Electric Cars Set To Tiptoe Into Showrooms
If rumors of the demise of the electric car are exaggerated, so, perhaps, are market opportunities for such cars -- at least in the short term. Still, several automakers from top-tier brands to start-ups are preparing to roll them quietly into showrooms in the coming months.
Nissan last week unveiled its first electric car, the Leaf, in Los Angeles. The company, which says Leaf will be the first mass-market electric car, plans to begin selling it next year. It will not divulge the sticker price yet, but says it will be commensurate with that of a family sedan. Nissan is beginning national promotions via a college tour and a student competition on www.Facebook.com/nissan. The tour will make stops in 22 cities, 11 states, the District of Columbia, and Vancouver, Canada.
Among major automakers, GM's Chevy unit will begin selling a plug-in hybrid -- the Volt -- next year. Toyota is looking at a plug-in Prius, and Ford a plug-in version of the Escape hybrid. And at least three of the vehicles are from start-ups: Tesla, Coda Automotive, and the high-end Fisker -- all based in Southern California.
Tesla has been selling a $100,000 electric roadster since 2008 and has dealerships in nine cities, including New York, Los Angeles, Seattle, Chicago and Miami. The automaker plans to begin selling a more affordable all-electric sedan in 2012. Coda, which plans to start selling its first car -- a mass-market four-door -- in 2010, recently hired automotive veteran Kerri Martin as CMO. Martin helped launch BMW's Mini division in 2000, and was most recently director of brand innovation and marketing communications at Volkswagen.
Kara Saltness, marketing and communications director at Coda, tells Marketing Daily that the company's first car will also be priced in the mid-sedan range. She says the company plans to sell 1,600 of the cars in California next year, and will ramp up to build capacity for 20,000 vehicles in 2011 "if there is market demand." She adds that California is potentially a strong market statewide because of city and county incentives and a green mindset. Portland, Ore., Seattle, and Austin, Texas, are other strong potential markets.
Wes Brown of market consultancy Iceology, which is working on marketing strategy for Coda Automotive, says dealer revenue will be an issue with electrics because -- unlike gasoline engines with their thousands of moving parts that wear out, break down and otherwise falter over time -- electric motors just keep going and going.
"Auto dealers make money at back end -- in service," he says. "It's a bit like Lord & Taylor. You pay for the suit, but you also pay for alterations." Brown, who says maintenance service on a car can be 20% of auto retail revenue, says higher sticker price is the only way to get dealers more money on electric-car sales.
The other problem is finding stations to get an electric fill-up. "The problem is range, charging time and infrastructure," he says, noting that both San Francisco and Portland, Ore. are racing to develop an electric-car infrastructure. He says that although battery technology that improves range and longevity and reduces charge time is accelerating, "we are five years, at least, from having [electric-car charging] infrastructure on the West Coast."
Brown says the initial market for electric cars will be affluent, highly educated early adopters. "These are people willing and able to make those sacrifices to better the world, because you are dealing with people who say climate change and the environment are leading issues. You'll have almost every mass-carmaker looking at some vehicle like this in the next three to five years."