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Thursday, September 4, 2014

Electrified car sales stall as buyers back away from hybrids


By Charles Fleming, September 4, 2014

Tesla electric vehicles
Intense coverage of Tesla and electric vehicles may give the impression sales are soaring. They're not.

Sales of electrified vehicles in the United States have slowed dramatically in the last year, causing concern that the emerging technology has lost its charge.

A study by online automotive research company Edmunds.com suggests a stall in the market for electrically powered cars, especially hybrids.

“This was a market that was supposed to grow, relatively rapidly, as people embraced these new technologies and more brands began selling these models,” said Edmunds senior analyst Jessica Caldwell. “That hasn’t happened.”

Caldwell’s research showed substantial gains in the pure EV and plug-in hybrid segments -- 35% and 44%, respectively.

But the study also showed a drop in traditional hybrids -- by far the largest segment in the electrified vehicle market -- that offset sales gains in pure EV and plug-in hybrids sales, which remain a tiny fraction of the market.

“The EVs and plug-ins have shown growth," Caldwell said, "but it’s like a rounding error in the whole electric drive vehicle market.”
The slowdown in traditional hybrid sales comes despite the success of the Toyota Prius -- the bestselling car in California last year -- and manufacturers’ continuing efforts to introduce more hybrid models.

Further, it comes during a year in which sales of all cars have been booming. The industry just reported its best August in more than a decade and has gained about 5% so far this year compared with the same period last year. Sales of all electrified cars totaled 408,516 vehicles between January and August, down just a tick from the 408,694 vehicles sold during the same period last year.

Of that total, the bigger percentage gain came in plug-in hybrids, which grew from 28,241 vehicles sold to 40,748. Battery-powered EVs -- with no gas engine at all -- also grew, from 29,917 vehicles sold to 40,349.

But traditional hybrid sales fell from 350,530 vehicles from January to August last year to 327,418 during the same period in 2014.

The market share for electrified vehicles also fell. So far this year, they account for 3.66% of all vehicles sold, down from 3.84% for the same period a year ago.

This may seem counterintuitive to Los Angeles drivers, Caldwell said.

“Los Angeles is a different place,” Caldwell said. “What we see here isn’t what’s happening everywhere. The rest of the country isn’t on the same page. And they buy a lot of cars too.”

Electric cars and hybrid also have enjoyed intense media coverage as automakers seek to boost fuel economy and regulators look to control tailpipe pollution. On Wall Street, meanwhile, Tesla’s stock has soared. All that may create the impression that sales are soaring.

“People see more and more of them on the road, and they read about Tesla and its supercharging stations, and they think this technology is taking off,” she said. “But the entire electric drive vehicle market is just over 400,000 vehicles sold – during a period when there were over 11.1 million total vehicles sold.”

Caldwell said stable gas prices may have contributed to a slackening in interest in non-gasoline electric hybrid and plug-in vehicles. So have the increasingly good fuel-efficiency levels of gas cars in general.

Buyers are looking at the higher average price of electric vehicles, Caldwell said, and deciding that "the math doesn't really work out."

Could strong sales in the fourth quarter reverse the trend?

Not likely, Caldwell said.

"The latter part of the year, as the weather gets colder, there tends to be more SUV and truck sales," Caldwell said. "So I don’t expect to see a run on electric vehicles."