Friday, April 12, 2013

Obama Proposal Promises to Boost Accelerating EV Sales Into the Stratosphere!

Despite my "Rah Rah EV" attitude (someone accuses me of that nearly every day) I am not going to go out on a limb and say that March plug in sales signals the start of the EV sales finally gaining a niche in the American automotive market.

The sales are impressive but Tesla has basically compressed 2+ years of sales into the last 4 months and is still playing catch up.  Just as Mercedes and Lexus puts of sales every month, Tesla will continue to do the same and I think they will be #1 or 2 in the luxury car market by the end of the year.  Their car really is that good. They are very proactive in addressing the quirks of the car and this can only bode well for their future offerings.  Now, despite Musk's promises to the contrary, I dont think Tesla will ever offer a car for the masses. The Bluestar I am predicting will come out at $40,000 + and will still be more than most want to pay. Like other luxury nameplates, I expect Tesla to attempt a economy offering that will fail forcing them to go back to their bread and butter $70,000 offerings,  but!

Obama is proposing to increase the EV incentive to $10,000 AND allow dealers to get the money for the EV buyer. This allows an instant rebate at the time of purchase and allows everyone to get it without having to calculate whether they fall under the Alternative Minimum Tax rule.  I think this is a great idea but should ONLY apply to EVs only.  The Volt, I will grudgingly continue to accept it getting the $7500 as a tax credit but the push to EVs needs to be more goal oriented.

Another big benefit of the larger EV incentive is that it will really push lease rates into a much more affordable range.  the extra $2500 "could" make an 2 year lease $108 a month cheaper or $71.42 cheaper on a 3 year lease (assuming 23 and 35 payments respectively).  Of course automakers could simply lower the residual to mitigate that savings but this allows fence sitters to gain that EV driving experience. Evan Fusco, a long time hybrid enthusiast states that after tooling around in his Tesla S 85, his previously beloved hybrids (Prius and Highlander) seems like "antiques" as stated (around 30:00 or so, give or take a minute...) on a recent "What Drives You" Show #116.  I share his sentiment as my Prius (which I used to brag was so quiet) seemed like a 30 year old rattle bucket after driving the LEAF.

A new LEAFer in Seattle who was hesitant to go electric is now a full convert after a month (i am guessing it really only took a few days) driving something that cannot truly be described. It can only be experienced!

All of this really points to a few things;

1) Incentives for EVs cant continue forever. Oil is simply too powerful to let it go on, so getting critical mass ASAP is vital and gives automakers incentive to put real money and factory time into getting the volume necessary to drive research and reduction in costs.

2) Word of mouth is what will ultimately drive EV sales. Its a bit of a foregone conclusion that Automakers are simply clueless on how to market EVs. Whethers is Nissan's "Polar Bear Hug" or Tesla's "$500 financing" the approach is not selling cars. The cars are selling cars but that cant be done until its in someone's driveway.

3) We preach Environmentalism but we ignore the real impact that oil has on our long term survivability.  Accidental, unknown and unintentional leakage of motor oil from passenger cars alone is responsible for dumping the equivalent of the Exxon Valdez into Puget Sound every SIX YEARS. IOW; we are in the process of our own Gulf Oil Spill and NOTHING is being done about it... oh wait!  There is a new program "Dont Drip and Drive" that provides FREE inspections and significant discounts for any repair needed to fix the drip.

The media blitz has been going on for a week now and it remains to be seen how many of the estimated 2.5 Million leaking gas powered cars will take the time to get their car in...

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