What caused EV sales to go off a cliff in July?

So, is everybody out there waiting for the spiffy new editions of the Nissan Leaf and Chevy Volt? If EV-makers and proponents are waiting for those holdouts to show up, it could be a very long few months.

The website Inside EVs, which keeps track of monthly sales for all-electrics and plug-in hybrids in the U.S. and globally, has published its July numbers, and they’re abysmal: Only 7,102 were sold during the month, compared with 11,242 in July 2014. There are still six models for which numbers are not available — Ford’s Fusion Energi, C-Max Energi and Focus Electric; Porsche Cayenne S-E and Panamera S-E; and the Kia Soul EV — but even if  those cars come in at the same level as this June, the overall sales tally will still be well under last year’s pace.

For the first six months of 2015, a total of 61,449 EVs have been sold domestically, compared with 123,049 during the same period last year. Meantime, the rest of the world continues to outsell the U.S., thanks in part to generous subsidies in many European countries.

This marks the third straight month that U.S. EV sales have lagged the same month in 2014, and there’s a running debate about why. The dominant argument is that consumers are waiting to push their hard-earned money toward the next-generation Leaf and Volt, both of which are due out in 2017.

According to Inside EVs, the 2016 model year of the Leaf will have a 30 kilowatt-hour (kWh) battery, compared with the 24 kWh currently out there, giving the 2016 version an estimated range of 105-110 miles, up from the current 84. The range for the redesigned (and much more stylish) 2017 Leaf should be even better, and Nissan is testing battery technology it hopes will allow a future version of the Leaf to get 250 miles on a full charge.

Chevy Volt_20166The current iteration of the Volt can travel only 38 miles without recharging, but the 2016 model of the hybrid will be able to go 53 miles before the gasoline-engine kicks in, The Los Angeles Times reported Tuesday. On a full charge and full tank of gas, the range is 420 miles. Details about the redesigned 2017 Volt are sketchy.

The Times notes that the all-electric Tesla Model S has a range of 265 miles, but it costs $100,000. The cheaper EVs are, the generally shorter their battery ranges are. The 2016 Volt’s MSRP is $33,170 (without incentives), and the last iteration of the Leaf, the 2014, starts at $28,980.

Tesla’s upcoming Model 3, which is supposed to retail at $35,000 and is slated to be released in early 2016, is expected to have a battery range of about 200 miles. Tesla expects big things from its first “mainstream” EV. The Model S already is the hottest-selling EV in the nation so far this year, with 13,200 units sold, although only 1,600 were sold in July, compared with 2,800 in June and 2,400 in May.

The other splashy new release is the $30,000 Chevy Bolt, an all-electric that’s supposed to go on sale in 2017 and also has a range of about 200 miles.

So there’s a bounty of high-tech, much-improved EVs and hybrids hitting the market in the next year or so. But if sales remain flat even then, the depressive effect of low gasoline prices could emerge as the true motivator.

With the 2014 gas-price spike long in the distance (a gallon of regular was $2.64 Tuesday, compared with $3.50 a year ago), there’s little incentive for consumers to buy or lease a new electric car now, especially if they’re not sure they’ll have a battery strong enough to get them to work and back.

Sales of conventional vehicles are going in the opposite direction as EVs: The big automakers are on track for their first year of 17 million units sold since before the Great Recession. SUVs, crossovers and pickups led a strong sales month in July. “That segment of vehicles continues to be smoking hot,” Mark LaNeve, Ford’s vice president of sales and marketing, told the Detroit Free Press.

For perspective, more Chevy Silverados were sold in July (56,380) than the eight top-selling EVs combined that were sold from January through July (55,365).

If you’re shopping for a new or used car and want the benefits of cleaner-burning, cheaper, American-made fuels, consider buying a flex-fuel vehicle that can use E85. Check out to see which models are FFVs.

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Tesla continues to walk the tightrope

One simple slide in a PowerPoint presentation by a Tesla official at an auto convention in Washington this month did almost as much damage as Elon Musk’s rocket blowing up soon after liftoff.

JB Straubel, chief technological officer and co-founder of Tesla Motors, put up a slide on June 15 indicating that Tesla’s Model 3 would not “begin production until 2018.” This apparent delay set the new vehicle back from the previously announced deadline of 2017 and almost knocked the company for a loop. The website Inside EVs broke the story, as it were, and word of the PPT slide was repeated in countless news stories. The interpretation was clear: Once again, Tesla had been forced to postpone key product rollout.

Within hours, Tesla had assured investors and analysts that it was not changing its schedule. The $35,000 Model 3 will be available in 2017, as previously planned. “Contrary to speculative blogger reports, we still plan to show Model 3 in 2016 and begin production in 2017,” Ricardo Reyes, vice president of communications, tweeted. The statement about production in 2018 was said to refer to “full production,” an attempt at back-filling that many analysts viewed with a grain of salt.

