Wall Street Journal Article Sees 'Bumpy Road' for EVs

· · 4 years ago

In a series of articles for The Wall Street Journal, writer Michael Ramsey found that excitement over the expected electric vehicles boom exceeds the potential of those vehicles to gain near-term traction in the United States. Despite finding positive user experience in an article profiling frequent Plugincars.com contributer Tom Moloughney, Ramsey sees many reasons for skepticism about whether EVs will actually be successful in the U.S.

The list plug-in drawbacks cited in the articles should be familiar to most fans of the vehicles. (They have a limited range, they're expensive, they'll only make sense when gas hits $8 a gallon, etc.)

But the sum of these arguments doesn't necessarily clash with what most realistic EV enthusiasts and their counterparts within the auto industry have been saying about plug-in adoption for years: "If you build them, the market will eventually come."

In "Bumpy Road for Electric Cars," Ramsey cites a Johnson Controls study that found that battery electric vehicles make financial sense for just 3 percent of drivers. That number may or may not factor in the tens of millions of people who own multiple cars and can use each as needed in their daily lives, but let's assume it's correct.

The short-term goal for the electric vehicles industry will be getting cars into the hands of the drivers for whom it makes real fiscal and lifestyle sense to own an plug-in—as well as the many others who are willing to pay a little more for a car that they think is, in one way or another, "better."

Over the next ten years, if plug-in carmakers were able to attract just half of the more than 6 million drivers who would be financially suited to driving electric vehicles, they would average 300,000 sales per year over that period. Not only would those numbers be beyond most advocates' wildest dreams for the early EV market, they would cause battery prices to fall significantly—to levels where it would make financial sense for millions or even tens of millions of more people to drive electric.

That isn't to suggest that such a rosy scenario is likely, but it underscores what seems to be a misunderstanding on the part of many as to what "success" will mean for the infant electric vehicles market.

The most important task for plug-in adoption isn't getting to 20 percent of vehicle sales in the United States—it's getting from 0 to 1 percent, from 1 to 2 percent, and then from 2 to 4 percent. As those milestones are reached, the cost of EVs will drop significantly, changing all of the cost considerations involved with owning one.

So will plug-ins be such an overnight success that they put gas stations out of business within a decade? No. But that doesn't mean that the long-term outlook for them is necessarily "bumpy"—just a little slower than perhaps the hype might lead some people to believe.

Comments

· · 4 years ago

When I was contacted by Mike Ramsey of the WSJ, he was upfront about the slant of the series he was working on. I knew it wasn't going to really be pro-EV but he asked me if I would participate as an example of how EV's can work because I am living with one and really love it.

Mike and I talked for quite some time and I think I successfully answered all the questions and certainly convinced him that an electric car with a 100 mile range will work for some people, like me, but I just get the feeling that he really doesn't think enough people will want electric cars to inspire the auto makers to continue making them.

They did a really nice graphic display so check out the article but he really didn't print a lot of what we discussed which is unfortunate because I had a lot to say.

· · 4 years ago

Notice that Ramsey -- and people like the Time magazine blogger, etc. who are amplifying the WSJ story -- don't take into account the ways in which government subsidies and tax breaks keep the cost of gasoline artificially low by a considerable amount. In fact, if you calculate subsides, tax breaks for oil + the economic cost of environmental degradation incurred by oil drilling, transportation, and the air pollution caused by ICEs, you're at least at $8 per gallon, if not higher.

Of course, mainstream journalists rarely question received "wisdom" and, therefore, in this journalism professor's view -- yes, I'm journalism prof. at U. of Denver (as well as a former newspaper journalist myself) are not practicing good journalism.

The following report is old, but it's one of several that I've seen (I can't seem to remember where I've seen the others), which calculates the true cost of gasoline -- http://www.icta.org/doc/Real%20Price%20of%20Gasoline.pdf

When you calculate true cost, plug-ins, especially those powered by renewable energy forms, win -- on a cost-analysis basis! -- hands down!

· Samie (not verified) · 4 years ago

Thanks Christof Demont-Heinrich for your comments. Sometimes economics and progression of innovation/markets can be completely different from short-term politics and in the moment journalism....

There are many terms for Michael Ramsey's type of predicts/thinking, I usually call it "one moment in time forecasting". Many variables will ultimately determine the progression of electric vehicles including things that are uncertain today.

Sorry Tom, I am not dismissing your input into Ramsey's article or criticizing him as a journalist. I think forecasting is tough and is not as easy or simple as what some make it out to be.

Oh beyond research from the International Center For Technology Assessment on hidden costs of gasoline, another great source is http://www.rff.org (Resources For The Future). RFF is a great source for the general public & usually not as dry to read as some research found in academic journals.

· indyflick (not verified) · 4 years ago

Two sayings are applicable here, in my opinion. First, “A journey of a thousand miles begins with a single step.” I suppose you could make the case that the first step actually began a decade ago with an awkward stumble. Regardless, we now have a major auto company selling a pure EV through a wide distribution channel and that's a big deal. Also, Nissan have stated the LEAF is a platform from which we'll see a variety of future vehicles. It's likely Nissan will also OEM the LEAF platform in the future to other car companies. When that happens you could see some very interesting derivative electric vehicles in the marketplace.

