Culture

2 More Roadblocks For Electric Vehicles

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..or is it?

As if Electric Vehicles didn’t have it tough already; they’re expensive, require specific infrastructure (that, in some places, is still nonexistent), and buyers are scarce. It seems the month of June has dealt the EV industry a few more unlucky blows. I bet the majority of the public won’t be very surprised…

Setback #1: A new home for Detroit Electric.

Remember Detroit Electric? No, maybe not. Their time in the spotlight was brief.

Detroit Electric made headlines a few months ago when they rose again from their dusty, Detroit grave. Headlines turned into raised eyebrows, mine included, when they released their new super car which was essentially a repackaged, electric Lotus Elise. Been there, done that.

I’m not one to hope for something, or someone, to fail, but I said it before, and I’ll say it again, Detroit Electric’s product and target market are going to be a tough sell. In fact, I don’t think more than 200 of these cars will even hit the market… if any are produced at all. Newest rumors out of Michigan unfortunately support this theory.

Auto Week is reporting that Detroit Electric hasn’t even settled on a place to PRODUCE their new super car, the SP:01 EV Roadster.  To make matters worse, production is (was?) scheduled to start in less than two months. Hiring for the plant has also been delayed.  Reports state that the car maker will hire around 200 employees for its office and new plant… whenever they pick it out.

Prediction: I just cannot help but read these reports and think, “yep, called that.” After years of setbacks, I’m honestly not sure if Detroit Electric’s car will even get off the ground. The combination of expensive super car that nobody can afford + an old design + massive delays = T-R-O-U-B-L-E.  I’m predicting Fisker part deux.

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Setback #2: Trade-In Electric Vehicles… a dime today, a penny tomorrow?

Unlike the Detroit Electric SP:01 EV Roadster, both the Chevrolet Volt and Nissan Leaf are made for the mass-market consumer. Both cars have enjoyed some popularity, in part due to tax credits for new hybrid purchases. However, what happens to Volts and Leafs when they are traded in to dealers?

The poor buggers end up on used car lots, traded in for values that are drastically lower than their “new car” sticker price.

Most buyers compare trade-in values when shopping for new cars. Who doesn’t want the maximum amount in their pocket if they decide to trade in their car? For Leaf and Volt owners, this number is dropping. This is a kick in the gut for both EV manufacturers and current EV owners. After the incentives to balance out the car’s limited battery range and high price have dried up, what will the car be worth? Not a lot.  Volt and Leaf owners who hope to trade in will be walking away with depressingly lighter pockets.

In 2012, the trade-in value of a one-year old Nissan Leaf was almost $25,000. The Volt enjoyed a value of almost $32,000. If either of these vehicles were traded-in this year (2013), their values would be even less. A 2011 Chevrolet Volt would be valued around $22,000 while the Leaf would sink to a number around $14,700. Compared to their original costs, the Volt retained 49 percent of its value.  The Leaf? 42 percent.

Prediction:  Buyers don’t want to lose big when making a purchase as expensive and as important as a car. I think the thought of losing even more money in the current economy will cause them to shy away from EVs. Buyers who still want to be “green” could return to “tried and true” hybrid vehicles, like the Toyota Prius (it still enjoys a 63% residual resale value after a few years).

When it comes to manufacturers and dealers, they’re going to have their work cut out for them.  Selling vehicles to a public that is becoming wise to the true value of battery power… it’s going to be tough.