All of a Sudden, There Aren’t Enough Electric Cars to Keep Up with Demand
Electric vehicles like the Nissan Leaf and Honda Fit EV used to languish on dealership lots for months. A pricing war with aggressive incentives and cheap lease deals has changed all that. Last year, Nissan sold about half the number of Leafs it had anticipated<http://business.time.com/2012/09/07/is-it-time-to-declare-the-nissan-leaf-a-flop/>, marking two years in a row of disappointing sales for the electric car pioneer. One of the factors holding the Leaf back from appealing to the masses<http://business.time.com/2013/01/29/what-would-make-an-all-electric-car-appeal-to-the-masses/>has been the upfront price premium drivers have had to pay for the cars, when compared with similar vehicles that run on plain old gas. But in early 2013, Nissan tried to cut the knees out from this part of the anti-EV argument. The automaker dropped base prices on the Leaf by $6,400<http://business.time.com/2013/01/17/at-under-19k-for-a-nissan-leaf-does-the-math-on-electric-cars-finally-add-up/>for the new model, making the idea of buying an electric car for under $19,000 a reality, when state and federal incentives are factored in. And once lease deals, tax credits, and gas savings are considered in the equation, word has spread this spring that it’s basically possible to drive an EV for next to nothing<http://business.time.com/2013/05/24/drive-for-free-deals-on-electric-cars-keep-on-coming/> . Nissan’s EV competitors have followed with compelling deals of their own, including $199-per-month lease specials for the Chevy Spark EV and Fiat 500e. Mitsubishi and Toyota <http://topics.time.com/toyota/> have also dropped prices dramatically for EV models. As CNET pointed out<http://reviews.cnet.com/8301-13746_7-57586778-48/honda-heats-up-ev-battle-with-reduced-lease-price/>, the Honda Fit EV might be the best offer of all: a three-year lease for $259 per month, with no money down, unlimited miles, a 240-EV home charging station, and auto insurance included. Honda’s previous lease deal was $389 per month<http://business.time.com/2012/06/08/it-costs-a-lot-of-money-to-save-on-gas-with-a-118-mpg-car/>, a price point that failed to get consumers<http://topics.time.com/consumers/>excited. (*MORE:* Tesla Beat the Odds — And the Haters — But Now Comes the Hard Part<http://business.time.com/2013/05/10/tesla-beats-the-odds-and-the-haters-but-now-comes-the-hard-part/> ) But within days of Honda dropping the special lease price by $130 in early June, dealerships in California <http://topics.time.com/california/> were sold out and customers had to compete to get on the waiting list for more, per the *Los Angeles Times*<http://www.latimes.com/business/autos/la-fi-hy-autos-electric-cars-sold-out-20130605,0,1186526,full.story> : “It’s incredible, especially since we haven’t had any foot traffic or interest in the car in six months,” said Jeff Fletcher, sales manager at Honda of Santa Monica. “I’m not even sure we’ll have enough cars for the people on the waiting list.” Last week, Honda issued an apology<http://www.honda.com/newsandviews/article.aspx?id=7243-en>for not having Fit EVs available, and promised more were on the way. “We recognize that some customers have experienced frustration as they attempt to locate dealers with available Fit EVs,” reads a statement from Steve Center, Honda’s environmental business development vice president. “We sincerely apologize for this – though it should be only a temporary inconvenience. The good news is that more Fit EV’s are on their way to dealer showrooms.” Low-price deals have also given the Nissan Leaf a boost this year, tripling sales of the vehicle<http://www.csmonitor.com/Business/In-Gear/2013/0603/Nissan-Leaf-beats-Chevy-Volt-in-May-sales?nav=91-csm_category-secBlogs>in the first five months of 2013, compared to the same period last year. Meanwhile, sales of the Chevy Volt—the gas plug-in hybrid that doubled the Leaf in sales in 2012—have been fairly flat thus far in 2013. Unsurprisingly, last week Chevrolet entered into the electric car price wars with a $5,000 cash back incentive<http://news.cnet.com/8301-11386_3-57589046-76/electric-car-price-war-chevy-chimes-in-with-volt-incentives/> . (*MORE:* What Would Make an All-Electric Vehicle Appeal to the Masses?<http://business.time.com/2013/01/29/what-would-make-an-all-electric-car-appeal-to-the-masses/> ) Naturally, all of these deals will help automakers sell some cars. But are these aggressive incentives good for business? At this early stage of the EV marketplace, automakers appear be to focused on getting consumers to want these cars. Dropping prices in such dramatic fashion will certainly drive up interest. What’s unclear, however, is the extent to which the automakers truly want to sell large quantities of these vehicles at cut-rate prices. Earlier this year, Chrysler CEO said that his company, which owns Fiat, will lose roughly $10,000 for each Fiat 500e sold, according to the Associated Press<http://www.indystar.com/viewart/20130530/BUSINESS/305300072/Carmakers-offer-cheap-leases-promote-electric-vehicles> . While Honda says that more Fit EVs are on