In August 2010, I proposed this wager to a fellow journalist: President Obama’s declared goal was to get 1 million plug-in hybrid and all-electric cars on the road in the United States by 2015. I didn’t think that goal was reachable by 2018, even with the huge subsidies that Obama backed — but if I was wrong about that, I’d buy my colleague a new plug-in hybrid Chevy Volt.
Now the 2015 car-sale data are in; time to review the bidding. Americans bought a record 17.5 million passenger vehicles in the United States, of which 116,548 — 0.67 percent — were either plug-in hybrids or all-electrics, according to insideevs.com. That was about 6,500 fewer than in 2014.
Automakers have sold 407,136 electrics (EVs) since they hit the market in 2010. That is 0.16 percent of the 250 million-plus U.S. passenger vehicle fleet. Assuming all are still on the road, carmakers must sell 300,000 this year and next to reach 1 million, or 0.3 percent of the fleet, by 2018.
I like my odds! The problem for EV enthusiasts is not the technology, though EVs still have not cured fundamental consumer concerns such as the fear that the battery will run out on a long trip and leave you stranded — “range anxiety.”
Rather, the limiting factor is, was and will be for years the value proposition: Given the cost of advanced batteries, which has not come down as swiftly as EV boosters assumed, most EVs are still very expensive. Gas savings, however, can’t offset the higher purchase price, even when you factor in the $7,500 federal tax credit EV buyers get.
Unless and until that’s solved, the raison d’etre of electric cars, and of federal policies to favor them — making a significant dent in carbon emissions — will be null and void.
Take the 2016 Chevy Volt, a plug-in hybrid that can go 50 miles or so on battery power before a gas motor kicks in. The Volt’s annual fuel cost (gas and electricity) is $250 less than the yearly gas tab for a comparable Mazda 3, according to the Energy Department.
However, the Volt’s list price (with all the options and after the tax credit) is $3,525 more than a similarly equipped Mazda 3’s. Do the math: The Volt’s gas savings will offset the price differential in 14 years.
Two-dollar-a-gallon gas isn’t doing anything to help the EV value proposition. But what about Tesla? Surely chief executive Elon Musk’s high-tech product, priced north of $100,000, will pave the way to all-electric nirvana, even if gas prices are, for now, heading down and interest rates are heading up.
That’s certainly the impression one would get from the press on Musk and his company, the most fawning media treatment of any public figure since Pravda covered Stalin.
Tesla did sell 50,580 vehicles worldwide in 2015, just within the 50,000-to-52,000 range that Musk promised investors. Skeptics note, though, that this is a trivial percentage of the global market, and that Tesla’s achievements generally have taken longer than initially promised. Tesla owes its survival to subsidies from taxpayers, who are usually less well-heeled than its plutocratic customers; this Silicon Valley start-up has gotten $4.9 billion in state and federal support over the past decade, according to a May 30 Los Angeles Times report.
And they call GM “Government Motors.” The Times’s figure doesn’t include the huge tax breaks and other incentives for EV buyers in Norway, whose inhabitants had purchased 8,700 Tesla Model S’s as of October — roughly 10 percent of Model S sales worldwide since its introduction — according to the Norwegian Embassy in Washington.
(The ultimate source of those green-vehicle subsidies, by the way, is the money Norway accumulates by exporting 1.3 million barrels of oil per day.)
Given poor EV sales, supporters have fallen back to a more defensible line: The knowledge we’re accumulating while taking today’s EV baby steps will pay off in future technological leaps and bounds, which will finally lead to a mass-market EV that outcompetes and replaces gas-powered cars.
This is, indeed, the most respectable case for subsidizing EVs, but, for environmentalists, a strangely patient one.
In September 2012, the Congressional Budget Office estimated that the U.S. government was on course to subsidize EV production and sales to the tune of $7.5 billion through 2019.
We might have gotten more carbon reduction, sooner, if the government had spent that much money on things other than tax breaks for well-to-do Musk groupies. Retrofitting coal plants to burn natural gas comes to mind. Or nuclear power.
Meanwhile, my bet still stands. The other guy hasn’t taken me up on it, so far; maybe that’s because if I win, he has to buy me a BMW. Got my eye on a red one.
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