Are Electric Vehicles, Hybrids Really Losing Their Shine? We Provide Context To Claims They Are

It’s happened every year like clockwork: slow sales figures for plug-in and hybrid cars over the winter months cause a news outlet, industry insider or analyst to claim that electric cars are a doomed failure and will never reach mainstream appeal.

These dark predictions often claim that low gas prices, high plug-in sticker shock and range anxiety mean that even those interested in the financial or environmental benefits of driving a plug-in or hybrid car simply can’t make the case for switching from their regular car.

Is there a perfect storm for bad EV sales right now, or is something else going on?

Is there a perfect storm for bad EV sales right now, or is something else going on?

A few months later in line with a general upswell in automotive sales as winter turns to spring and then summer, those sales fears are put to bed.

This year, a new claim has come to our attention, courtesy of Edmunds.com, an established and well-respected site. Using readily-available sales data from current and previous years, Edmunds says that electric and plug-in hybrid sales are at the lowest they’ve been since 2011. What’s more, it claims, early adopters who leased their cars are returning them to dealers in exchange for gas-guzzling SUVs at the highest rate it has ever seen.

Are owners abandoning plug-in cars at the dealership for SUVs instead at lease end?

Are owners abandoning plug-in cars at the dealership for SUVs instead at lease end?

But with loyalty rates (the number of people who trade in a vehicle for a similar one) for alternative-fuelled vehicles for 2015 claimed to be at 45 percent — the lowest they’ve ever been and a 15 percent drop from the 60 percent of 2012 — and headlines already proclaiming the end of the electric car, should you worry?

Here at Transport Evolved, we’ve got some context to provide on the lower sales rate and the apparent way in which EV owners are leaving plug-in cars for traditional gas-guzzlers instead. Read on to find out more.

Newer, better models coming soon

The data doesn’t lie: year-to-date new plug-in car sales figures for both the Chevrolet Volt and Nissan LEAF — America’s top two plug-in vehicles — are significantly down on this time last year. Year-t0-date figures to the end of March show the Volt down by 48 percent over the same period in 2014, while LEAF sales are down 21.2 percent over the same period.

The 2016 Chevrolet Volt is causing many would-be owners to hold back.

The 2016 Chevrolet Volt is causing many would-be owners to hold back.

Without context, that figure seems a worrying, dramatic drop. But both the Chevrolet Volt and the Nissan LEAF — currently sold in their first-generation guises — are both getting a little long in the tooth.

Indeed, the Chevrolet Volt’s massive drop in sales can be attributed to the upcoming second-generation 2016 Chevrolet Volt. Unveiled in January at the 2015 North American International Auto Show in Detroit, the 2016 Volt will go on sale late summer with an expected all-electric range of 50 miles per charge — far higher than the current 39 miles of the outgoing 2015 model year.

With Chevy now offering big discounts on outgoing model year Volts, there are admittedly some bargains to be had for those who don’t mind a first-generation car just as the second-generation model arrives. Most buyers however, are holding out for the 2016 Volt.

Nissan meanwhile, is expected to announce its second-generation LEAF later this year or early next. Due to arrive as a 2017 model-year car, it is predicted that the second-generation LEAF will feature a greatly improved battery pack capable of offering at least double the range of the existing LEAF and be more ‘mainstream’ in its appearance. As a consequence, those who have decided to stay with an electric vehicle are likely delaying their purchase decision or extending their lease another year to take advantage of the new models.

New cars like the upcoming 2017 Chevy Bolt EV are also affecting sales right now.

New cars like the upcoming 2017 Chevy Bolt EV are also affecting sales right now.

Then there’s the Chevrolet Bolt. Unveiled at the same time as the 2016 Chevrolet Volt, the all-electric 2017 Chevrolet Bolt is expected to offer around 200 miles or range per charge, and will replace Chevrolet’s ~80-mile Spark EV as its all-electric model.

