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Best Buy Pulls the Plug on Electric Cars, and Isn't That Charged About Scooters, Either

Best Buy is throttling back on electric motorcycles.
Sales of scooters were up 50 percent in the first quarter of the year because of high gas prices. So you'd think that Best Buy -- which has moved aggressively into the space with electric bikes, scooters and motorcycles (even the Segway) -- would be raking it in.

Uh, no. The zero-emission two-wheelers aren't moving, though the company declines to be specific about sales. In fact, with consumers confused about the logistics of plugging in, the company is pulling back from selling battery scooters, and is rethinking its whole approach to electric vehicles (EVs).

And in case you were wondering, all those stories in the past few days about Best Buy planning to sell plug-in cars? Those are wrong, too. It's not happening now, though it might, later.

Unreasonable expectations
Best Buy's conclusions are in line with polls that show just how out-of-whack most people's expectations of EVs -- primarily their range, cost and recharge time -- are. Those expectations meet cold reality under the fluorescent lights at Best Buy stores, and consumer confusion extends beyond the cars.

For instance, the $599 Currie scooter Best Buy has been selling has an eight-hour recharge time and a range of only 12 miles, making it impractical for many commuters. And reliability has been a problem. "I bought and returned three of these at different times from my local Sam's Club," said a poster on Amazon.

But people are indeed embracing traditional two-wheel transportation. Sales of gas-powered scooters are way up, and so is bike travel. Road bike sales jumped 29 percent in the first quarter. "We see spikes when fuel prices rise," Ty van Hooydonk of the Motorcycle Industry Council told USA Today.

Electric scooters are a huge hit in Asia, and American companies like Boston-Power are rushing into that market to sell batteries. But they're still very slow movers in the rest of the world. Pike Research points out:

Electric bicycles and electric scooters have seen substantial growth in sales around the world in recent years, while outside China, the electric motorcycle market remains in the early adopter stage. China's market for e-bikes and e-motorcycles dwarfs demand from all other regions combined, and consists of 98 percent of the global market.
Best Buy may have expected the American market to quickly ramp up, but it hasn't happened. Spokeswoman Kelly Groehler told me:
We're shutting down our broader two-wheel electric sales in 27 markets. There's a huge barrier with consumers about how they'll charge the vehicles. We'll continue to offer a small number of electric scooters and one bike in 250 locations [out of 1,101 in the U.S.], during the summer biking season only.
The vanguard big box steps back
This is a big move, because Best Buy was the vanguard big box in this category, and has issued a lot of brave talk about EVs. It said, for instance, that its stores get more foot traffic in a weekend than some dealerships do in a month, and that the electric car is merely one more appliance in its expanding inventory. Best Buy's Geek Squad is using Mitsubishi i-MiEV electric cars at some stores, and the parking lots are getting EV chargers.

Is the company going to sell EVs? Groehler told me that the news reports got it wrong. "We're not planning to do that at any time in the future." But she then qualified her statement: "We're not making commitments at this time."

It's easy to see why the news reports got traction, because Best Buy's Chad Bell told Automotive News:

We are having conversations with some of the startups-- I would say the conversations are going well. We are very excited about several partnerships that we can't talk about yet.
Without doubt, the company has had those talks with EV start-ups such as Think, Coda and Wheego that lack their own dealerships. But so far it's just talk. Best Buy could eventually sell cars, although it's lately been downsizing its stores -- and four-wheelers take up a lot of floor space.

Chargers in the aisles
Instead, the company is planning to help demystify EV chargers by putting them in the racks next to the flat-screen TVs. Best Buy will sell -- and the Geek Squad will install -- charging stations for Ford and Mitsubishi electric cars.

The retailer is similarly partnered with the utility NRG Energy (which is launching EV services in Texas) and ECOtality, a major provider that is managing a federal grant to install charging stations. The chargers aren't likely to be offered in stores nationwide, but in areas where there are concentrations of cars.

Best Buy isn't backing away from EVs, just reconsidering its approach to them. And it's abandoning a strategy based on selling e-bikes and scooters that don't have a market in the U.S. yet.


Photo: Best Buy
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