Monday, July 27, 2015

Editorial: Why hybrid and EV buyers defect

A recent study by sales lead generator and occasional car reviewer seems to show that buyers of hybrid and electric vehicles seem to be defecting back to gas guzzling cars and SUVs in surprisingly large numbers. One might think that this is a bit shocking, but between the drop in gas prices earlier this year and the notoriously short memories of American consumers, the real surprise is that it took this long for this trend to start to appear. There are a number of factors playing a role in this phenomenon, not the least of which are lower gas prices and record incentives. Combine that with the fact that traditional fossil fuel powered care are becoming increasingly fuel efficient, and you have the makings of a movement back towards traditional internal combustion. However, this only covers a small part of why up to as much as 22% of hybrid and EV buyers are defecting.

Range and performance are still issues

Let's face it, aside from a few very custom or very pricey models, most hybrids and EVs are pretty lacking when it comes to performance. To add insult to injury, most EVs lack anything resembling a road trip capable range. And on top of that, the development has been at a rather glacial pace, with most manufacturers doing the absolute bare minimum in order to ensure compliance with state and federal requirements. This means that the EVs you can buy today are more or less the same as when they came out a few years ago. Even worse, the late entrants into the marketplace come with little to no improvement over those competitors that have been on sale for nearly a full model cycle now. Both the freshly arrived on the market Kia Soul EV and VW e-Golf have ranges that are barely any improvement over that of my Focus Electric, which first went on sale in 2012. If you were an early adopter and your lease on your EV is coming to term about now, you could very easily look at the market and come to the decision that it is ultimately more cost effective not to replace your EV with another one.

Of course, the outlier here is Tesla, with its phenomenal Model S sedan. That brute of a car delivers on the range, performance, and even luxury front like no other EV ever to come to fruition. However, the car is prohibitively expensive, even after all of the available incentives and oftentimes even affected taking fuel cost into consideration. If you are used to cars that cost around $20k, the Tesla is so far out of your league as to be laughable. Even for those accustomed to paying $50k for a car, a new Tesla is a bit beyond the comfort range and even the recently available inventory of pre-owned Model S sedans is still a bit out of reach, especially since they don't qualify for the incentives anymore.

Infrastructure is still scattered and chaotic, etiquette is lacking

Adding to the defection of EV owners is the absolute chaos of the current charging infrastructure. Unlike gas pumps, which are pretty universal in their design and take all forms of payment, charging stations seem almost to be scattered at random and by a dizzyingly incongruous array of providers. Each provider wants you to register with them before they will grant you access to their charging, even stations where there are no fees to charge. To make matters worse, maintenance of the charging stations can be spotty and it is not uncommon for there to be profuse amounts of finger pointing between the charging station provider and the property owner when it comes time to take responsibility for repairs. Further complicating matters, property owners get to set the rate for charging and some of them are downright cruel about it, tacking on access fees that drive charging costs into astronomical territory. Thankfully there is the crowd-sourced data on PlugShare to help bring some kind of order to the chaos, although even that information is not always updated in a timely manner since some stations can go months without being used since they are in such out of way places.

Further making the charging situation even less palatable is the absolute lack of consideration and etiquette exercised by so many. Conventional car drivers often park in spaces designated for EV charging, not taking into consideration that an EV driver needs access to that charger because of the comparatively short range. Even other EV drivers commit rather egregious crimes against their fellow EV drivers by parking in charging spaces without actually charging or if they do charge, hogging the space for hours after they are done instead of vacating the space to allow another vehicle to use it. The worst offenders are often the PHEVs, such as the Prius Plug-In, which gave comically slow charging and laughably tiny electric only range, but somehow are everywhere and often hogging EV chargers for hours. If you have a gasoline engine in your vehicle, you should always give deference to the battery only vehicles that rely solely on those elections as their only motive force.

Costs are still too high

While I mentioned costs earlier, that was in the context of the Tesla Model S. Now, I want to focus on the comparative cost of a hybrid or EV over its conventional counterpart. On average, comparable BEVs can carry as much as a $10k or more premium over their gasoline powered equivalent. Take my own Focus Electric, for example, which was priced at a rather hefty $35k when I got it. Even with all the incentives, totaling $10k in the state of CA, and the various niceties offered by local governments, the Focus EV commands a hefty premium over a gasoline powered version, which could be had for less than $20k equipped in a similar manner to ours. That still leaves several thousand dollars in premium on a vehicle that, by its nature, has a limited radius of use.

Conventional hybrids and PHEVs suffer cost premiums and do not have nearly the incentives available on them to be able to offset the cost like a BEV. Unless you drive an absolutely insane amount of miles a year, the break even point on a hybrid versus a conventional gas powered model is often between five to seven years, which is longer than the typical lease and much longer than many Americans keep their cars these days. With these kinds of premiums, it should be no surprise that hybrid and EV buyers are thinking twice before going down that path again.

Conventional cars are getting better

Without question, regular fossil-fuel powered cars have gotten significantly better. It is not uncommon for a diesel powered car to deliver hybrid-like fuel economy numbers and for conventional gas powered cars to hit 40 mpg on the highway. Those kinds of numbers used to be in the rarefied territory of hybrids only, but these days, through a combination of direct injection and an increasingly large number of gears in the gearbox, conventional cars are delivering amazing levels of fuel efficiency without sacrificing much of anything in the way of performance. Of course, not every driver is able to attain these kinds of fuel economy numbers based on their driving habits, but it is undeniable that across the board, there has been an improvement.

Up till now, it sounds like I am being pretty negative about EVs, but as an EV owner, clearly I believe that there is value to EV ownership. As an advocate, I believe it is important to recognize that there are flaws that need to be addressed and the large numbers of those individuals who defect from EV or hybrid ownership after giving it one go were largely people who wanted to experience the novelty of EV ownership, but did not believe in the greater values shared by the EV community. If we recognize which areas we need to address and continue to vote with our wallets as well as our voices, we can really make the most of the coming EV renaissance when $35k EVs with 200+ mile ranges will become readily available. By addressing some of the aforementioned shortcomings, we can be prepared to welcome the multitudes that will swell our ranks in only a few short years.

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