Scott Kluth has a love-hate relationship with his new Fisker Karma luxury electric sedan.
The 34-year-old car lover bought the plug-in hybrid electric Karma in December for $107,850, but five days later the car’s battery died as he was driving in downtown Chicago. While the car he affectionately calls a “head turner” was fixed in a recall, Kluth remains uncertain how much he will drive it.
“I just want a car that works,” Kluth said. “It’s a fun car to drive. It’s just that I’ve lost confidence in it.”
The Karma’s problems – one vehicle died during testing by Consumer Reports this month – follow bad publicity arising from a probe of General Motors Co’s Chevrolet Volt and weak sales of the car, and the closure or bankruptcy of several electric vehicle-related start-ups.
The unrelenting bad news has led to questions about the readiness of electric cars and raises fresh doubts about a technology that has been around since the late 1890s but is still struggling to win over the public.
Whether electric vehicles can find an audience beyond U.S. policy makers in Washington and Hollywood celebrities depends on lowering vehicle prices without selling cars at a loss, analysts and industry executives say, while extending driving range to make the cars competitive with their gasoline-powered peers.
“It’s going to be a slow slog,” said John O’Dell, senior green car editor at industry research firm Edmunds.com. “Maybe there’s too much expectation of more and quicker success than might realistically be expected of a brand-new technology.”
He also questioned whether priorities will simply change for whomever is U.S. president after the November election. Electric vehicles could lose tax breaks – currently worth $7,500 a vehicle for buyers – particularly if a Republican ends up in the White House.
Edmunds expects pure electric cars and plug-in hybrids to make up only 1.5 per cent of the U.S. market in 2017, compared with 0.1 per cent last year, and O’Dell said that may be optimistic. Consumers charge all-electric cars by plugging into an outlet, while hybrid versions include a gasoline engine.
U.S. President Barack Obama’s administration has been a strong proponent of electric vehicles like the Volt and set a goal of getting one million battery-powered vehicles on the road by 2015. Lux Research estimates that number will actually be fewer than 200,000. Both the Volt and Karma’s development were supported by low-interest federal loans.
That has not dissuaded auto makers, many of which plan to launch electric vehicles to join the Volt and Nissan’s all-electric Leaf in a bid to meet rising fuel efficiency standards. Toyota has begun selling a plug-in Prius, and EVs from Ford, Honda, BMW and Fiat will join the fray this year, along with cars from start-ups Tesla and Coda Automotive.
Electric cars aren’t a new concept. Henry Ford bought his wife, Clara, at least two electric cars in the early 1900s offering at best 50 miles driving range and top speeds of about 35 mph, according to the Henry Ford Museum.
But analysts said auto makers have not done a good enough job getting the costs down and explaining the technology to win over anyone beyond early adopters like actor Leonardo DiCaprio, pop idol Justin Bieber, comedian Jay Leno and former U.S. Secretary of State Colin Powell.
“You can do all the advertising and promotion you want, but if people don’t buy into the message the needle’s not going to move,” said George Cook, a marketing professor at the University of Rochester’s business school and a former Ford executive.
The Volt, at almost $40,000 (U.S.) before federal subsidies, is seen as too expensive by many critics. Fiat-Chrysler Chief Executive Sergio Marchionne, a long-time EV skeptic, has said Chrysler will lose more than $10,000 on every battery-powered Fiat 500 it sells.
And even with rising gasoline prices, EVs are just not competitive, according to the Lundberg Survey. Gasoline prices would have to rise to $8.53 per U.S. gallon to make the Leaf competitive and hit $12.50 for a Volt to be worth it, based on the cost of gasoline versus electricity, fuel efficiency and depreciation, the survey said.
Obama’s vision, which he laid out at a Daimler truck plant in North Carolina this month, includes a car battery that costs half the price of today’s versions and can go up to 300 miles on a single charge. The industry is far from achieving that.
Since last fall, there has been a run of bad news for EVs, starting with the late November news that U.S. safety regulators were investigating the Volt for possible battery fires.
While the federal investigation was closed with the conclusion there was no defect and the car did not pose a greater risk of fire than gas-powered vehicles, weak demand led General Motors to halt production for five weeks and temporarily lay off 1,300 workers at the plant that builds the car. GM, which strengthened the structural protection of the Volt battery, has repeatedly said the car is safe, and some said the safety probe should have never occurred.