Whether the reference to 2018 was just a typographical error or an inadvertent peek under the kimono, the controversy showed how delicately balanced Tesla’s position is, both in terms of meeting customer expectations and in raising money to continue its projects.

Missing deadlines would certainly be nothing new for Tesla. In February 2012 the company said its crossover Model X would be available by the end of 2013. In February 2013, it said it would be late 2014. In November 2013 the company announced that a small number would be available by the end of 2014, but actual deliveries would not begin until the third quarter of 2015. Everyone is waiting to see if this deadline will be kept. Meanwhile, speculation has increased that any delay in the debut of the Model 3 may be due to the resources that have been spent trying to get the Model X out the door.

The Model 3 is Tesla’s bid for the big time. The car is projected to have a range of 500 miles and would be priced at the aforementioned $35K, less than half of the $79,570 MSRP of the 2015 Tesla Model S. The Model 3 is intended to be a mass-market sedan that’s well within the reach of the average car buyer. Musk, Tesla’s flamboyant co-founder and CEO, hopes to sell 500,000 versions of the Model 3 by 2020, a feat that could put Tesla on a firm financial footing.

But there are pending obstacles. One is the Chevrolet Bolt, a plug-in all-electric that is the successor to the Volt, a plug-in hybrid. GM demonstrated the Bolt in a sample model this month and will also be priced in the $35,000 range. GM promised to have the Bolt on the market by early 2017, which would beat Tesla’s Model 3 out of the gate.

Whether electric-car buyers will be attracted to the Bolt – or whether they will wait for what will almost certainly be a superior product from Tesla – is a hotly debated question. “GM is ramping up to make 20,000 Bolts. Tesla is ramping up to make 500,000,” said one commenter to a Wall Street Journal story. “When a company names its new car the ‘Bolt,’ Tesla has little to worry about,” said another. But other readers cited GM’s superior service network, and the company’s long history of making money, while Tesla has only lost money.

One thing is certain: Tesla is building brand loyalty. A survey of 145 Tesla owners by automotive analyst Dan Dolev of Jeffries found that 85 percent said their next car would also be a Tesla, and 25 percent wouldn’t even consider another brand. Eighty-three percent said they would recommend Tesla to their friends, and a remarkable 89 percent said they would still buy a Tesla without the $7,500 federal government tax break. The owners also turned out to be not nearly as rich as expected. Almost 70 percent had previously owned cars that cost less than $60,000, including ones as modest as a $15,000 Toyota Highlander. They paid an average premium of 80 percent over their previous car when they bought a Tesla. As a result of the survey, Jeffries raised its target price for Tesla stock to $350 from its current $265.

The battery-producing Gigafactory outside Reno is moving ahead on schedule, with the first phase of the structure near completion and machinery is about to be moved in. The current phase represents only 14 percent of the planned layout. Once completed, the Gigafactory will be the largest building in the world, with a footprint of 5.8 million square feet and two stories of manufacturing totaling 10 million square feet. Panasonic, Tesla’s battery partner, is expected to send hundreds of workers to the site this fall to prepare for full-scale production. The factory will also employ hundreds of local workers.

Wall Street Journal columnist Charley Grant threw a wrench into the works recently when he wrote that Tesla is still burning through cash and probably will run out of money if the Model X does not sell as expected. He says the company should sell another issue of stock while the price is still high. He suggested that a price of $200, 25 percent below the current market rate, could raise $750 million and carry the company over to the introduction of the Model 3.

Whether the company will dilute ownership or take a chance that Model X sales will reverse its cash flow is just one of the many decisions Musk will be facing in the near future. One thing is certain: He will be balancing atop that high wire for several years to come.

10 people who turned anger into solutions for high gas prices

So we’ve heard from Americans who say high gas prices have disrupted their lives and their work. Let’s shift to the people who are more than mad as hell. They’re mad enough to turn their energy into action.

Among these 10 ideas, what’s the most practical for your life?


“I just ditched my old 1998 Volvo S70 for a used Prius, and it is so much more fun to fill a 10-gallon tank than an 18-gallon one. And have it last more than a week of heavy Los Angeles commuting. It’s still new to me, so I still kind of giggle every time I fill up the tank. I’m thrilled to put the money I save toward better things.”
— Jennifer

“We save a lot of money in the summer because my wife takes the bus to the south side of Madison to go to work, and I pick her up in the afternoon, about 4 miles south of our home. If I was to take her to work and pick her up, it would be 48 miles round-trip, morning and afternoon. The bus is cheaper.”
— Laverne F., Madison, Wisconsin

“As gasoline was so high for so long, I made a bio-diesel processor from a old electric water heater and made my own fuel for the oil furnace and my old 1984 GMC van with a diesel engine. I still received 21 mpg. Begging for grease was the hard part.”
— Willis W.