The impending launch of these three new models has dramatically affected sales of both the Volt and the LEAF, not only because they provide the logical upgrade path for existing owners, but because no one wishes to be the person leasing a 1-year old first-generation car when everyone else is picking up their faster, longer-range second-generation model.

It’s also worth noting that the LEAF and Volt account for the lion’s share of all plug-in car sales, with makes like the BMW i3 and Tesla Model S coming in third and fourth place. While other plug in care are available, their sales figures — often in high double or low triple-digits — have little impact on overall plug-in car sales.

Early adopters…

As with any new technology, early adopters tend to be more tech-savvy and knowledgeable about the product they’re buying than those who come in a second-wave behind them.

In the case of electric car buyers, those early adopters were folks who either had prior experience of electric and plug-in hybrid vehicles through first-hand experience with previous-generation cars, low-speed electric vehicles or home-converted plug-ins. They already understood some of the challenges facing them as electric car drivers in a gasoline world, and were more likely to be prepared for some of the negative aspects of plug-in ownership.

Early adopters are often more informed and many are already on their second plug-in car.

Early adopters are often more informed and many are already on their second plug-in car.

If we assume many of those early adopters purchased their cars in 2011 it’s likely that most would have opted for a two or three-year lease, swapping their cars in for newer models in either 2013 or 2014.

Those who transferred to plug-in hybrids from a hybrid — such as was the case for many Toyota Prius owners during 2012 and 2013 — the situation was the same: those familiar with the Prius Hybrid opted for the Prius Plug-in Hybrid since they were already familiar with and knowledgable about the brand and hybrid technology.

…vs second-wave

By contrast, second-wave adopters are those who are coming for reasons other than a liking for the technology itself or the desire to be first. In the case of electric and plug-in hybrid cars, they tend to have less background knowledge of advanced-fuel vehicles, and are often more motivated by financial concerns.

They’re also more likely to receive incorrect or incomplete information from the salesperson on what the car they’re looking at is capable of doing.

It’s those second-wave buyers who are more likely to find themselves with a car that doesn’t exactly meet their needs or find that their expectations of what a plug-in car can do at odds with their experiences.

Second-wave adopters tend to be less informed than early adopters, and often find themselves on the end of poor information from sales staff.

Second-wave adopters tend to be less informed than early adopters, and often find themselves on the end of poor information from sales staff.

As a consequence, when these owners turn back their cars, they’re less likely to trade in for another plug-in car, especially if their ownership experiences have been marred by incorrect or misrepresented sales chatter regarding everyday range, charging station availability, or day-to-day use.

Without asking those trading in their alternative fueled cars in for SUVs their individual purchase motivations, we can’t say for sure if we’re right. But based on anecdotal evidence, those whose expectations and sales advice painted all-too rosy a picture are often those who find themselves trading back to traditional fuels at lease end.

What that isn’t however, is a failure of the vehicles themselves: it’s a failure of the sales teams and the automakers themselves to educate buyers more fully about the reality of plug-in car ownership.

Unreliable charging networks

While it’s true that a single, overnight charge of most plug-in cars provides more than enough range to meet the daily driving duties of 95 percent of all Americans, we feel range anxiety and unreliable public charging networks have a part to play in the figures quoted by Edmunds.

Again, we’ve no hard and fast figures, but anecdotally, we’re encountering large numbers of second-wave and even early-adopters who are finding the reliability of public charging is completely destroying their ownership experience.

Charging station reliability -- and long queues to use them -- are also putting some people off.

Charging station reliability — and long queues to use them — are also putting some people off.

Ranging from finding charging stations broken or out of order on a regular basis to the time it takes to queue for a rapid charge in really popular plug-in areas like San Francisco or Seattle, some plug-in owners are discovering the hard way that their expectations for public charging infrastructure aren’t in line with reality.

Many early-adopters we’ve spoken to who several years ago were hardened electric car fans say they’re switching to plug-in hybrids or range-extended cars for their next vehicle. Those who bought their plug-in based on false promises made by eager salespeople meanwhile are finding themselves looking towards traditionally-fuelled vehicles to make up for their negative experiences.