Second, “The proof of pudding is in the taste”. These slanted journalist can try and spread all the FUD they want, however it is the case that Nissan are sold out of the LEAF for 2011. I guess that little fact escaped the author. Remember that old joke, “Nobody goes to that nightclub anymore, it's too crowded!” Well it's now goes, “Nobody is going to buy an electric car, they're sold out!"

· JJ (not verified) · 4 years ago

Ahhh... Wallstreet ... the creators of subprime mortgages bundled and sold as safe investments world wide.
As if anyone is going to believe anything they say now.

· Carl Rising-Moore (not verified) · 4 years ago

You can bet your bottom dollar on the fact that the oil industry has insider stories being placed in so called reputable news outlets.

This story reeks of insider journalism.... oil industry/journalism planted story. With the recent profits of the oil industry, they can afford to try and "Kill the Electric Car"... again. So much for fair and balanced reporting from the Wall Street Journal.

While America messes around, the world is going green despite the " discredited wisdom of wall street".

Good for Nissan and GM, they have kicked off an important concept with the wind at their backs.

· Lad (not verified) · 4 years ago

All I can tell you as a consumer is I fear that our Congress is so dependent on Big Business paying for their elections, they have lost the desire to become statesmen and perhaps without knowing, are hell-bent on destroying our middle-class. The only way I see for the country to become great again is for the people to pay for and control our election system by Public Paid Elections. This will not stop journalists from writing negative PR, such as this, for the oil and auto industries; but, it will certainly weaken the influence big business has on how and where the government spends subside money. Perhaps we could have that Manhattan project for electric cars, so many of us feel is necessary to help us raise above fighting wars over fossil energy and to clean up our air.

· JJ (not verified) · 4 years ago

I remember a news story or doc(a decade or 2 ago) about Hydro Quebec in Canada developing a very powerful electric car (they showed it perform) and about the project being "mysteriously" killed off.

Between the provinces of Quebec and Newfounland there are big reserves of oil in the sea (as said on the news).
I don't think we'll run out of oil soon.
But I prefer to have an electric car or truck in the future if it means I won't have all the car repair hassles and maintenance.
Plus less noise, and less pollution. No oil spills - no gas to buy.
Except like someone said on another page: " danger - electron spill" :- }

· Jim1961 (not verified) · 4 years ago

I tried to read the article but the link appears to be broken. I really don't need to read the article to know there's a huge problem with Mr. Ramsey's logic. He says battery electric vehicles make financial sense for just 3 percent of drivers. To assume all car purchasers make decisions based purely on "financial sense" is just plain ignorant. If that were true then nobody would ever buy a sports car, or a luxury car or an SUV. (People with lot's children would buy minivans instead of SUVs). Many years ago people said that buying a Prius hybrid did not make financial sense yet hybrids began to sell like the proverbial hotcakes. This is obviously because people put value in doing the what they believe is the right thing for the environment. Not only is green trendy but many people have a deep-seated hatred for oil companies. Mark my words... electric cars are going to sell like f-ing hotcakes! One more thing... I have a friend who works for Exxon/Mobil (BTW, he hates working there). He told me Exxon/Mobil is projecting an average price of $3.50 per gallon of gasoline by March of next year.

· Jim1961 (not verified) · 4 years ago

There is one more thing I'd like to add. There are a lot of people who absolutely hate GM. Many people who believe the "who killed the electric car" conspiracy hate GM. On the other side of the political spectrum, Republicans want to see GM fail because if GM succeeds if will reflect well on Obama. (It's funny how Republicans want GM to fail and don't care how many Americans would lose their jobs as long as it hurts Obama.. but I'm getting off topic) The point I want to make is that GM is going to be VERY careful about making sure every Volt is built right and is reliable. I believe this is why GM will only build 10,000 Volts in 2011 regardless of demand.

· 4chan v (not verified) · 3 years ago

Looks awesome! I do welcome the tabs placed on the top!

· John (not verified) · 3 years ago

So what's keeping the EV (electric vehicles) from being widely used by the people. So many benefits but how come they are not much people using them yet?

· · 3 years ago

John: its primarially because there hasn't been any electric vehicles to purchase until this year (other than a $100,000 Tesla roadster). It wasn't until last December that you can buy a Nissan LEAF and a Chevy volt, and even now a year they aren't available nationwide. Every one made gets sold and Nissan has tens of thousands of customers waiting for their car to be made so they can buy it. You can't drive what you cannot buy!

· · 3 years ago

@John,
Your perspective that '. . . not people using them yet' may depend on where you live. In CA, where most of the Volts and LEAFs have been delivered, I usually see a Volt, a LEAF, or a Tesla, in the wild, two or three times per week.
I did, however, see a Volt at a restaurant parking lot in Houston 2 weeks ago when I was visiting there so they are slowly getting on the roads.

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