The US president wanted to see a total of one million electric vehicles on the streets of America by 2015. For now there are only 330,000, half of which are in California. One of the reasons: American car dealers have become a major roadblock to selling electric vehicles. John Dyer reports from Boston.
When Robert Kast recently purchased a Volkswagen e-Golf at a dealership in northern New Jersey, the salesman tried to sell him a USD 15-a-month plan for oil changes and timing belt and water pump repairs even though electric cars don’t need that maintenance.
“It doesn’t have any of those things,’” Kast is quoted by the New York Times as saying, adding that the salesman didn’t believe him and checked with his superiors to make sure. “I knew a whole lot more about the car than anyone in the building.”
Money made from service contracts
There is hardly an isolated case as dealers in the US make much of their money off service contracts. Electric vehicles, however, don’t need these.
“There’s nothing much to go wrong,” said Marc Deutsch, who oversees Nissan’s electric car business development. “There’s no transmission to go bad.”
Deutsch added that sellers often don’t know how to pitch Nissan’s electric car, the Leaf, to customers. “A salesperson can sell two gas burners in less than it takes to sell a Leaf,” he said.
330,000 instead of 1 million
Problems like these are one reason why only 330,000 electric cars are on the road in the US today even though President Barack Obama called for Americans to drive one million electric vehicles by this year.
“Dealers may have very good reasons for steering a potential buyer away from an EV,” said Eric Cahill, a scholar at the Institute of Transportation Studies at the University of California at Davis who called dealers a “bottleneck” to efforts to wean the United States off fossil fuels and carbon emissions that cause climate change.
Some of the barriers to selling cars are understandable. High-end electric vehicles cost around USD 75,000, or twice as much as the average price of a car in the US, according to Consumer Reports and auto research Kelly Blue Book.
Low price of gas
The low price of gas is also an incentive to drivers.
“The reality is only 14 per cent of new-car owners surveyed said that gas mileage was the most important factor for buying a car,” said Forrest McConnell, president of McConnell Honda-Acura in Alabama and the former chairman of the National Automobile Dealers Association, in a speech to dealers in Michigan this summer
“That was a nice way of saying that 86 per cent of them didn’t think so. You have to consider the customer’s needs, and some trump fuel economy.”
Charging stations few and far between
Charging stations outside of California, where 40 per cent of American electric cars are located, and urban areas like Boston and New York are few and far between, according to a recent National Research Council report. Most electric vehicles can travel just under 130 kilometress before needing a charge.
“Local governments should streamline permitting processes and adopt building codes that require new construction to be capable of supporting future charging installations, and should encourage workplaces to consider investments in charging infrastructure,” the Council’s reports said.
Gas-powered cars prove stiff competition
New efficient, inexpensive gas-powered cars have also become stiff competition for electric vehicles, he said. A decade ago, automakers produced around 70 high-mileage vehicles in the US. Today, they produce almost 500.
“We have gas-powered Honda Civics on my dealership lot that can get 40 miles to the gallon,” said McConnell. This is the equivalent of 5.8 litres per 100 kilometres. “People used to have to buy a hybrid car to get that kind of mileage. In the past few years, manufacturers have been doing a hell of a job.”
Tesla bypasses dealerships
The situation has led American electric car company Tesla to bypass dealerships entirely. The company sells directly to customers and hopes to sell around 500,000 cars annually by 2020.
Still, the situation could become worse for electric vehicles. Tax breaks that are equivalent to government subsidies for electric cars have been crucial to their limited success. But those subsidies are not necessarily permanent.
In June, a 15-year-old tax break for electric vehicles expired in Georgia. Sales of electric cars plummeted 90 per cent in the months since then, according to Watchdog.org. Customers purchased 1,338 electric cars in Georgia in June before the tax break expired. In August, sales fell to 148 cars.