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Hybrids Are Likely to Trounce Electric Cars, If You Believe This Expert

Electric cars may be headed for a big crash in the marketplace, given sales projections based on faulty assumptions that should be more appropriately described as myths. So says a savvy industry observer who doubles as managing director of the business accelerator at major electric-vehicle battery supplier Johnson Controls (which puts batteries in Mercedes and BMW hybrids, among others).

Mary Ann Wright is an EV contrarian who thinks that, for at least the next decade, hybrids will continue to be much more successful in the marketplace than battery cars. She's distilled her doubts into five "EV Myths." Her criticism is on target, but both the cars and the marketplace are evolving rapidly.

Wright is dubious about consumer acceptance, and a recent survey from Kelley Blue Book does enforce that position. But with major EV orders in the last month from General Electric (25,000 cars), Iceland's Northern Lights Energy (1,000), Hertz and Enterprise rental cars, the federal government (through the General Services Administration) and others, it may be that fleet sales will be a big driver early on. AT&T says it will spend $500 million through 2019 on 15,000 alternative-power fleet vehicles, including many battery EVs. And all these orders could be enough of a financial lifeline to keep the industry alive until consumers can catch up.

In February, Wright testified before the Senate Appropriations Subcommittee on Energy and Water Development and told the senators (the four who showed up) that she expects there to be a big gap between the installed manufacturing capacity for EVs in 2015 (four million) and the projected worldwide demand (two million).

Wright told me then in an interview, "There is a very significant demand gap." She also said then that producing EVs in large volumes would not result in the "economies of scale" that would lower prices dramatically. "Scale won't get us all the way," she said, "but it is going to be a significant driver."

Now Wright is saying, as co-author of an op-ed in the Detroit Free Press, that the five pillars of EV appeal are built on sand. Among her points:

  • Green consumers won't lead sales. Car buyers are "highly rational," she says, and are very sensitive to sticker prices. With EVs costing in some cases twice as much as gas cars, "mass adoption will come only if the total cost falls much further."
  • Consumer driving patterns are erratic. While it's true, as EV makers repeatedly cite, that most consumers drive less than 40 miles a day (easily within the EV's average of 100-mile range), people actually have erratic driving patterns and might drive 20 miles one day and 200 the next. EVs aren't ideal for that scenario.
  • EVs won't gain in popularity as range increases. Unfortunately, adding range means bigger and more expensive batteries, increasing five-year operating costs of a 150-mile vehicle by 70 percent or more.
  • Scale won't drive prices down. The same cost benefits will also accrue to the standard hybrid car, which Wright sees as a more viable alternative. Over the next decade, she says, "the winner of the alternative vehicle sweepstakes will be the gas-electric hybrid â€"- not the all-electric car."
On early consumer purchases, Wright probably has a point. A Kelley Blue Book poll released Tuesday reveals that only seven percent of car shoppers say they are "likely" to buy an EV as their next purchase or lease. Even more alarming, people have mistaken impressions about the capabilities of electric cars. On average, KBB respondents said they would expect their EV to get 340 miles per charge â€"- when the reality is an average of 100-mile range. That's a big gap between expectation and reality.


Photo: Nissan