Reuters Declares Electric Vehicles a “Dead End”
Reuters today published a widely syndicated article entitled, “Insight: Electric Cars Head Toward Another Dead End.” The piece had three primary authors, four additional contributing reporters, and two editors—a team of journalists that states as its thesis in the first paragraph that electric cars are “not ready for prime time, and may never be.” The authors instead report that automotive executives across the globe are shifting to a “promising new alternative power source: hydrogen.”
EVs Pitted Against Hydrogen
What will the takeaway be for most readers? Automakers are now shifting to hydrogen, because EVs, as Reuters states, are plagued with problems such as high cost and lack of infrastructure.
This is EV-to-hydrogen cost comparison is hard to understand, considering that the cost of plug-in electric vehicles are dropping, with a base-level 2013 Nissan LEAF now below $20,000 in California—after federal and state incentives. The new Smart Electric Drive will start at $25,000 before incentives, and a plug-in hybrid like the Ford C-Max Energi—depending on local incentives and trim packages—costs less than its conventional hybrid counterpart. Production volume for vehicles and batteries is expanding, to further bring down costs over time. At the same time, the number of charging stations, both Level 2 240V and DC Quick Chargers, is steadily growing.
The Reuters article meanwhile gives the impression that hydrogen fuel cell vehicles are indeed ready for prime time—but fails to mention that new hydrogen fuel cell vehicles are still two or three years away from coming to market; that they remain prohibitively expensive to produce; and that hydrogen fuel (and the stations that could provide it) are much more expensive and less practical than electricity as an automotive fuel. EV drivers use ubiquitous cheap electricity, often supplied right in their garage, to power their cars. (The D.O.E. currently lists 10 hydrogen fueling stations in the United States, compared to more than 5,000 public EV charging stations).
The authors rightly point out that the Obama Administration has backed off its goal of putting 1 million plug-in electric cars on the road by 2015. But the article also fails to mention that the 1 million EV target, instead, will likely be reached by about 2017.
EVs Pitted Against Hybrids
Besides hydrogen, Reuters posits that the shift to conventional hybrids by Nissan and others is further evidence that plug-in cars have failed. It's true that Nissan and other automakers will continue to offer hybrid options in mainstream models, in order to meet increasingly strict emissions standards. But this auto industry trend is taking place on a separate track from EVs. In other words, EVs and hybrids are not an either-or proposition. (Actually, hybrids are widely considered a gateway for a consumer to make a subsequent purchase of a plug-in hybrid or EV—so today’s hybrid owners are likely to become tomorrow’s EV drivers.)
The Reuters authors point to Nissan’s announcement that it will introduce 15 new hybrids globally by early 2017, as some kind of evidence that EVs have failed. But Carlos Ghosn, Nissan’s chief executive, states in the article that production of hybrids is a “pragmatic” decision, even as the company “continues to heavily promote electric cars.”
Toyota has never been a champion of EVs, and has a vested interest in continuing to roll out conventional hybrids. So, it’s not surprising that Toyota Vice Chairman Takeshi Uchiyamada, told Reuters that EVs are “not a viable replacement for most conventional cars."
Then again, after a dozen years on the U.S. market, conventional hybrids still represent just 3.3 percent of new car sales—so based on this logic, hybrids are also not a replacement for conventional cars. Even the most ardent EV fans do not believe that pure electric cars will replace all conventional cars—but instead can quite practically serve as a replacement for a small but continually expanding percentage of local driving (and eventually a growing part of regional driving).
Reuters rightly acknowledges that it took Toyota 10 years (starting with its first sales) to become cost-effective and profitable with the Prius and other hybrids—an investment of time and funds that was criticized by media for years, and now looks smart. But two years into the EV market, battery-powered cars are already being pronounced a “dead end,” and investments by Nissan and others as a losing proposition in an all-or-nothing gamble.
Pronounced Dead Before Arrival
Reuters gives Mitsuhiko Yamashita, Nissan executive vice president and head of research and development, a chance to say, “With EV technologies continuously improving and with prices falling, there is a possibility that sales could explode." But the authors immediately follow with their own declaration: “That isn't likely to happen anytime soon.”
It makes good sense to be realistic about how long it will take the EV market to become mature. Some EV executives have been too eager to overhype these vehicles a broad-based solution. Fair enough. But by declaring EVs a “dead end”—and to characterize hybrids and hydrogen as the real winners in the race for greener car technology—comes off as a poorly argued anti-EV hit piece.
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