Are electric cars here to stay? I don't think so.

In My Humble Opinion
1

I think Mitt Romney was wrong to oppose the auto bailout, but he was right that electric cars have been a bad investment. As I see it, all the signs are pointing to the electric car companies eventually collapsing.

First, there’s A123, the biggest supplier of batteries for electric cars. They’ve gone bankrupt, and the only question is whether they will be sold to an American company (Johnson Controls) or a Chinese one (Wanxiang Group).

The 2 big electric car companies are Fisker and Tesla. Fisker is clearly doomed. They’ve been losing money since Day 1, and have no realistic chance of being profitable soon. They keep having production dispruptions, and the Department of Energy has frozen their federal loan because they can’t meet their production requirements. And now, there’s a chance they they may lose the only source of batteries for their cars. (A123 wants the bankruptcy judge to cancel all their contracts. Including Fisker’s.) Fisker will be gone within a year. They might not even make it to the end of this year.

Now let’s look at Tesla. At first glance, things seem to be going OK for them. They’re still not profitable, but they have 13,000 reservations for their cars (as of September), and the company’s CEO insists that the company will be making money by the end of the year, and that they’re on target to increase production to 400 cars per week by the end of the year. This seems overly optimistic to me, but let’s give them the benefit of the doubt and assume that Tesla meets these targets. I see trouble coming just around the corner.

400 cars per week is about 20,000 cars per year. Even if we assume modest growth in reservations, they’ll have all the orders filled by the end of next year. What happens then? Electric cars are hard to sell. Every major automaker has found this out. Unless interest in electric cars explodes, and does so quickly, Tesla is going to be making cars it can’t sell by the end of 2013. That means they’ll be losing money again.

There’s a certain amount of pent-up demand for electric cars, but all the evidence suggests that it’s really not that big a market. General Motors loses money selling the Chevy Volt, but they have other profitable cars to make up the loss. Tesla is a one-trick pony. If they can’t make money on their only procduct, they’re done.

I give Tesla about 2-3 years before they go bankrupt.

2

My concern is the environmental cost of the batteries. Disposal of regular batteries is already a problem. There’s lead and other nasty heavy metals in them.

Imagine if electric cars got popular. Also, the environmental cost to create the electricity for the cars. Electric cars just aren’t as Green as people assume.

3

If Tesla’s cars perform like they say, they’ll sell as many as they can produce.

4

Well, Tesla has 13,000 orders at that price. Getting the design right and the assembly line up and running is the expensive, difficult part. Now they’re in production, and they can start dropping the price a little.

Second, I think you’re wrong to frame this as “Electric car companies aren’t very good, therefore electric cars are a bad idea.” Toyota’s Prius is wildly popular, absurdly profitable, and a good transitional step. In a couple years, they’re planning on selling them as plug-in hybrids standard, which is the next transitional step, because it encourages the development of plug-in stations, technology, and infrastructure. A decade or so after that, I think there will be enough infrastructure in densely-populated areas to support electric cars that aren’t super-luxury like Tesla.

5

I think you are right…as long as gasoline sells for less than about $5.00/gallon, the market for electric cars will remain quite small. And, as Thomas Edison (Detroit Electric), Henry J. Kaiser (Kaiser-Frazier), Preston Tucker (Tucker), and John Z. DeLorean (DMC) all found out, you cannot be a small car company in a land of giants. Even SAAB (made about 120,000 cars/year) was too small to survive.
Tesla’s best hope is to merge with a larger car firm, possibly BMW or Mazda. Even Elon Musk’s millions are not enough to keep Tesla going.

6

Lot’s of car manufacturers have gone out of business. And we still have cars.

7

I imagine the batteries will be reclaimed and recycled just as most current car batteries are. AA batteries get thrown out because they’re small, cheap, and common enough that taking them to a recycling center just isn’t worth it. A battery powerful enough to power an automobile will have enough scrap value that just chucking it in a landfill would be ludicrous. I suspect the environmental impact of battery disposal will be less than that of used engine oil disposal (batteries will be changed infrequently, and virtually no one will change them at home).

As to the environmental cost to create the electricity, a kilowatt of power from a coal-fired power plant is less polluting than a kilowatt of power from a typicaly internal combustion engine.

8

Not when even the entry-level model is over $57,000. They’re still cars for rich people. The Chevy Volt is significantly cheaper (in the $40s, I believe), and it still doesn’t sell well. And the Volt is a plug-in hybrid, which means there is no range anxiety, even if you’re way out in the boonies somewhere.

9

Single purpose companies that sell only electric cars are there to get bought out by one of the big companies.

I think electric cars are on the cusp of (or at least within sight of) mainstream utility. The biggest problem with ECs are short range, and limited roadside recharging. Personally, I don’t think roadside recharging is ever going to be the norm for ECs nor will technology improvements ever make roadside recharging even remotely as convenient as refilling with gas.

Extending range, OTOH, will make ECs useful enough to compete directly with ICE cars. Give me a 400 mile range, and I don’t think I’d ever notice the range limitation. At worst, I’d plan to recharge at my destination, which is hardly any more trouble than planning to refuel at my destination. At that point, it’s price and utility, there’s no reason to believe that an EC can NEVER compete on price, they’re simply not competitive today.

