The current state of the electric car

by Ernie Hernandez on August 17, 2011

Infiniti EV

Sketch of future Infiniti EV coming in 2013

July sales slow for LEAF and Volt

Yes, we know that this is old news. But we’ve been thinking about it for a couple of weeks now. It seems that there is more to the slowdown than lack of supply, as is generally credited in much that we read. “Nissan is recovering from the natural disasters of their country”. “Chevy is retooling the Volt production capability”. Yeah… yeah… yeah…

The fact of the matter is that we are finding that more LEAFs are being left orphaned at the door, for whatever the reason. Where initially these vehicles were flying off of the showroom floor (sometimes with large dollar signs attached), such is no longer the case. While homes are being found for these cars, they are simply not moving at the rate they were before. But… they are still moving out the door. And while it may be taking a bit longer to sell these orphans, they likely are moving much more quickly than some other vehicles on the lot. It is all relative.

Also, just an observation, we are seeing a vast increase in the number of LEAFs in our neighborhood. We see several a week while driving around town running our errands. For instance, just the other day as we pulled into the Costco parking lot, we were the third LEAF in the lot at the time. That said, we have yet to see our first Volt in the wild in our neighborhood.

While we are not particular fans of the Volt for various reasons, we would really prefer to see more of them (as in any) driving around town. The fact that we are not seeing them leads us to believe that people are not buying them. If people are not buying them (while they are truly plug-in hybrids, and not electric cars as Chevrolet would have us believe), that is not good for the current state of the electric car business. Many people likely do buy into the idea that the Volt is an electric car, therefore if they do not see them on the road, perhaps their thinking might be that there is no need for them, which is why people aren’t buying them. Our thinking has always been that the Volt was on the expensive side. Perhaps what we are seeing currently is that the early adopters are aware of the price reduction on the 2012 Volt (for which orders are already being taken with an MSRP $1005 less than the 2011 model), so those 2011 Volts are languishing on the lot unless the dealer is willing to mark it down to move some metal. We’ll just have to watch the sales rates as we move toward the end of the year.

{ 12 comments… read them below or add one }

Sasparilla August 18, 2011 at 8:10 am

It’ll be interesting to see what’s happening here. Here in the far out suburbs of Illinois (where neither the Volt nor the Leaf are being delivered yet), I saw my first plug in car yesterday (beyond a Tesla a year or so ago) and it was a Volt. I’m convinced it was God taunting me as my wife and I came to the conclusion we could not make the stretch for a 2012 Leaf here in IL at this point, that really hurt coming to that conclusion, the night before (Nissan added IL to the early rollout states for some reason, shocked me and we weren’t ready).

I don’t think a small price drop (along with value taken out of the vehicle to facilitate that) would be affecting sales of the Volt at this point, really…

Something that I think could be affecting sales for the Volt though, is that by now many of the true believers in the opening markets have bought the Volt’s they want – its expensive and the Chevy dealers have often been gouging the customers ($5k over MSRP is not uncommon). Who wants to get into that other than the crazies who have to have the car first no matter what? Add in the spiral down of the stock market and the incomprehensible behavior of our government in Washington and you have an environment where people may not feel confident making the reach for the expensive electric powered vehicle.

$4 a gallon gasoline doesn’t appear so bad, to consumers, it seems (amazing how that became comfortable). Its a little frightening, frankly – things may go slower than we thought. With our federal government throwing in the towel on climate change over the side for the foreseeable future, this is something actionable the individual consumer can do for US reliance on foreign oil and action on CO2 emissions. What a nightmare it would be if GM and Nissan can’t sell these vehicles as production scales up (GM Volt production is supposed to go from 10k in 2011 to 60k in 2012 and Nissan in the US is supposed to go above 100k with the Leaf in 2013 with Smyrna opening – those are huge supply increases) and the electric car dies. I’ll feel alot better if sales resume, hopefully the Volt just requires the dealers to sell it at MSRP and both vehicles require rollout to the rest of the US market.

Reply

Ernie Hernandez (LEAFguy) August 18, 2011 at 8:58 pm

I don’t really know why we saw the dropoff this past month. I was just speculating. And it is unfortunate that adaptation to higher gas prices happens so quickly. Certainly some are impacted more than others, but there are way too many that put their foot down firmly and grit their teeth and say “I’m going to drive my (fill in the blank) and that’s that!”. I truly do hope that as all of these electric and plug-in hybrid vehicles are rolled out to other parts of the country, we will see the demand ramp back up. Perhaps more slowly now that there have been many more real world experiences shared, and some may realize that a LEAF will not do what they need it to do. But I strongly feel that there are many, many, many households around the country that the LEAF would be the perfect vehicle for. And if not, perhaps a Volt or plug-in Prius. They will help the entire segment move in the right direction.

Reply

Sasparilla August 19, 2011 at 9:39 am

I think you’ll be proven right as well and I hope you are.

