTF?!?!?!?

      1. jimijonjack says:

        Two power trains are More money in the beginning, Double Maintainance & Double Trouble ..More things to go wrong & Break Down the road… N0 THANKS!

        1. Dr. Miguelito Loveless says:

          Except one drivetrain rarely runs so it rarely breaks down, and the other has few moving parts so it rarely breaks down.

          Don’t see a problem.

          1. jimijonjack says:

            Maybe alright Dr.ML & you may be Correct , but it’s not for me ,I want Pure Electric or nothing~.

  4. Rhodomel says:

    Make the incentives instant rebates at the point of sale rather than having to apply it as tax credits. In California, you could have deducted $9,000 to $10,000 off the price of the plug-in cars and would be able to compare it better to equivalent gasoline cars. That $10,000 price that you cannot deduct right away means that your monthly payments are $190/month higher than the equivalent ICE cars even though you have the rebates coming. Moreover, the federal tax credits would only favor those with higher incomes whose taxes are over $7,500.

    1. mx says:

      For the Volt, if you lease, the Federal Tax Credit comes off the lease cost, and you get the Full Credit at time of sale.

      You just have to be comfortable leasing the car for 3 years. At the end of the lease you should get the offer to buy.

      1. Rich says:

        This assumes GM will actually credit the full federal tax credit to the cap cost. Can someone who’s leased a Volt confirm this and which State they leased in.

    2. PlugsT says:

      What the government should do is just give the money to the dealers and the dealers can simply sell the cars for that much less.

      There really is no point giving it to the consumer. The automakers should be incentivized to sell more alternative energy vehicles.

      This is the same principle as pushing for more fuel efficient ICEs or incentives and subsidies given to oil and gas giants….as if they’ve not been helped…far more so…and all behind our backs.

  5. Ford Prefect says:

    I’m not an FCA fan, but maybe they are on to something by eliminating the “plug-in” portion when marketing the Pacifica Hybrid.

    It would be interesting to see what would happen to sales if Lexus added a plug to all of its hybrids and didn’t change the name.

  6. DJ says:

    To be fair more that 50% of people in the US can’t take full advantage of the 7,500 federal tax rebate.

    I don’t know if I totally buy the whole fear thing but I can definitely support the cost factor.

  7. AlphaEdge says:

    Why did the US government do a tax rebate? Why did they not do a point of sale rebate? Any negatives on that?

    Even with the full rebate, the cost factor is still quite substantial! Here in BC, Canada, the rebate is $5,000 at point of sale, and the new Bolt will still be the cost equivalent of buying two Corolla’s!

    1. Pushmi-Pullyu says:

      One negative on that, for car buyers, is that you have to pay at least that to get the full rebate, you have to pay at least that much in Federal income tax. I seem to recall that at least one of the InsideEVs staff said he wouldn’t qualify for the full amount.

      Another negative is that you have to wait for your tax refund to get the rebate. That could be up to a full year.

      Yeah, getting the rebate at time of sale, regardless of how much or how little you pay in taxes, certainly would have been a stronger incentive. But that would also likely have been harder to “sell” to Congress, so perhaps we shouldn’t complain about what we got. As they say: “A bird in the hand is worth two in the bush.”

      1. AlphaEdge says:

        It’s, what is the negatives on a point of sale rebate? Dealer somehow messing with it, in that the dealer keeps the MSRP, instead of offering any price discounts. That’s why I don’t understand why the US gov’t went with the tax rebate, and it’s obvious negatives.

        1. DJ says:

          Perhaps so that those who don’t pay their fair share of taxes don’t get even more stuff for free. I actually applaud it 🙂

          While it doesn’t necessarily help push EV adoption if you are one that contributes a lot more in federal taxes than half the US population it is hard to think awwww that sucks for them. They can go out and buy the off lease Leafs 🙂

        2. Nix says:

          The reason why the US Congress decided on a federal tax rebate instead of a point of sale program is two fold:

          1) No new administrative group to approve/review Point of Sale rebates. All of the enactment/enforcement is through the exiting IRS agency.

          2) The Federal Gov’t has a policy against “unfunded mandates” that would impact states. A Point of Sale rebate would reduce the sale price, and cut into the amount of sales taxes each state can collect. That counts as an “unfunded mandate” on the states, because it would cut their revenue without replacing that funding.

