2012 Plug-in Car Sales Already A Flop?

New first year plug-in car models will also have to compete with the second-year Volt and LEAF. Let's set our expectations accordingly.

In the US, there were about 8,000 sales of the Chevrolet Volt and nearly 10,000 sales of the Nissan LEAF in 2011. The media repeatedly portrays these numbers as woefully inadequate when compared to total vehicle sales. By this logic, 2012 sales of plug-in cars are already a disappointment, even before the first month's numbers have been reported. But consider that fewer than 6,000 US Toyota Prii were sold in 2000, its debut year in the US. By this comparison, both the LEAF and the Volt are off to a good start.

As my December article pointed out, we can expect to see plug-in cars from many more automakers in 2012. Now that the ice is broken, can we expect to see sales of all EVs to jump? Researchers at IDC Energy Insights predict that there will be 120,000 plug-in vehicles sold in North America this year and Pike Research predicts more than 250,000 plug-in vehicles will be sold globally in 2012.

These are impressive predictions that may be difficult to achieve. Achieving them would be a major stride in electrifying transportation.

What will it take for a new plug-in hybrid or electric vehicle to be considered successful in 2012? The obvious comparison for the first year sales of a new plug-in vehicle will be the LEAF’s and Volt’s first year sales. Once again, this is a fallacy, because new 2012 plug-in vehicles are being sold into a market that is very different than last year's market. There are two major differences worth pointing out.

Early Adopters: For many of the early adopters, like me, the car brand was not a significant factor. I had been in the market for a plug-in car for several years and I was going to buy the first affordable one available in my area. In my case, this was the Nissan LEAF. I have given dozens of people rides and two of my coworkers have bought LEAFs based on these rides and my gushing review. Being early to market has an advantage. A normal part of new technology adoption is friends telling friends and sales building momentum from word-of-mouth. To get the ball rolling, you need people who are willing to jump in and try something without the benefit of a friend’s review. The LEAF and the Volt have soaked up many of these risk-takers.

More Competition: Of course, this does not mean that all other plug-in car brands are doomed. If you are loyal to a car brand, maybe you have been watching plug-ins with interest and waiting for your BMW, Ford, Toyota, or other preferred badge. Many buyers are waiting for larger vehicles like the Toyota RAV 4 EV or the Ford C-MAX Energi. But remember that these additional choices also mean additional competition.

Certainly, there will be more options this year for plug-in car buyers and the total number of plug-ins sold in 2012 will far exceed the approximately 18,000 sales in 2011. More options will bring in more buyers, but it will also mean the sales will be spread across more brands. Depending on where you live, you could have a dozen plug-in vehicles to choose from by the end of 2012.

New first year models will also have to compete with the second-year Volt and LEAF. Both of these vehicles are available nationwide now and they are likely to have second year sales that more than double their first year’s volume

Realistic Expectations

The new plug-in vehicles models of 2012 are likely to have sales volumes lower than 10,000 units in their first year because there will be more competition. They are competing against rivals that have already been on the market for year or year-and-a-half.

This, however, does not mean that these vehicles are perpetually stunted. Five years from now, the auto-manufacturer that can deliver the best vehicle at the best price will be the market leader. This is a long term competition; don’t assume the horse first out of the gate is a guaranteed winner, but it is their race to lose.

If you read an article a year from now saying the Ford Focus EV, Plug-In Prius, or other 2012 model plug-in car is a failure because it did not beat the LEAF’s 2011 sales, don't believe the hype. The author is making a false comparison. A new plug-in vehicle coming out this year is being sold in a very different market than last year.

Also, there are bound to be unforeseen events that occur in 2012 that could greatly impact plug-in car sales forecasts predictions. If there is an economic meltdown, all vehicle sales would plummet. You never know if there's going to be a natural disaster, like last year's earthquake in Japan. As Donald Rumsfeld said, “There are known unknowns and unknown unknowns.”

So, we should look again at Chelsea Sexton's tweet to me last week, which PluginCars.com pointed to last week: “Lower volume prod launches = lower 1st yr sales #s for each = more neg media. We need to calibrate expectations accordingly.”

So, what's the answer to the question, “Are 2012 Plug-in Sales Already A Flop?” I reply, only if you had unrealistic expectations.