the way, the automaker doesn’t seem particularly interested in selling the vehicle by the tens of thousands—not yet anyway. For the time being, Honda is sticking with a plan to sell a maximum of just 1,100 Fit EVs in the U.S. As the LA Times<http://www.latimes.com/business/la-fi-honda-apology-20130615,0,7606747.story>put it, “there is little financial incentive to increase production” on the Fit EV because Honda loses money on each of the cars it builds. The goal, it seems, is to drive up interest in EVs with price breaks and limited supply—and then hope that interest remains high even when automakers raise prices down the line. Hopefully, these vehicles will soon see improvements in driving range in the near future — most can be driven only for about 75 to 80 miles before they need a recharge — which would make them more practical and help boost interest further. (*MORE:* Caveat Sharer: Legal Problems for Car Sharing and Airbnb<http://www.time.com/time/magazine/article/0,9171,2145487,00.html> ) While all of the lease deals and price slashing is obviously intended to woo potential new buyers, one *Automotive News* columnist<http://www.autonews.com/article/20130603/BLOG06/130609983/1448#axzz2VFn91Ssg>writes that all of the recent wheeling and dealing may wind up inadvertently angering the early adopters who believed in the technology first and may now feel foolish for paying top dollar: If I bought, say, a Nissan Leaf, it’s bad enough that my EV’s resale value is much lower than that of a hybrid. But if I paid full price for it in February, before it was discounted 18 percent, I’m feeling stupid. And I’m feeling that I have been played. Read more: http://business.time.com/2013/06/18/all-of-a-sudden-there-arent-enough-electric-cars-to-keep-up-with-demand/#ixzz2WcKCziFw and What Toyota Doesn’t Want You to Know About the Prius When the Toyota Prius was introduced to the market, its hybrid technology was nothing consumers had ever experienced before. Its compact styling and incredible fuel efficiency made it the perfect answer to rising fuel costs. Shortly after its introduction, the Toyota Prius found itself with increasing amounts of competition from manufacturers like Honda and Ford Motor Company. Although it seems to be the ideal answer to growing environmental concerns, there have been recent rashes of Toyota Prius problems that have left consumers weary of purchasing this green machine. The Prius is not alone though, as suspected from the moment they started to gain popularity, there are quite a few hybrid car problems facing consumers. Top Toyota Prius Problems While some model years have encountered issues involving the car’s battery and head lamps, the most concerning Toyota Prius problem revolves around the most recent recall. In 2010, amidst Toyota’s plight with many models experiencing acceleration issues, the Prius was recalled for potential software problems that interfered with the vehicle’s anti-lock braking system. The recall was issued after many owners reported an inconsistent braking pattern in the Toyota Prius. The issue was remedied by creating a Toyota Prius install upgrade to the software. This particular recall affected 133,000 2010 model Prius cars. In the same year, the Japanese auto maker also recalled 650,000 Prius cars that were made between 2004 and 2007 to repair water pumps that may have been leaking air bubbles into the car’s cooling system. This often caused a Toyota Prius error code to surface during inspections. Honda Civic Hybrid Problems The Honda Civic Hybrid has been a popular choice among environmentally conscious consumers and those wishing to reduce their fuel consumption. Although not as prevalent as the issues regarding the Toyota Prius, there have been some Honda Civic Hybrid problems that have resulted in recall. The 2007 models were recalled for issues regarding faulty DC to DC converters and the 2006-2008 Honda Civic Hybrids suffered a software issue that may have possibly led to potential battery life shortening. Other Hybrid Car Problems Due to their incorporation of conventional internal combustion engines and electric battery technology, there have been many hybrid car problems since their introduction. Most issues revolve around the car’s battery or electrical system, which could be explained by substandard technologies. Additionally, these cars are much lighter and do not rate well in crash test ratings. The general consensus among car buying advisors is to wait until these technologies are further improved. While incredibly fuel efficient, there are some common and concerning Toyota Prius problems that consumers should make themselves aware of. It is generally thought that these hybrid car problems will be remedied with time and advancements in hybrid electric technology. http://www.consumer-car-reviews.com/prius-problems/?utm_source=outbrain&utm_medium=cpc&utm_campaign=cars -- *Cecile * Cecile Lawrence, Ph.D., J.D. For more information about sustainability in the Tompkins County area, please visit: http://www.sustainabletompkins.org/ If you have questions about this list please contact the list manager, Tom Shelley, at [email protected].
