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What's behind the dismal sales of electric vehicles?

Would you buy an electric vehicle? Tell us why/why not in the comments section.

Fernando Morales/The Globe and Mail

The U.S.-based Union of Concerned Scientists (UCS) made a splash this week with a report that says you could save as much as $853 (U.S.) a year, on average, if you switch from a gasoline car to an EV (electric vehicle), and then live with it for the next 15 years.

We're sure to see a stampede of buyers chasing down a new Mitsubishi iMiEV, or a Chevrolet Volt or a Nissan Leaf. I mean, do you want to spend $18,000 on gas between now and 2027, or $5,200 on electricity to charge your battery car? You might save more, too. The UCS report assumes an average price of gas at $3.50 a gallon in the U.S., even though AAA says it's closer to $4.00 right now.

Naturally, then, I was stunned to see the dismal sales results for EVs in Canada. Dennis DesRosiers of DesRosiers Automotive Consultants shared these numbers with me:

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  • Chevrolet sold 275 Volts last year, out of total GM of Canada sales of 242,815.
  • Nissan sold 170 Leafs last year, out of Nissan’s 84,667 units.
  • Mitsubishi sold 23 iMiEVs last year, out of sales totalling 20,511.

In a Canadian new vehicle market of 1,585,519 in sales for 2011, the EV share came to 468. The vast, vast majority of those were not retailed through dealers, either. Real-time dealer transaction data from the Power Information Network (PIN) shows that 45 EV transactions were done at dealers. We can assume that agencies of various governments, quasi or full-fledged, bought almost all the EVs sold in Canada last year.

Surely things must be vastly different in the U.S. where, unlike Canada, various levels of government have pumped billions and billions into promoting the development and sale of EVs. Here are the U.S. numbers, provided once again by DesRosiers:

  • Total new vehicle sales in the U.S. in 2011: 12,731,537 units.
  • Volt sales: 7,671 units out of GM’s 2,503,797 units.
  • Leaf sales: 9,647 units out of Nissan’s 1,042,534 units.
  • iMiEV sales: 80 units out of 79,020 Mitsubishi units.

Despite all the hype preparing the marketplace for a wave of new EVs, consumers as a group don't want them yet.

Despite thousands of dollars in direct subsidies to EV buyers, only a handful of hard-core early adopters have taken the EV plunge.

Despite billions in subsidies and cheap loans to the companies creating EVs, they remain outrageously overpriced compared to the most fuel efficient gasoline-only vehicles.

The scientists did an admirable and useful job in attempting to quantify the long-term financial benefits of going EV, even if some of the basic assumptions seem a little far-fetched. But the report did not dig deeply into all the reasons for people not buying them – and there are many.

The biggest barrier to EVs going mainstream is in fact the easiest one to understand: the up-front cost of a $40,000-ish Leaf or Volt is simply too much, even with $8,000, $9,000, $10,000 or more taxpayer-funded subsidies. As Rebecca Lindland, an analyst at IHS, put it to The Detroit News, prospective buyers look at the up-front cost — not the total cost of ownership. This will surely shock the UCS.

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The hard truth is EVs can only be expected to take off with buyers when you and I can get one for about the same price as a Honda Fit or a Hyundai Accent or a Ford Fiesta or a Kia Rio or a Chevy Sonic or any number of $16,000 or so runabouts with good fuel economy and low emissions. Until then, EVs will occupy a tiny niche of the marketplace, one dependent on taxpayer subsidies.

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