automotive

Electric Cars Set To Tiptoe Into Showrooms

Nissan Leaf

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."

2 comments about "Electric Cars Set To Tiptoe Into Showrooms ".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, November 19, 2009 at 9:23 a.m.

    I spent 5 years from 2002 thru 2007 working on Hydrogen Car projects for Ford, Mercedes, Toyota, Nissan, Honda, and GM before coming to advertising. The struggle was the fuel system because in order to get the 300 mile per tank range they needed to store H2 at 10,000psi which was doable but needed hardware developed for it (what I was working on as well as sitting on the safety/performance standards board for North America). Because this was such a challenge they were also looking at ways of converting natural gas and water to Hydrogen on board. This is still years away. But Europe has championed it and is rolling out 15,000 hydrogen stations starting now. Shell can already convert its 12,000+ stations in the US tomorrow if need be. But because of the massive investments needed and the worry of going all in and then having electric be the VHS to Hydrogen's Betamax they have had to look at all technologies. My view is solar charging of batteries or filling a car with water for a fuel cell would be best long term but due to lack of proper battery/solar technology and hydrogen creating technology either will take time.

    The sad thing is for the cost of just the Iraq War, or Bush's $1.5 trillion tax breaks for the rich both which did massive harm to this nations finances, we could of had the US off oil completely, cured cancer and HIV, and possibly healthcare for all. For the cost of both we could of had it all and more. Shows where the priorities were for Bush/Cheney.

  2. Adam Hartung from spark partners, November 19, 2009 at 2:23 p.m.

    The problem isn't the cars, it's the approach to launching them. Nissan, Chevrolet, Toyota and Ford are all trying to sell a different product, for a different market, by using traditional distribution and traditional marketing. It won't work, because the electric car is not a solution for people who buy traditional petroleum-powered cars.

    The electric car can be a big success if these companies would allow the cars to be launched by White Space teams that have permission to find the market and fulfill it the way electric car buyers need the market developed. Instead of trying to sell these the old way, the teams need permission to ignore sacred cows and do what the market demands. This would allow the product to succeed where it can - and sales could grow.

    With the right approach, the electric car market could be robust in just a few years. But it won't happen with the approach currently being tried. Read more at http://www.ThePhoenixPrinciple.com

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