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Auto Exec Pessimistic on EV Industry
OCT 26 2012 BY LYLE DENNIS 20
The truth is, EV sales have started slowly and demand is not yet as great as some EV advocates have hoped. Most industry watchdogs and other firms have downgrade expectations of EV sales, such as the government’s hope of 1 million on the road by 2015.
Early this week an industry panel on EVs took place in New York City.
That panel included Delphi CEO Rodney O’Neal and several other industry leaders. O’Neal described consumer reaction to EVs as “carnage.” Borg Warner’s CEO Tim Manganello said EVs were “not ready for primetime.”
Both execs cited low ranges, battery reliability, lack of charging infrastructure and cost as major hindrances to adoption. Both believe EVs do not make financial sense for consumers or companies at this time.
These sentiments fit with what automakers are doing such as quietly rolling back projections, and recent events such as bankruptcy of battery supplier A123. Hearing these comments directly from the CEOs of the two largest auto suppliers in the world however does offer a stark reality.
Executives from Daimler and Volkswagen weren’t as blunt but also provided a cautionary tale. Jonathan Browning of VW America thinks consumer acceptance will remain poor, projecting EVs will keep to a small role only accounting for 3% of sales by 2018. Daimler chief Martin Jäger thinks the government needs to provide even more incentives beyond the current $7500 tax credit.
Even the hope that battery technology will eventually improve to increase both range and acceptance was not shared among these leaders. “I’m not as hopeful battery technology will get better,” said O’Neal.
Reference: Car and Driver
Categories: General
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20 Comments on "Auto Exec Pessimistic on EV Industry"
Pessimistic people think too much inside the box and probably should not be CEOs.
Wildly-optimistic CEOs either grow enormous companies or fail. Most commonplace CEOs live in a risk-avoidance world and lock-down creativity and failure from occuring within their organization. Just look at what happened at JPMorgan when they had one trader go outside the bounds of the box. Hurt pretty bad – but came back super-strong after that. JPMChase felt the “carnage” of the London Whale while trying to take extra risk that in many cases will fail but when it goes well, is enormously profitable.
Tesla, for example, is in that position. Either they will fail miserably or grow fantastically. Still hard to tell what is going to happen. But I have my popcorn and am watching it unfold.
Sound like a bunch of Debbie-downers to me.
I hear your argument (against the leaf) but respectfully disagree with it. Yes, it may in fact somewhat confuse consumers, but it’s what _I_ am going to buy. Some of us, granted enthusiasts, want a second car that uses no gas, ever. This is a quasi-niche market, likely populated by many of the types that were building their own EVs (in their minds, if not in practice).
Yet, just today, another one of my non-EVangelist friends arrived at work driving her new Leaf (which she got on the leaf). With a round trip of EXACTLY 73 miles to/from work, and a charging station in our parking lot (relatively forward looking Menlo Park, CA), it’s a great solution for her, even if she doesn’t give a damn about EVs. The volt… she would not have selected. Just sayin’.
The Leaf is a great car, but your point is a good one in that the CEOs seem to be referring to BEVs in regards to range with total disregard to PHEVs like the Chevy Volt. The PHEV will carry the first decade and the EVs ARE affordable IF you drive the miles!
http://insideevs.com/what-does-an-ev-really-cost/
Well, it could be 6-7 years ago and we would have to put up with executives saying that you can’t sell an electric vehicle at all.
/baby steps
its no wonder EVs are suffering and its due to misinformation and articles like these where the objections are so absolute. What the article fails to mention is long term TCO favors EVs over any other vehicle with the possible exception of the cheapest econo boxes.
What is also not mentioned is that nearly all current EV owners have not abandoned gas vehicles either but have found the gas powered cars filling much smaller than anticipated roles with an EV in the house when they realize just how little range they do need most of the time.