This idea that Chevy dealers are sitting on Volt inventory seems crazy (dealers were requesting 5-7 times the vehicles they could get prior to production being paused to retool for 60,000 Volts a year on the line). I did read that the group that created the report dumping on the Volt recently was the same group that created a report saying a Hummer was greener than a Prius -so they may have some sort of a political axe to grind there.

http://green.autoblog.com/2011/08/16/potential-chevrolet-volt-buyers-already-losing-interest/

Reply

indyflick August 18, 2011 at 9:05 am

There are presently 265 LEAFs listed in dealer inventories as of this morning. We know some of these vehicles are actually awaiting delivery, to the owners who reserved them, but show up as in inventory for the time being. At any rate, 265 would be the “high water” mark of LEAFs in inventory. There are 750 Volt’s listed in dealer inventory. So there are more than 2 ½ times as many Volt’s in inventory presently than LEAFs.

I understand Fox News have been calling the Volt a failure this week, for the very reasons you point out. These sorts of reports, I believe, are premature and can become a self fulfilling prophecy.

Nissan are selling the LEAF in many more countries than GM is selling the Volt. This should allow Nissan to achieve economies of scale much quicker and thus to reduce MSRP over time while maintaining margins. If they can get the MSRP down demand will certainly increase rapidly.

While at this point the anecdotal evidence is not stellar, I think we need to give it at least six to eight more months to play out. If sales flatten or decline through that period, then there’s cause for concern. I would like to see derivative products being announced based on these platforms. This is an indicator the OEM sees the platform and strategy as successful and has long term viability. Secondly, if inventories continue to grow, then hopefully we’ll see advertising and marketing programs to move those units.

Reply

Ernie Hernandez (LEAFguy) August 18, 2011 at 9:09 pm

Interesting. If you don’t mind my asking, what is your source for the inventory numbers?

I don’t watch a lot of television news and wasn’t aware of the Fox News reports. Many more individuals watch Fox News than read Living LEAF, so I don’t fear that we will much influence public perception. :)

Other products, I agree, will absolutely be helpful. The Infiniti EV will attract a certain buyer. The Tesla S another. The RAV4 EV and Ford Focus EV others still. And I also agree that as manufacturers can provide other vehicles based on these platforms, that shared cost structure should benefit both the manufacturers and the consumers.

I also think that failure is way too strong a word to use, although from what I understand, Fox is prone to the dramatic. For both vehicles mentioned on our article, and others coming out near term, as availability is broadened across the country, we feel that the demand of those markets will be more than enough to absorb current production capability in the near term.

Reply

Sasparilla August 19, 2011 at 9:28 am

Not surprising to see Fox doing this, I suppose. Fox seems to emphasize (or ignore) stories that play to the political sensibilities of its audience – whether that is climate change denial or pounding on GM whenever its possible (its a union based automaker that was bailed out by the government) and the Volt in particular, pounded on consistently by Mr. Limbaugh and Fox (when the opportunity presents itself) – the Volt been tied directly to the current President by Mr. Limbaugh (not sure about Fox), even though its was created and moved forward under the previous President, so it gets a stake in it whenever the opportunity presents itself.

Reply

indyflick August 21, 2011 at 10:43 am

Ernie, I used cars.com to check the LEAF and Volt inventory at the dealerships. There are numerous other sites but most actually use the car.com database.

With this story it appears some right-wing blogger claimed Volt sales have hit the skids and it’s not for lack of inventory. So Fox picks up the bloggers story and it bounces around the echo chamber for a few days. And that’s how Fox News manufactures news from their point of view over and over and over and over.

Reply

Ernie Hernandez (LEAFguy) August 22, 2011 at 5:17 pm

Thanks. cars.com while not perfect is an acceptable proxy for availability – and it also provides some comparable statistical info not readily available otherwise.

Reply

Keith C September 21, 2011 at 11:06 am

Here in Atlanta GA, there is a waiting list of 16 folks – where non-refunbable money down is required for the Volt. If one wants to travel out of state for a Volt, there is 2 or 3 available for actual purchase all along the east coast and Texas. Call the dealerships…. then you’ll see.

Chevrolet is requiring that the dealers keep a Volt in stock for demo purposes – thus accounting for the stock on hand but…. those demo vehicles are NOT available for purchase for a required 6 months (set by the manufacturer).

Frank Twohy August 18, 2011 at 10:13 am

Thank you for your thoughts. I live in the North County of San Diego and my local dealer in Escondido has had a white Leaf on the lot for a few weeks now. Last night I drove by to see if it was the new demonstrator car but it was not. It is for sale at a $7,500 mark up! The car on the lot is now over $42,000. Either the dealer is expecting the market to tighten or they have misjudged the demand. Right now I am happy I purchased mine when I did for the price I did. Maybe the market will remain high for the cars.
Frank Twohy

Reply

Ernie Hernandez (LEAFguy) August 18, 2011 at 9:10 pm

Frank, I believe that some dealers have yet to understand exactly what this market looks like.

Reply

Ernie Hernandez (LEAFguy) September 21, 2011 at 8:02 pm

Keith – welcome to Living LEAF.

I’m glad to hear that there is demand for the Volt – in any area of the country. We were aware of Chevrolet’s distribution of demo vehicles to dealerships, and know that it is a factor in consumer availability. We absolutely agree that Volt can provide for needs that are not met by the LEAF. Our hope is that both vehicles are met with unbridled success. As Chevrolet ramps up production of the Volt we will get a better understanding of real-world demand without restriction on supply. Thanks for your comments.

Reply

Leave a Comment

Previous post:

Next post: