In the late 1990s, General Motors leased, and then promptly took back and crushed all of its electric EV1 vehicles (of Who Killed the Electric Car? movie fame). The cars were just one example of how big auto has historically launched alternative car models to meet state regulations, and then let them die on the vine (or actually killed them).
While the major automakers seem to take electric cars more seriously these days, are they still holding back? California and seven other U.S. states set a goal back in 2013 to put 3.3 million electric vehicles on the road by 2025. While nearly 90,000 plug-ins have been sold in the United States so far this year — a 38 percent increase from the same period last year — that number needs to be closer to 370,000 per year to reach the states’ goal.
It’s no doubt that to boost sales, automakers have a very big role to play, both in continuing to develop electric cars with the latest battery technologies and working closely with dealerships to ensure that customers have access to these vehicles.
“It’s a touchy subject for carmakers if you suggest they aren’t doing enough,” said Lisa Jerram, principal research analyst at Navigant Research, a clean-energy technology firm. “It varies by company — some are more focused on putting their electric vehicles out on the road.”
A 2016 study from the environmental nonprofit Sierra Club found that automakers, and especially dealerships, could be doing a lot more to sell electric vehicles. According to the study, which looked at more than 300 dealerships around the country, electric vehicles often weren’t carried on the lot, and if they were, the cars weren’t sufficiently charged up for test drives.
“If a dealer is certified to sell a Corvette, chances are that one can easily be found on the showroom floor, and they are ready to give you the keys to try it out,” said Luke Tonachel, director of the clean vehicles and fuel project at the nonprofit National Resources Defense Council. “Electric vehicles, however, may not be on the lot, or the inventory may be low.”
A 2014 Consumer Reports survey found that dealers often had limited knowledge about electric vehicles and weren’t able to answer questions about issues such as battery life and electric car tax breaks. In some cases, dealers would push shoppers to buy gas-powered cars instead.
Dealers are often poorly trained, because turnover at dealerships tends to be high, said J.R. DeShazo, director of the Luskin Center for Innovation at UCLA. Dealers can also be wary of recommending new technologies to customers, because if the customer complains, the onus falls on the dealership, not the automaker, to address the problem.
“There’s all of this conservatism on the part of the salesperson and the driver,” said DeShazo. “Dealers have always had a love-hate relationship with automakers.
That’s why electric car giant Tesla chose to create and run its own stores, rather than sell its vehicles at franchised dealerships. The company said it wants Tesla employees — so-called product specialists — to explain how the technology works to customers. Tesla also said its showrooms are strategically placed in areas with high foot traffic to attract new customers and educate them on electric cars, something traditional dealers aren’t always prone to do.
“Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars,” wrote Tesla CEO Elon Musk in a blog post. “It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business.”
Dealers and other automakers aren’t happy and have tried to block Tesla from selling directly to consumers. Currently, car companies already using franchises aren’t legally allowed to operate their own dealerships. Dealer associations in numerous states, including Texas and Connecticut, are trying to change the law to include companies like Tesla that don’t have existing franchise deals. The Utah Supreme Court recently ruled against Tesla’s request to sell its cars directly in the state.
To further increase sales, car companies should introduce electric vehicles in a wider variety of body types, said DeShazo, especially body types that are selling well in the gas-powered vehicle space.
Recent figures show customers are showing a preference for bigger cars. Trucks, SUVs, and crossovers represented more than 60 percent of total vehicle sales in 2016, an increase from 52 percent in 2013. Passenger car sales, on the other hand, dropped to 38 percent of market share in 2016, from 48 percent in 2013.
Currently, Tesla’s Model X is the only all-electric SUV on the market, although Mercedes, Ford, and Hyundai have announced plans to unveil zero-emissions SUVs in the next couple of years. But it’s not surprising that car manufacturers are taking their time to develop larger electric vehicles.
“Most automakers choose subcompact or compact body types, because they’re technologically easier to do,” said DeShazo.
For instance, the Tesla Model X hasn’t been as big a hit as expected. New-vehicle registration data showed Model X registrations dropped for a second consecutive quarter in Q1 of 2017. Musk partly blamed technological issues for the decline.
“Model X became kind of like a technology bandwagon of every cool thing we could imagine all at once,” said Musk during an earnings call in May. “That is a terrible strategy.”
One of the biggest reasons customers cite for not buying an electric vehicle is so-called range anxiety — a fear that there aren’t enough public charging stations to get drivers where they need to go.
One way to combat that issue is to build more public charging stations, especially along highways, to service electric vehicles during long trips. Tesla is tackling the problem with its Supercharger network of stations, totaling nearly 900 locations and counting around the country.
The company announced earlier this year that it plans to increase its number of individual chargers by 150 percent by the end of 2017, adding 1,000 chargers in California alone. Tesla drivers can use the stations free of charge for the life of their vehicles.
Other automakers, including Nissan and BMW, offer customers driving benefits through stations owned by other companies. Under Nissan’s initiative, new owners of the Nissan Leaf receive two years of free charging at roughly 2,000 fast-charging stations around the country. Nissan’s efforts seem to be working: So far this year, the company has sold 7,248 Leafs, a 25 percent increase from the 5,793 sold by June 2016.
Since the majority of EV owners are charging their cars at home, automakers might be better off developing cars with longer driving ranges rather than putting money into an extensive network of public charging stations. The Chevrolet Bolt, which is still being rolled out in states across the country, is being hailed as a game-changer for its driving range of 238 miles. The Bolt is also reasonably priced, costing just under $30,000 after tax breaks.
Tesla is hoping to compete with its similarly priced Model 3, capable of traveling 215 miles on a full charge. Musk tweeted earlier this month that production of the car had finally begun.
State and local governments also have a role to play in pushing car companies to do better. Since 2010, about half of all electric vehicle sales occurred in California, according to a study from the Union of Concerned Scientists.
That’s partly because of the state’s Zero Emission Vehicle program, which requires automakers to sell an increasing share of zero-emissions cars and trucks in California. For each electric vehicle sold, a company receives credits depending on the vehicle’s range.
A battery-only-powered car able to drive 200 miles on electricity, for example, is worth more credits than a plug-in hybrid electric vehicle able to drive 40 miles. The credits go toward making up a percentage requirement of a car manufacturer’s conventional light-duty sales. That percentage requirement is 4.5 percent for sales of 2018 models and increases to 22 percent in 2025.
However, carmakers can purchase credits from competitors who manufacture more zero-emissions vehicles, such as Tesla. This means a major automaker can still meet state mandates without selling many electric vehicles, according to a recent study from the NRDC that estimates the state is off pace for meeting its goals. Under the program, electric vehicles need to make up around 15 percent of new vehicles sold in California by 2025, but the market has been stuck at 3 percent since 2014.
Nine other states, including Connecticut, New York, and Oregon, that have adopted California’s program are seeing higher electric vehicle sales than the rest of the country, said Simon Mui, director of the California Vehicles and Fuels, Energy, and Transportation Program at the NRDC. Yet electric car sales have remained at below one percent nationally since 2014. The NRDC report recommends that California tweak its program to ensure automakers produce a certain number of zero-emissions vehicles each year, rather than rely solely on past credits.
Despite the current slow growth, electric vehicle sales are expected to skyrocket over the next few decades. Analysts and oil producers, including Exxon and BP, have revised their forecasts for electric car sales, estimating that millions more will be on the road than previously predicted.
The Organization for Petroleum Exporting Companies (OPEC), for instance, has raised its 2040 electric vehicle estimate from 45 million to 266 million. Yet major automakers are less enthusiastic and plan to sell only a collective 8 million electric cars per year by 2030, highlighting the disconnect between manufacturers and forecasters.
Ultimately, consumers will decide whether connecting their cars to the grid is a fad or the future.