          It is the nature of US politics, and frankly we’re lucky to have any federal tax incentive at all at this point, and going into the future.

          1. AlphaEdge says:

            Thanks for that Nix. That makes sense.

            In Canada, we have the provinces offering the direct rebate, which of course cuts into Federal taxes on the final price, but our Federal gov’t does not provide a rebate of any kind.

            I think in the States, and Canada, it would be great if you had a partnership between state/provincial and Federal gov’t offering the rebate. After all, it’s in both of their interests to promote the sale of EV’s from an energy security perspective, clean air, etc.

            1. Actually, in Ontario, the place with the most generous rebates, in Canada – anyway, even up to $14,000, they are taken off the price of the car (& options) MSRP, but only are subtracted Post adding Tax, unlike a deposit, down payment, or trade in, which I believe, are credited pre tax.

              Plus, the maximum, is 33% of the MSRP, SO, you may need to get a Premium or High Option model to get the max rebate! Also, if your cars MSRP is $75,000 to $150,000, your max rebate drops to just $3,000 now! Worse, go over the $150,000, and you get Nothing!

              On that last part, I see that aspect (since that was changed this year, from an across the board $8,500 max rebate, that covered all plug in cars, regardless of price!), was just a response to the ‘Winers’, complaing it only helped the “Rich”, forgetting (or ignoring) that the lowly smart ED got that same full $8,500 rebate as a Tesla or even the more expensive Porsche Panamarra PHEV! (Sp?)

              Personally, I think all these rebates could do better! Remember the “Cash for Clunkers” programs, in those, you had to take off the road some ‘Old, Polluting Vehicle’ to get the rebate!

              If that program was combined with these EV programs, with these adjustments:

              To get the Full EV credits or Rebates, you had to trade in (and remove off the road) a car that was at least 7 years old, but if it was over 12 years old, you also got a side bonus of the Full cost of an EVSE Level 2 installation at Home;

              Plus, if your Income was below what would basically qualify you for a new EV/PHEV of $45,000 MSRP (At most), you could qualify for an Extra Rebate or Credit, of up to 10% of the cars list, (if, for example, you had a very low income of which might qualify you only for a loan of up to $20,000), (a rebate or credit of $4,500 in this new car example), so long as you installed a Level 2 EVSE at home, with a separate meter, that showed it was actually used.

              Second, like Colorado, maybe offering Credits or Rebates for *First Time EV Buyers* as a Second Owner of EV’s (Used by ONE owner or End User, before), of the new adjusted ‘For Sale’ price of the used EV; as in: Sale Price Now / Original Sale Price X Original New Car Rebate or Credits. So, if current price is 50% of new, you get 50% of the credit of a new one on this used EV; if current price is 30% of new, you get 30%, etc! All to encourage New EV/PHEV Buyers to get on board.

              Even these ‘Second Use’ EV Credits or Rebates, should, I think, be tied to the ‘Cash for Clunkers’ program, to be fair.

              While I kind of skipped the benefit of adding a used EV as a second EV car in one household, it might be good to adjust this a bit, such that: If you bought a new EV with Full Credit or Rebate (Including Lower Income Bonuses), and you bought a Second one, that was a Used one, the 2nd one must be a Full EV to qualify for the used EV credit/rebate!

              It might also be useful to tie a benefit of the Used EV Credits or Rebates programs to those who would not qualify for 90%-100% of the Full New EV Credits, and who had a pre taxable income, or income before any other deductions or credits, of under something like $100,000, since there are some people with high incomes that expense and deduct a lot, to get a net taxable income so low, it would have nothing left to tax!

              Further, for those who can install a Roof or Pole Mount Solar Array with a rating = to your annual average daily electric energy use, but get an EV/PHEV, there could be a further Credit or Rebate, equal to a flat amount of $1,000 for a PHEV, and $2,000 for a BEV! Example: Daily Average use for the year = 15 kWh, your location has an annual Solar Insolation (receives x hours of average usable sunlight) of 3 Hours a Day, a 5 kW Solay Array would let you qualify; but, if your Annual Daily Use Average is 30 kWh, you need to install a 10 kWh Array to qualify!

              Enhanced: this could be adjusted, by the addition of an in home Energy Storage unit, such that if you use 30 kWh per day, but install a 15 kWh Battery, you could also qualify if you put in a 5 kWh Array!

              As to communications for these rebates or credits, every year the final Tax Assessment could include a page or two with the highlights and a url link to the full details: a trackable ‘landing page’, if you will! An extra $500 credit for anyone who goes to the link, completes the reading, & registers!

              If they really wanted to make sure people understand, they could add Videos, Whiteboard Video Explanations, and Chat options; all followed up with a Survey/Quiz!

              You must view the url within 90 days of the final assessment, and You get to take the Quiz up to 3 times before you leave the web site, to pass and qualify for the rebate/credit!

              Sorry for the long post, and any missed typo’s! On my phone for this comment!

              1. Jay Cole says:

                On your phone? I award 2 IEV bonus points for that.

                Sidenote: Hate to be “that guy” but I figured I should mention the rebate caps at 30% of MSRP…not 33%, (=

                I only (annoyingly) mention that because as most EV are leased (especially in Ontario), that extra 3% actually works out to around 9-10% of the monthly payment (depending on the residual maths).

                “Purchase incentives are not to exceed 30% of MSRP. The incentive value will be calculated on the MSRP on the date of the purchase or lease.”

  8. GrokGrok says:

    Besides cost and lack of familiarity/misconceptions (as opposed to ‘fear’), the major factor is lack of plug in options across all vehicle types (and/or in non-CARB states). You can’t buy what’s not available. The Bolt and Pacifica are good starts, but plugs need to be attached to far more types of affordable vehicles (like CUVs and SUVs) in order for overall vehicle sales percentages to grow substantially.

  9. DNAinaGoodWay says:

    There’s also a kind of inertia involved here. If gas prices were soaring, people would be more likely to want to learn a new paradigm. As it is, people are content to continue with the cars they understand and are comfortable with.

    1. Gas prices increasing rapidly cause more interest in EV’s than if they rise slowly, even if they rise the same amount, as witnessed by the flow of interest in a EV Conversion Manual sold by the EV Socierty in Canada!

      Also, I notice lots of EV Centric Websites, but nearly Zero EV Magazines on News Stands, Magazine Racks, and relatively few EV Events/Cruise Nights, etc.

      Even EV charging stations (without a website or App) are hard to find and easily missed!

      What if, at each charging station there was a info board, that included a Printed Map (let’s say, of the USA/Canada), that showed where the current EV Charging Station Was (with a ‘You are Here’ Arrow), and with markers or pins, where the other stations where?

      Or, if not a whole National Map, then at least the state or county, and a zoom of the 10-20 miles around showing other EV charging stations!

      It could/should include URL’s for sites like plugshare, chargepoint, IRS & State EV Credits, etc with related info.
      Also, EV Charging Etiquette, Towing Bylaws or state laws, etc.

      EVSE installers, Electricians, and Businesses, also need more and better education on EV’s, and the need for good communications, as well!

  10. Pushmi-Pullyu says:

    I wish the article had explained exactly what this “fear” is. My guess is that it’s that car buyers are naturally conservative when it comes to spending all that money, and will be hesitant to spend it on a technology which is perceived as new and not well developed. If so, that is being rational and showing common sense, so I’m not sure that “fear” is an accurate label.

    Much as I want to see gasmobiles made obsolete as soon as possible, I wouldn’t claim that EV tech is all that well developed. There’s clearly much room for improvement, and each new generation of production EVs shows just how much room for improvement there is.

  11. speculawyer says:

    “Chrysler does not refer to its new Pacifica as a PHEV, but rather coined it a hybrid.”

    Oh great, that’s just what we need . . . instead of educating consumers you are determined to confuse them. Ugh, Fiat/Chrysler, you suck.

  12. ffbj says:

    Fear? Yes, the fear of dealerships and manufacturers that the ev will kill the golden goose of the ice.

    1. PlugsT says:

      Their fear stems from stupidity and sheer ignorance. I don’t understand how they can not see huge profits that would come from selling EVs in the long run.

      Any dealer or automaker that truly champions this movement starting today will be so far ahead of everyone else come the next 10-20 years that everyone else will look like they are standing still.

  13. Nix says:

    Humans are herd animals (well, “clan” animals to be pedantic”)

    Humans tend to do things only after other people do them first. People will buy more PHEV’s and EV’s when they personally know people who have PHEV’s and EV’s.

    1. Mister G says:

      Don’t know about that, I’ve had a 2012 Leaf, returned in 2015, now lease a 2016 Leaf and I don’t know of one friend or family member that transitioned to EV, not one. Humans don’t give a crap about pollution unless it slaps them in their fat face.

  14. PlugsT says:

    There is no doubt in my mind that automakers and dealers have little to no interest in promoting alternative energy vehicles. Not because there isn’t any profit in them. There is and if they claim there isn’t, they are lying through their teeth.

    The problem for them is the profit margin is just less. It’s more than enough but just not enough to satisfy their greed.

    Couple that with the oil company lobbying and government backed wars that perpetuate the entire use of crappy inefficient products like ICEs, you have industries that have no incentive or drive or desire to do what is right for not just others but also for themselves in the mid-to-long term.

    The near sighted greed and money hungry behavior of these industries doesn’t go well with innovation and visionary mentality required to advance us.

  15. Ian says:

    Dealers don’t know how to sell EVs. Just drive into any dealer and talk to them. Mostly uneducated in new EVs and not smart enough to go online and learn on their own. (There are a few exceptions).

    How about the same 0% financing everyone buying a truck gets.

    1. speculawyer says:

      They could figure it out if they wanted to . . . the problem is they don’t WANT to sell EVs. The profit margin on the EVs is smaller than the profit margin on the ICE cars.

      That is not something we can fix other than by continuing to reduce the cost.

      1. zzzzzzzzzz says:

        Of course you can fix it by reducing cost (of production to automaker). More profit, more features making car popular, more incentive to sell, less time for salesmen to waste with each buyer selling mass market car everybody knows without explanations. Isn’t that simple?
        The issue is that you can’t reduce manufacturing cost and keep range in hundreds of miles, and charging time 15 minutes with today’s battery tech overnight.

  16. How about this: many EV owners, that onstalled Level 2 Charging Stations at Home, are reluctant to ‘Share’ that spot, on http://www.plugshare.com, and even some that do, forget to put their phone number in the listing, so a person can call them, either to use the spot, or to even talk about their EV experience!

    Compare the number of sales of US Plug in vehicles as listed by this website, and the much smaller number of ‘Shared’ charging spots on PlugShare!

    So, even EV drivers, seem to want to keep secret that EV’s are as good as they are!

  17. Ocean Railroader says:

    What’s holding me back from buying a EV right now is that the one’s I could possibly afford have extreamly low range.

    The fear I have of buying a low range EV right now is that I could easily end up changing jobs the day after I buy the EV. And the new job is to far away for the range of the EV.

  18. Mister G says:

    GIVE A HOOT DON’T POLLUTE DRIVE AN EV TODAY

  19. speculawyer says:

    I think ignorance and stubbornness are also a factor.

    You know there are people out there that will refuse to buy an EV simply for blind-faith political ideological reasons.

  20. Raialfan says:

    I will not be getting an EV nor a PHEV, do to the higher the monthly payments. I understand the overall cost savings over the life of the vehicle, but that does not help me on those monthly costs. I am retired and on a fixed income and those payments would be above what I could afford according to my budget.
    In my case, I currently have a lease on a ICE vehicle of $208.00 per month. Add to that the cost of fuel ($130.00 to $180.00) per month, and that total is still well below what my monthly payments would be for a new EV/PHEV. Leasing could be still an option, but even then, I don’t think I could get a lease for $208.00 a month.
    Buying used? I am leary of battery longevity, loss of performance levels over time, and the associated costs of replacing said battery. I typically keep a vehicle I buy for at least eight years or more. How would an EV/PHEV perform after 6+ years of payments on a two or three year old used (oops excuse me, a preowned) vehcile?

    1. Mister G says:

      Hey you do know that you can’t take your money with you when you die? LOL…GIVE A HOOT DON’T POLLUTE…future generations will appreciate your sacrifice of paying a little more to pollute less.

  21. Railfan says:

    Can’t take what you don’t really have.

  22. Robert says:

    Prce, poor resale value, and range anxiety are contributing factors to achieving higher sales numbers. However, owning a Honda Civic Hybrid and replacing 3 hybrid batteries under warranty which would have cost me $3400 each time was a great concern, I can only imagine what the cost would be for a battery or electric drivetrain If replaced out of warranty. Chevy Volt system was quoted at $35,000. When I asked if Chevy offered a long term extended warranty on the battery and drivetrain, they laughed at me. The Bolt might be even more which religates both vehicles to a lease only option.

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