Dec 1, 2010

Fleets likely to drive early demand for electric cars

To Willy Morales, the little Leaf electric car sitting on the Nissan stand at this year’s Los Angeles auto show “looks like the future.”

It's “like the stuff I used to see on the Jetsons,” he said, referring to the futuristic cartoon series he loved to watch as a child.

But while Morales admits being impressed by the idea of never having to buy gasoline again, he’s far more concerned about the idea of running out of power one night with his kids in the back seat. And he isn’t alone. So-called “range anxiety” is unquestionably the biggest obstacle automakers like Nissan face as they begin to roll out a new generation of battery-electric vehicles, or BEVs.
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Still, initial consumer interest in the Nissan Leaf has been strong. And General Motors reports solid demand for the new Chevrolet Volt, a plug-in hybrid that soon will hits showrooms in select U.S. markets. But George Peterson, head of the consulting firm AutoPacific, fears this initial demand reflects “greenies and early adopters.”

“Once those buyers have gotten what they want, we don’t expect sales to remain very strong,” he said.

A recent study by J.D. Power and Associates suggests that even by 2020, hybrids, plug-ins and pure electric vehicles like Nissan’s Leaf will likely account for no more than 7.3 percent of the global automotive market.

But senior J.D. Power analyst Dave Sargent said the one thing that could help kick-start the nascent market for electric propulsion — short of “a dramatic and sustained increase in gasoline prices” — is demand from corporations for electric vehicles in their fleets.
That means customers like Jeff Immelt, chairman of General Electric, which operates one of the world’s largest motor vehicle fleets. Over the next several years GE plans to convert half its vehicle fleet to battery power, including 15,000 Chevy Volts and perhaps 15,000 electric vehicles from other makers.

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