Electric Vehicles And Hybrid Sales At Lowest Level Since 2011

These are troubling times for the electric vehicle (EV) and the hybrid (EHV) sales. The first 3 months of 2015 experienced lower sales than in the year 2011 which was the first full year of sales for the Chevy Volt (EVH) and the Nissan Leaf (EV).   Even though the buyer of a new EV or new EVH is still geting a $7500 tax credit, manufacturers are having to cut prices because the dealer’s inventories are building up. The low price of gasoline and the questions about electric vehicles durability are major reasons for this situation.  But there is another reason that is playing a big part in this problem.   A posting on Detroitnews.com titled “Electric vehicles lose buzz” talks about the issue of leasing:

“Edmunds.com reports that leases comprised nearly seven of every 10 plug-in cars that drove off dealer lots from January through March.

The unprecedented leasing rates means a steady supply of used all-electric and plug-in hybrid electric vehicles will continue to feed the market in the coming years.”

“Furthermore, motorists who leased those first-generation cars, and have decided not to buy them, are turning them in. They’re on dealer lots with still relatively low mileage, and at prices considerably cheaper than the new ones.”

“NADA’s Dixon said as more plug-ins and all-electrics enter the used car market, they will drive prices down even further, and likely exceed demand.

“Used EV demand arguably is going to be weaker than what it would be for new EV demand,” he said.

Dixon said even if the price of a used electric vehicle is the same price as a car with a traditional combustion engine, the rate of depreciation is expected to be greater over the long run. “That’s in addition to any cost concerns you have with expensive componentry that malfunctions down the road,” he said.”

Battery life is a big question mark.   When these electrics were introduced, some manufacturers said the battery life would be about 10 years. That is yet to be determined. In addition, the cost of a new battery is not yet well established. By the year 2020, for example, the battery prices may have experienced some lowering resulting from innovative battery technology and lower manufacturing costs. But again that is an unknown.

DetroitNews.com address this issue as follows:

” The largest expense is expected to be the batteries of the vehicles that are speculated to cost thousands, if not tens of thousands, of dollars.

Kelley Blue Book’s Ibara said that while the vehicles haven’t been around long enough to know how they will depreciate long-term, the cost and longevity of the battery could play a very large role in a vehicle’s value.

“It wouldn’t make sense to replace a 12-year old battery with a new battery that’s going to last 12 years, because chances are the car’s not going to last that long,” he said.”

Detroitnews.com has more to say about the slow sales of the electric vehicles so I suggest you click on the link provided.

cbdakota