Like dealer misinformation however, this problem isn’t caused by the cars: it’s caused false expectations and a lack of practical knowledge about the cars themselves.

Weather

It’s a small factor, but one we feel worthy of note. Electric cars sell themselves better during summer months than winter months. And given the large numbers of plug-in, all-electric and hybrid cars traded in for go-anywhere SUVs during the first three months of this year, we suspect the record-breaking bitter winter of 2014/2015 — which affected a massive part of the U.S. for months on end — has a part to play.

Most electric cars can handle snow, but there's a fair bit of placebo in play when you have an 'AWD' button.

Most electric cars can handle snow, but there’s a fair bit of placebo in play when you have an ‘AWD’ button.

That’s partly because electric car battery packs tend to offer less range in winter than they do in warmer weather — even on models with battery warming — as more energy is used to keep the cabin warm than would be used in summer. Unlike an internal combustion engine, where excess waste heat from the inefficient combustion process is used to heat the cabin, plug-in vehicles have to make their own heat for the cabin. Power for that has to come from somewhere, and that somewhere is usually the battery pack, reducing overall range.

Then there’s handling. While most electric cars are relatively well-behaved in moderately snowy conditions with a considerate driver and appropriate tires or snow gear, only the Tesla Model S is known for its winter road handling capabilities. And although we’ve seen videos of everything from a Nissan LEAF to a Smart ForTwo Electric Drive handling some pretty significant snowfall without a problem, there’s something about the word “All Wheel Drive” which causes even the most confident of drivers rethink their car choice when it’s thirty below outside.

Is there a crisis?

Which brings us to the biggie. Is there a crisis in electric car sales? Are people abandoning the dream of zero emission driving for the predictability and ubiquity of fossil fuels?

Edmunds says yes. We’re less convinced.

New car sales are still on the rise for the plugin segment.

New car sales are still on the rise for the plugin segment.

Compared to hybrid car sales in the early days of the Toyota Prius and Honda Insight, sales of all-electric and plug-in hybrid vehicles are significantly higher year on year. What’s more, there’s been a definite acceleration in new plug-in car sales year on year, with the only obvious anomaly being the (already explained) drop in new sales at the start of this year.

With the 2016 Volt due out in August however, expect that to change as new Volt sales accelerate towards the end of the year and perhaps price cuts to models like the 2016 Nissan LEAF come into force to encourage remaining sales to take place before unveiling of its successor.

That’s before you take into account the effect on sales of the all-new Tesla Model X crossover SUV, which is expected to begin deliveries some time in Q3.

Over the past four years we’ve seen a dramatic drop in costs associated with building plug-in vehicles as well as an improvement in battery technology and longevity. Lower build costs have lowered sticker prices while better battery packs entice buyers to opt for new rather than used vehicles. Consequentially, we’re seeing more used electric cars on the market than ever before.

But don’t mistake high numbers of used electric cars as a sign of a crisis. With more plug-in cars leased than purchased and new cars far more affordable than they once were, buyers are opting for new versus used.

As for buyer loyalty? According to a recent study by Experian, the average brand-loyalty for a new car is around 57 percent for the first year of ownership, dropping down by ten full percentage points by the time a customer has owned the car three years. The longer you own a vehicle, the less likely you are to be brand-loyal when you purchase your next car.

You tell us: is there a plug-in sales crisis?

You tell us: is there a plug-in sales crisis?

Taken in context, considering all the facts we have before us, we’re not convinced there’s a backlash or crisis in the electric car marketplace. Moreover, we’re not sure any drop in loyalty is the fault of the automakers directly.

But there is one thing we can say for sure: in order to help plug-in car adoption rates, the auto industry, advocates, charging providers and buyers all need to have a more honest, engaged discussion about both the strengths and weaknesses of plug-in car ownership to ensure that expectations are realistic rather than unobtainable.

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