My LEAF over the last 23,000 miles has been $1300 cheaper than my 50 mpg Prius to drive. http://daveinolywa.blogspot.com/2012/10/gas-anxiety.html
Now, I cant get rid of the Prius but that does not change the fact that if I only had one car and one driving need, that with the $1300 I saved, i could have rented a pretty nice gasoline car for those rare times the LEAF did not work
It still amazes me that these people that should know better, can’t see what is happening. Just look at the cellphone development over last 20 years. I say the world in 2025 will be electric transport but the next 3 to 5 years will be the slow buildup. But we have to remember, the iphone is only 5 years old and so is Twitter. So there is just no way to know what fantastic products will be transforming our lives in the next 10 years. Whole industries could disappear and others take over.
Despite the enthusiasm of enthusiasts, EVs will have to compete in the marketplace against $15k cars that get 40+mpg.
There is plenty of oil or natural gas(methanol fuel per Shell ex-CEO) for ICE cars.
There is no reasonable expectation that batteries will improve like computers or cell phones.
Solar cells are stillexpensive and still have a low efficiency.
It’s all about the batteries – is the sweet spot a $20k EV with 150 mile range?
As a US national energy strategy, our nation could commit to a nuclear rebirth subsidized by royalties from coal, oil and natural gas. We could encourage the development of all the neglected nuclear technologies and underwrite the construction of new nuke plants and sell them to the highest qualified bidder(attempting to remove the fiscal risk and red tape and environmental snafus in the courts).
But will we?
Never, unless we get a serious government. Some day soon we will have to.
Peace be with you.
The fact is that for many drivers with certain usage patterns EVs make economic sense right now. Never mind any arguments about not sending money overseas to people who volunteer to get on our planes and crash them into buildings.
We are here because the Oil Industry Execs tell us we are at Peak Oil. So the question is not will there be EVs, the question is will America have an option to buy EVs from a domestic company or will we buy them the Asian producers?
As far as these auto industry suppliers go, I nominate them for the Watson Award.
“I think there is a world market for maybe five computers.” Thomas Watson, Chairman of IBM
I don’t see nearly 7000 plug-in cars sold last month as being slow. That’s pretty good. And the sales trend is pointing upward in a bit more steep upward graph. I keep telling people that EV sales “are not Apple”. You can’t release a product and sell a lot of them unless people are compelled to buy them. Since people think, many times, in terms of “monthly payment” only, they see cheap new cars as “better” than more economical, efficient more-expensive cars.
Almost every time I drive now, I see a Volt out there. 5-6 years ago, I might see 1 Prius on my daily drives. Now there are times when I will see 3 at an interesection at the same time.
Part of being hardcore green is living a “light tread” lifestyle. Green people might have low incomes, work in coffee shops and can’t buy new EV technology with the tips they make. But they love living “lightly”. Sometimes, you do find “rich green” people like James Cameron, Larry Hagman or other moviestars who have the money to go off-grid in their 6000 sq ft homes and drive EVs. However, I think the greens are a mixed bag, just like every market segment and many won’t be able to drive green until they buy used EVs or EREVs. Which they will go for once they are on the used-car market.
And, who is going to build the first EREV VW Bus? A lot of greenies still drive them around (and live in them) – pretty good gas mileage out of those, what, 50? horsepower engines? 🙂
It is partly a mind set that is stopping the masses. Continual education is required. If you drive the miles the math works. A very general statement is that the 15,000 mile driver will save $15,000 over the life of the warranty. So that would make your Leaf $3000 and your Volt $9000. So it is not the cost, it is the “perceived” cost which requires the continual education. Your 27 million’s monthly payment would be the same, but they can not get past the initial number, but that will change in time as people understand the savings.
For those of us who own one (or more), we pave the way for those to come. And for the 30% of us that power our own, we know “true energy independence”. $12 per month for 25 years and the price paid forward feels great every day.
So only time will fix this. Still at least 5-7 years away from the first million EVs. It gets here when it gets here. For now, every month brings more.
These executives are businessmen, and as such have a strong eye on the bottom line of what they are selling today. If they knew there was a new battery about to be released in the next few months they would be eager to say so, but longer than that they worry about current sales taking a nose-dive if customers decide to wait for the next big development. You will see this type deny the next generation battery is within sight until they are ready to sell it to you.
Who appointed these guys as experts anyway? I’m underwhelmed by anything Delphi and VW have done lately, and years ago I was a big VW fan, until they became hard to fix, overly complicated, unreliable, and burned excessive oil.