Report: Car Dealers Holding Back EV Sales In America
In 2008, current US Presidential Barack Obama set a very ambitious goal of selling 1 million plug-in vehicles in America by the end of this year (2015).
A quick check on our historical record of EV sales – the “Monthly Plug-In Scorecard” (which records every sale, of every plug-in vehicle in America), shows that almost 388,000 have been sold through this October; meaning that by year’s end, we could assign a best-case result of some 420,000 plug-ins sold in the US.
Using our super human deductive skills, we calculate this as only 42% of the original goal. Not so close.
For the most part, there are three obvious (and specific) reasons why the government’s goal fell so far short:
*- the DoE predicted 36,000 Fisker sales, which fell about 34,100 shy of hitting the mark
*- based on a price-point of “comfortably under $30,000” and some wild Bob Lutz projections, the DoE pegged 505,000 Chevrolet Volt sales – in reality a MSRP starting comfortably north of $40,000, followed by slow yearly MSRP reductions limited the Volt to just 84,666 through October 2015
*- a bad Japan/USD currency swap caused a 2nd year price hike in the then Japanese-built Nissan LEAF (instead of a planned reduction), which was followed by some shaky battery capacity/degradation issues in the summer of 2012, and a failure to deliver the “100 miles of range” initially expected by the public, which meant just 87,190 LEAFs have sold through October, the DoE projected 300,000
…now, the NY Times has suggested another reason why EV sales have disappointed some since the Obama proclamation. Car Dealers.
In a piece entitled “A Car Dealers Won’t Sell: It’s Electric“, maps out all the reservations held by traditional car dealers and their parent OEMs in selling plug-ins to the US consumer.
And it all starts from the top. Former chairman of the National Automobile Dealers Association (NADA), Forrest McConnell, famously made a speech stating that tougher fuel-economy regulations pushing plug-ins were making consumers eat broccoli when in reality they wanted “low-calories doughnuts”, by which he meant more fuel-efficient gas cars – kind of like what they (the dealers of America) were already selling.
Mary Nichols, chairwoman of the Air Resources Board, issued a rebuttal – “That would be interesting if it was true,” and Ms. Nichols went on to say that would-be customers have been dissuaded in part by uninterested dealers and “horror story” sales experiences.
The NY Times, sums up the problem as follows:
“Industry insiders and those who follow the business closely say that dealers may also be worrying about their bottom lines. They assert that electric vehicles do not offer dealers the same profits as gas-powered cars. They take more time to sell because of the explaining required, which hurts overall sales and commissions. Electric vehicles also may require less maintenance, undermining the biggest source of dealer profits — their service departments.”
From there, many current EV owners felt they were the ones doing the convincing of the dealers to sell them the product, as dealers tried to push them into conventional gas vehicles. The Times article points out many specific car buyer stories and survey results to support the theory that traditional car dealers are a big reason why plug-in vehicles aren’t more successful today.
For us, we have another data point to add to the NY Times story, that we feel better leads to the same conclusion that OEMs, dealers and their salespeople have played a big role in the acceptance of plug-in vehicles.
Despite a difficult launch of the Tesla Model S in the summer of 2012, a rising base MSRP (the short-lived, 40 kWh car started from $49,900 after incentives), and an all-electric Model X SUV that is ~2 years late in arriving, the company held to a belief that it should sell its own cars, and sell them with an unashamed passion for the technology.
For all the sales predictions made by the DoE back in 2008, only one will be met. Through October, Tesla has sold some ~56,500 Model S sedans in North America, on their way to selling more than 60,000 by the end of the year. As for the DoE? They predicted just 55,000 Tesla sedans would be sold.
Check out the full NY Times article, Hat tip to Lloyd!