Automotive Engineering Execs Pessimistic About Electric Car Sales

The Society of Automotive Engineers (SAE) World Congress was held April 24 &25 in Detroit.  Ford, GM and Chrysler representatives were pessimistic about the future of electric vehicles according to an article in the Wall Street Journal (WSJ).   This is somewhat surprising in that the President has been promoting electric vehicles as a centerpiece of his auto-industry policy.  President Obama has offered $2.4 billion in grants to boost some 48 projects related to electric vehicles or battery production according to the WSJ. This may have required some amount of courage as we know the Administration is a major partner in both GM and Chrysler.

Obama has set a goal of 1 million electric vehicles on the road by 2015.   But if you listen to the auto company engineering execs, it would seem that Obama’s goal is not likely to be met.  Fundamentally they see the buyers not interested in the high price of the electric vehicles and the execs don’t see the prices dropping real soon.

Joseph Bakaj, vice president for powertrain engineering at Ford said:” “By 2025, we see battery electric vehicles still with too long a payback, and inadequate range,”

Sam Winegarden, executive director of powertrain-engine engineering at General Motors Co. made a similar point with a chart comparing the amount of energy delivered by a given volume or mass of fuel. On his chart, lithium-ion batteries, used in electric cars such as the Nissan Leaf and GM’s plug-in hybrid Chevrolet Volt, were ranked close to zero compared to gasoline and diesel fuels, which delivered the most energy for the least amount of weight and cost to the consumer.”The rumored death of the internal combustion engine is premature,” Mr. Winegarden said.

Chris Cowland, director of advanced powertrains at Chrysler Group LLC, offered some revealing figures. A conventional, gasoline-fueled internal combustion engine and transmission make up about 10% of the cost of a $30,000 car, or about $3,000, he said. Ford Chief Executive Alan Mulally at a green-car forum in New York City last week said batteries for the electric Ford Focus cost $12,000 to $15,000 for a car that is priced at $39,200, about $15,000 more than a petroleum-fueled Focus.

Robert Bienenfeld, senior manager for environment and energy strategy at Honda Motor Co.’s U.S. arm, said that by 2025, a customer who buys a plug-in hybrid could wait 10 years to recover the added upfront costs, compared with a 2025 car outfitted with a more efficient gasoline engine and transmission. The payback for an all-electric car would be even longer

Nissan on the other hand is bullish about electric cars. According to the Nashville Business Journal, Brendan Jones, director of Nissan Leaf Marketing and Sales Strategy said that the Leaf buyers have an average household income of $131,000.

I would be optimistic if the typical buyer were someone in the mid $50s income range.

h/t The Hockey Schtick

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