August 2014 was a landmark month for Battery Electric Vehicles. The electric vehicle press trumpeted these achievements, for example.
The mainstream media however had a different reaction. Here are some of the headlines
- Time Magazine – Why Hybrid and Electric Cars Have Lost Their Spark
- LA Times – Electric vehicle sales are running out of gas
- Wall Street Journal – Demand Ebbs for Electric, Hybrid Cars
How can the highest EV sales on record draw such negative remarks?
The conspiracy theorist side of me says that EV detractors want to drown out the real story and fill everyone’s heads with negative stories. Very few average citizens read EV press articles, but they do read the Wall Street Journal, Time Magazine and the LA Times. The average citizen can be excused for believing EV’s have failed reading the headlines and articles. They will therefore be less likely to consider one in the future, why buy something that’s failing?
Facts or Lies?
The articles do quote statistics which show that the market share for electric vehicles dropped in August compared to July. Auto sales boomed in August so why didn’t EV’s boom as much or more?
The manufacturers are making as many EV’s as they can given their current EV factory capacities, because of this dealer inventories are very low compared to conventional vehicles. Due to higher inventories of conventional vehicles, peaks in demand are met more easily. Simply put EV sales have grown a lot in 2014 and manufacturing capacity has failed to keep up. BMW increased their capacity by 50% prior to launching the vehicle based on its pre-order backlog, even that increase is insufficient to meet demand. Manufacturers do need to step up capacity continuously while demand is strong or they will cause EV’s sales to stall out.
How Time Magazine explained away the record LEAF sales
The LEAF had its best sales month in its 3 year history, sales increased 32% year on year, here is what the Time magazine had to say about that record.
the increase in sales of the Nissan Leaf is mostly an anomaly
They went on and ‘blamed’ the record on Nissan’s recent marketing efforts offering a 2 year free charging program called “No charge to Charge”. Successful EV marketing is apparently an anomaly. Now that’s bias if I ever saw it!!
Nissan have experimented with several marketing campaigns since the vehicle introduction and appear to have found a winner with “No charge to Charge”. The program is currently on offer in just 12 markets in the US, it is not a national marketing campaign which shows its strength if it is able to push the needle on national sales figures.
What is really going On
EV Adoption currently represents less than 1% of the vehicle market and apparently isn’t rising as fast as one might expect. Many articles have indicated we are at the tipping point where EV adoption will take off. This isn’t true and only serves to raise false expectations, we haven’t even entered the classical definition of early adopter yet!. Rogers in his book “The Diffusion of Innovations” described how innovations are adopted by the marketplace. The ‘Hockey Stick” increase in adoption can’t be expected until we reach the early majority stage. We are currently in the first stage which Rogers calls “Innovators”, early adopter stage comes when 2.5% of the market is attained. The increase in adoption in the early stages is very shallow as one can see in the chart above, our current position in the adoption process is indicated by the red arrow. Success in the market is not guaranteed in these early stages, a “Chasm” exists that needs to be overcome to launch adoption into the later stages. It is quite possible that if demand for EV’s can be thwarted by Fear, Uncertainty and Doubt (FUD) thus preventing transition over the chasm then EV’s may never achieve market dominance. There are powerful forces at work that would love to see the EV fail to achieve market presence.
Changing the car fleet from one technology to another will take decades, we have to learn to be patient and persistent.
Expect more negative articles.
As we come down from the summer car sales bounty I’m sure we’ll see more negative articles as EV sales moderate during historically lower car sales months. Just be sure to read between the lines.