No Million by 2015, but Electric Vehicles Are Surging

on August 07, 2014 at 12:00 PM

California Gov. Brown Holds Press Conf. On Expansion Of Electric Vehicle Market

Quiz time. Which of the following two statements is true:

  • Electric vehicle sales in the United States are growing at a remarkably fast rate.
  • Electric vehicle sales are a small fraction of what many advocates had been hoping for just a few short years ago. 

OK, maybe you sniffed out the gambit – both are true.

The EV-promoting Electric Drive Transportation Association reported this week that the number of plug-in electric vehicles on U.S. roads nearly doubled in the past year – from 119,404 in July 2013 to 234,023 at last month.

And yet even with that 96 percent surge, plug-ins are on track to fall far short of the 1 million goal announced by President Obama in his State of the Union address in 2011 (a goal that, admittedly, the administration began backing away from in early 2013).

In a way, plug-in electrics are experiencing the fate of any paradigm-shifting, energy-related technology. Look at solar power. It’s growing at breakneck speed – in the 18 months up to April 1, cumulative PV capacity more than doubled in the United States, rising from 5,999 megawatts to 13,395 MW – yet solar remained a bit player in the electricity market, struggling to account for even 1 percent of total generation.

Plug-ins, even with their high rate of growth, account for less than one-tenth of 1 percent of the 253 million cars and trucks on U.S. roads. But advocates for electric vehicles are hardly daunted.

“I come from a perspective that we’ve been doing things the same way for 100 years,” Luke Tonachel, senior analyst and director for vehicles and fuels at the Natural Resources Defense Council, said in an interview. “Against that reality, we’re on the right road.”

Tonachel said consumers are beginning to understand what electric vehicles have to offer – more virtuous driving, sure, but cheaper driving as well.

Congressional Budget Office analysts last year reported that “at current vehicle and energy prices, the lifetime costs to consumers of an electric vehicle are generally higher than those of a conventional vehicle of similar size and performance, even with the [federal] tax credits, which can be as much as $7,500 per vehicle.” But Tonachel said that with high gasoline prices and additional incentives from all but a couple of states, the picture is shifting.

Plus, manufacturers are offering their own incentives to make electrics more competitive than earlier analysis might suggest. Tesla got the ball rolling with its free, proprietary Supercharger network, up to 104 stations in the United States. And now Nissan is offering two years of free charging with new Leaf purchases or leases through its “No Charge to Charge” promotion.

“Consumers are beginning to see the benefits that electric vehicles can offer – they want to take advantage of the cost savings,” Tonachel said.

There is some evidence that EVs are performing better than might reasonably have been expected. A May 2014 report from IHS noted that electrics are doing better at a comparable stage of their development than hybrids were. The firm said the Toyota Prius had cumulative sales of 52,000 in its fourth year, while the all-electric Leaf – aided of course, by government incentives that the Prius didn’t enjoy – was near 100,000 last year, its fourth year since introduction.

“With EV adoption exceeding the historical precedent of hybrids, this means that the trend toward EVs is still progressing,” IHS analyst Ben Scott said when the report was released, “although at a slower rate than many had expected.”

Slower than President Obama expected – yet Tonachel said setting that lofty goal still served a purpose. He noted that when Obama began talking about getting 1 million EVs on the road by 2015, there were only two EVs for sale in the U.S. market. Now the field is nearing 20. “That shows how targets can help spark ingenuity and innovation,” Tonachel said.