“I wish I had a good story for you, but my wife and I drive a plug-in Chevy Volt. We hardly ever stop at a gas station, except perhaps once every 6 weeks or while on an occasional trip. When we top the tank, it seldom takes more than 5 1/2 gallons, i.e. less than $20 worth of premium fuel. The main reason that we stop at gas stations these days is to get an automatic car wash.”
— David and Barbara G., Gaithersburg, Maryland

“Still wondering how to convert my 99 Ford Expedition to NG?”
— Gary S., Laguna Woods, California

(We’re checking around to find a SoCal CNG conversion business. Will update later.)

“I have not visited a gas station since September 2014, when I took delivery of my Tesla. However, I still pay for my daughter’s gasoline, suffer the financial cost, and contribute to the oil industry’s wanton environmental degradation. Savings at the pump could help me fund her college education.”
— Dr. George

“Go electric. I did and am receiving my Tesla next week. No more gas at all.”
— Bob

“Today we bought a 2014 Ford Focus, a flex-fuel vehicle which enables us to use E85 for fuel. A small contribution to energy independence.”
— David

“We need a blender pump [for ethanol] in every station.”
— Melvin M.

“I top off my cars with E85 when I can. I fill up once a month with a discount at Kroger. I am really pushing to get Kroger to provide ETHANOL pumps and shop at the same place!”
— Gerard R., Stone Mountain, Georgia


Incidentally, here’s a handy guide to flex-fuel vehicles on the market.

Will renewables survive the oil downturn?

The seven-month-long plunge in oil prices appeared to be enough to re-establish gasoline as the default fuel for motorists, while stunting the progress of replacement fuels.

But attendees at last month’s North American International Auto Show in Detroit would have thought differently. Prominently displayed were various alternative vehicles that have been making headway and are just building momentum in the auto market, so they may be able to shrug off the precipitous fall in oil prices.

Also exhibited in Detroit was the first generation of hydrogen vehicles from Japan, which are challenging both the gasoline monopoly and the electric car, which is much more popular in America and Europe. The Honda FCV concept car boasts a driving range of about 300 miles and a refueling time of just three minutes, marking another step forward for the hydrogen fuel industry. California, where the cars are to be introduced later this year, is already preparing its “hydrogen highway,” which will make the cars feasible for drivers. Toyota’s fuel-cell offering, the Mirai — which also runs on hydrogen — is also scheduled to hit showrooms this year.

Chevrolet has had middling success with its electric-gasoline hybrid the Volt, but the maker has another generation planned with its concept car, the Bolt. The car will be made of extremely lightweight material and will have an all-glass roof and aluminum wheels for further weight reduction. Its lithium-ion battery will give the car a range of 200 miles and a recharging time of 40 minutes for an 80 percent charge. The price of $30,000 is likely to expand the market for electric cars.

Analysts note that oil is not used much for electricity anymore. The 1980s are the benchmark and generally remembered as the “Valley of Death” for renewables. Wind and solar were undercut by falling oil prices and lost their place in the generation of electricity. At the time, oil was providing 17 percent of our electricity. Now it provides barely 5 percent, and wind and solar energy have not felt any effect from oil prices.

Of course, natural gas has largely replaced oil, and a drop in gas prices could cut into the advance of renewables. Gas prices have traditionally been between one-sixth and one-twelfth of oil prices but have uncoupled themselves in recent years. This could work both ways, since gas prices have not fallen by the same degree that oil prices have.

Gas still holds its edge, however, and this means the attempt to use natural gas as an oil substitute may not slow. T. Boone Pickens has had some success in switching long-haul trucks to compressed natural gas, and this effort may be slowed only a little by gasoline’s new low price. However, if natural gas prices fall as well, then it may be able to keep pace with lower oil prices. The possibility that cheaper natural gas might encourage the conversion to methanol as a gasoline substitute would also be encouraged by falling natural gas prices.

That leaves the big question of whether ethanol can survive in the face of falling gasoline prices. In the first place, low gas prices are not likely to last forever. Some analysts are predicting crude oil prices will probably bounce back to $75 a barrel in the near future. Second, ethanol is protected by the federal mandate that says each gallon must contain 10 percent ethanol. If falling gas prices encourage the purchase of more gasoline – which it already has – then ethanol consumption must climb as well.

Ethanol has been under fire recently from studies that say it competes with food resources. The latest is a report from the World Resources Institute in Washington, which argues that “There are other, more effective routes to get to a low-carbon world.” But the rapid development of cellulosic ethanol severely reduces the possibility that ethanol will compete with food crops. And the possibility that natural-gas-based methanol might begin substituting for ethanol makes the threat of competing with food crops even less.

Altogether, it appears that renewable energy and alternate vehicles are going to survive the dramatic fall in oil prices. Alternative vehicles and other related technologies are now too far along to be crushed by falling oil prices the way they were in the 1980s.

(Photo: The Toyota Mirai at the Los Angeles Auto Show in November. Credit: Vision Automotriz, Flickr)