The promise of more technology advances for the automotive world was on display in a recent article on the Ars Technica website. As the feel-good story goes, an owner of a Chevy Volt, the plug-in hybrid vehicle made by General Motors, took it upon himself to hack into GM’s OnStar site to create a data-sharing site for Volt owners.
Not to worry, however – no lawsuits were filed. In fact, GM eventually built an official cloud-based platform for that exact purpose. All ends well, with faith in the entrepreneurial spirit never in doubt.
Equally as important is that this happened with a Volt, the intimation being that hybrid vehicles and ultimately, fully electric vehicles are the inevitable future. You may remember a year ago when Google (GOOG), which has put its money where its mouth is with its electric car investments, declared that electric, plug-in, and hybrid vehicles could make up as many as 90% of cars on US roads by 2030.
Given the buzz surrounding the recent choice of the Tesla Model S electric vehicle as Motor Trend’s 2013 Car Of The Year, it may be time for investors to ask, where are we with all this then?
A useful reality-check was authored last Monday by Vaclav Smil on The American, the online magazine of the American Enterprise Institute.
Smil lets the facts speak for themselves: Look at the Volt, for example. While GM had a record month selling nearly 3,000 of the vehicles, that success is extremely relative. Expectations that it will sell 20,000 Volts is still less than half of the targeted total of 45,000 cars set by GM, and more importantly, a whopping 0.15% of the total estimated 12.8 million vehicles that will be sold overall in 2012.
In addition, this past September saw Toyota cancel its plans to mass-produce its mini-electric eQ city car just a few days before it was to make its debut at the Paris Motor Show. As Smil posits, if a company that has been in the forefront of innovative design and high-quality production can’t make it work, how will anyone else succeed?
At the time, Toyota’s vice-chairman put the entire outlook rather bluntly: “The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge.”
As Smil writes, the technical success of electrics comes down to batteries, and the lithium-ion battery, despite its flaws, is still the only relatively lightweight commercial option.
And so here we are, after a 1980 report on electric cars forecast as many as 11 million to 13 million fully electric cars on the road by 2000 with about 50,000 of them currently licensed to operate. Undaunted, President Obama hasn’t backed off his pledge of putting a million electric cars on the road by 2015. Just 950,000 to go.
Not so ironically perhaps, the struggles of electric vehicles to get up to speed come as US automakers have expressed renewed confidence in the strength of their market. If expectations by GM that the industry will sell 14.5 million electric vehicles come true, that would mark the highest sales figure in five years.
Automakers have cited the recent strength in the housing market as contributing to giving consumers more confidence to make big-ticket purchases like autos.
Stocks of automakers and related parts and accessories manufacturers have also shown recent strength. The That New Car Smell motif has risen 5.2% in the past month , and the Used Car Tune-up motif has increased 4.8%.