10

In this case (not strictly an electric car), the problem is price. I know a number of folks (including myself) who would love to buy a Volt, but right now, even with state and federal incentives, the price differential is much higher than the lifetime savings on gas, even assuming the batteries would never have to be replaced.

Get the price a lot closer to $25,000, and build in some guarantee about the battery life or replacement cost, and I think these things would be flying off the lot. (Alternatively, dramatically raise the mileage on the lease option. It’s affordable already, but the low lease mileage limits basically preclude using the car as a commuter, which is the whole point.)

Since they’re already losing money on each one, the question becomes: can they make it up in volume/economies of scale? I suspect for the moment, the answer is no, but I doubt it’ll stay that way.

11

Yes, but there are a lot of rich people. Lexus, BMW, Mercedes, all sell $60,000 cars all day every day.
With a 300 mile range, you’re not going to get much anxiety.

12

I question this statement. Nobody has ever given me money for an old automobile battery. Rather, I have to pay $10 to the recycler to take it off my hands. That’s why you see so many of them tossed into the brush on the side of the road. Are they paying you for your old tires and motor oil as well?

13

Lead-acid batteries have definite scrap value - reclaiming Lead from them is significantly easier/cheaper than refining it from ore - probably by at least an order of magnitude.

I have no idea why you’re seeing people dumping them - they’re a revenue item for waste recycling centres and people make money from scavenging them and selling to scrap dealers.

14

Which electric car uses lead acid batteries again? :confused:

15

Just a note for reference: you may want to see this thread, for an ongoing discussion about this subject in GD.

Will a company selling only EV’s make it? I don’t know. Tesla is a niche company now selling a specialty product. That said the Model S seats 5 adults and 2 kids, carries a bunch of stuff, and can outperform the 500 HP twin turbo BMW M5. There are a fair number of people spending $50K plus on high end mini-vans and a modest number spending more, sometimes much more, on cars that perform like that. This competes well in both segments and let’s face it, not too many of those people are driving on family road trips … they are flying to the ski lodge or to the island resort.

That’s a different question than electric vehicles growing as a market segment. In fact the plug-in segment is experiencing very healthy growth, much better than hybrids did when they were first introduced. More and more of the major automakers are joining the bandwagon: Ford has just started selling their plug-in hybrids and others have plans to enter the market soon.

No doubt however both plug-ins and hybrids are going to stay a relatively small portion of the market until gas goes up a bit more and/or battery costs decrease a bit more. The average consumer needs to see their upfront investment recouped by decreased running costs within five, maybe even within three years, before they’ll bite.

As to environmental benefits - this is the most pessimistic appraisal out there which does not consider any recycling or repurposing of the batteries and which does not consider the PHEV option (which from my POV includes the Volt as well as the plug-in Prius and the Ford Energi line). Even under those limitations EV total lifecycle environmental costs were a plus in all scenarios except one that included all coal powered plants. There is also little doubt that there will be solid recycling/repurposing program for these batteries. The biggest limit to developing these programs may be if these batteries end up lasting as long as the EV longer than assumed in that article, as manufacturers suggest they will - you are not going to have a recycling/repurposing industry emerge until you have a sizable and dependable waste stream.

I can’t say which companies will make it big and which will fail, which battery makers will prevail (besides LGChem) and which will be bought out for pennies on the dollar, or even how quickly battery costs will decrease and when those lines of increasing gas costs and decreasing battery costs will cross. But the plug-in segment is in fact growing moderately quickly and they are here to stay.

16

Instead of saying “I don’t think so” you should say “Negative”.

17

Let us praise the really profitable petrol-based car manufacturers. Like GM. And Chrysler. Errrr

18

So here’s a question - imagine a world with a $22,000 electric car that has taken over a good margin of market share in, say, the Northeast. There are still thousands without power even now - if you had an electric car, what would happen to you? Gas is being rationed, but at least it’s available, and be brought in over the roads. If there’s no electricity, there’s no car for you.

And how about Spring storm season in the Midwest? My cousin lives in a neighborhood that regularly loses power in storms, sometimes for over a day. Sure hope she doesn’t have to go to work. Earthquakes in the West?

I think electricity will fail because of the relatively regular uncertainly of the supply. We still lose power often enough that I couldn’t take the chance.

This money might be better spent continuing work on things like hydrogen “gel pack” batteries and the like.

19

  1. in addition to the response already posted, most if not all auto parts retailers will take your old battery when you buy a new one (core deposit + refund.)

  2. EVs don’t use lead-acid batteries for propulsion anymore. NiMH and LiIon/LiPoly are the dominant chemistries.

Chrysler’s been turning in consecutive profitable quarters since about Q1-Q2 2011. They’re basically keeping FIAT afloat right now.

20

Sateryn76, that very issue was at the forefront of my mind during the aftermath. On the one hand, when you’re out of electricity, you’re in a hard way with an Electric Car. On the other hand, the gas shortage hit everybody, and folks with electricity (there are lots and lots of them by now) could recharge at home (or recharge a friend’s car) instead of sitting in line for hours to get topped off.

Overall, I’d say ECs are a net negative in terms of disaster performance, but diversification could be a positive. A household with one EC and one ICE-C could choose the power source that works best for them in times of trouble.