Recently my colleague John Voelcker over at Green Car Reports wrote about why he and some fancy report thought that people will buy hybrid electric cars if more car companies offer electric cars and prices come down. Only then will we see that it’s not about being “seen.” Instead, it’s about trying to do the right thing, which is moving our transportation sector to an all-electric model.
People who buy new technology do that because they are early adopters. However, I can tell you that most of the electric cars that come out (except for the Tesla) have not been the sexiest. Does anyone remember the first generation Toyota Prius or the THINK City in 2001?
However, here is the thing:
I have worked with hundreds of early adopters of pure electric cars over the years. John’s story said that electric cars or plug-in hybrids do not recoup their initial upfront cost. However, most of these studies refer to only specific areas where you save, such as fuel costs. Yet when you include the brakes, the oil, the spark plugs, the engine or all the other complex aspects that cost money to maintain on an internal combustion vehicle, electric cars most of that initial upfront cost. I believe this is the way some car companies afford to build a hybrid, plug-in hybrid (PHEV) or electric car.
This happens to all new technologies. People buy electric cars, hybrids or PHEV’s because it’s more about doing the right thing and making a public statement than the product itself. Look at the bumper stickers on people’s hybrids. You can tell where they stand politically, not what they wish to think but what they do think.
Once car companies offer the free-market electric cars, consumers will want them. Currently, consumers can only pretty much get hybrids. With the exception of the Tesla and the Nissan Leaf (coming soon), there is limited market participation from other car companies to build electric cars. The free market usually does not prevail on electric cars. Price subsidies for oil vs electric…common – you know what I mean.
Batteries using lithium-ion technology from some of the best companies in America such as A123 Systems need bulk orders to compete with China. Controllers like those produced by AC Propulsion will come down in price once we build more of the same technology and product in the United States and become the world leader in this new transportation era.
Seth Leitman is the consulting series editor to McGraw Hill on the Green Guru Guides.