Electric cars: 'Plug-ins' look for spark in 2012

Automakers in 2012 will launch 13 plug-in vehicles, running on electricity alone all or most of the time. This is the year that will tell whether the electric car market has a roaring liftoff or a slow-rolling start, analysts say.

By , Staff writer

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    People pose for photos at an electric-vehicle charging station at the dedication of Electric Avenue on the Portland State University campus in Portland, Ore., last August.
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It's early yet, but 2012 is shaping up as a white-knuckle Year 2 for the makers of new "plug-in" vehicles, who have wagered billions that the appeal of new electric-drive technologies will surmount hurdles not only from a weak-as-a-kitten economy, but also from high sticker prices and a spate of unfavorable publicity.

No fewer than 11 automakers are launching 13 plug-in vehicles in all, ranging from tiny urban runabouts to sports cars and even station wagons. All will run on electricity alone for all or most of the time. Are consumers ready to plug into a garage charger or one at the local shopping mall if their car batteries are running low?

Nobody knows. It's a bold push toward an electric-drive world-without-oil – or at least a lot less oil. But this year will tell, analysts say, whether the launch is a roaring liftoff – or a slow-rolling start – for plug-ins.

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Americans have already purchased at least 2 million conventional hybrids that have gas and electric motors but no plug. But plug-in hybrids and all-electric vehicles have much larger batteries and electric motors with a tiny gasoline engine, if they have one at all.

Chevrolet leaped into the fray last year with its Volt, the first mass-market plug-in hybrid electric vehicle (PHEV), a sedan that goes 40 all-electric miles on a charge. It's powered by a big electric motor and a gas engine that recharges its battery. About the same time, Nissan launched its all-electric 100-miles-on-a-charge LEAF Hatchback.

Naysayers were hooting when sales for the two vehicles, projected to be 10,000 each for 2011, totaled only about 18,000. Yet most close ob-servers gave them a pass, saying production ramp-up challenges and Japan's tsunami, not lack of demand, were to blame. According to this view, the cars were available in only a few states, and buyers on waiting lists were itching to get their plug-ins.

But any excuses probably won't fly this year – the year plug-ins are supposed to "get real" – selling not just to movie stars and first-adopter zealots but to families and commuters in the suburbs as well.

So far, seven plug-in models are for sale: the two from Chevrolet and Nissan and other less widely available models from Mitsubishi, Daimler, BMW, and others. But new models will be hitting showrooms soon, according to the PluginCars.com website. Ford is rolling out its Focus EV; Toyota, its Plug-in Hybrid Prius and, later this year, its RAV4 EV. Volvo is offering a V70 PHEV station wagon; Honda, its popular Fit as an EV; and Daimler, its distinctive two-seater Smart as an EV; to name just a few.

Automakers have projected US sales of about 100,000 electric vehicles this year. But several analysts say it will probably reach only about two-thirds of that level, deflating an electric vehicle "hype bubble" so big it was bound to burst.

"It will be more of a slow ramp-up in sales of electric vehicles in the US, not explosive growth," says Kevin See, lead EV analyst at Lux Research, a Boston-based market research firm. "It's not that consumers don't want them – it's just that the cost of these vehicles is still so much higher than comparably equipped gaso-line vehicles – even with [federal] tax incentives."

John Gartner, lead EV analyst for Pike Research, a Boulder, Colo., market research company, is sticking by his prediction of three years ago that 2012 would be "make or break" for EVs. And while he, too, expects sales to fall short of automaker projections, they will be high enough.

"Despite a slower than expected start in EV sales, 2012 will likely see sufficient expansion in model selections and global availability of electrified vehicles to establish the category's permanency," Mr. Gartner writes. He expects 66,000 electric vehicles to be sold in the United States, more than a quarter million worldwide.

Permanency alone, much less 60,000 US sales, would be a big victory, even if sales are not on track to hit the "1 million plug-ins on US roads by 2015" target set by President Obama, says Bradley Berman, publisher of PluginCars.com.

"What this year will clearly show is that electric drive is a permanent category in the auto fleet," he says. "People who own these cars love driving them, despite a lot of naysaying from mainstream media. They're not dangerous, and they can satisfy the needs of the vast majority of drivers in terms of how far they go. And it's only going to get better."

What he means is that battery technology is improving and getting cheaper. But for now, plug-in owners are paying a hefty premium to be among the first to be able to avoid the gas pump altogether. A new Nissan LEAF owner will save $100 or more on gasoline a month at current prices. But at around $30,000 even after the federal $7,500 tax credit, it's still a lot of money for a hatchback. Surveys show consumers are willing to consider electric vehicles – but they want to pay in the low to mid-20s.

Electric vehicles also face a gale of bad publicity. The Volt endured a lab crash test last year, but weeks later the wreck caught fire because technicians didn't drain the battery system. It made hardly a dent for Volt enthusiasts. But in an election year, GOP congressmen jumped at the chance last month to hold hearings ostensibly on the safety of new electric vehicles promoted by the White House.

Some predicted a "Solyndra effect" following the bankruptcy in late January of Ener1, the parent company of Indianapolis-based electric car battery manufacturer EnerDel. The firm had spent $55 million of its $118 million Department of Energy grant.

"The bad publicity will hurt," says Mr. See. "The Chevy Volt fire was bad publicity and started a renewed interest in emphasizing the safety of batteries. It's not really fair to compare Ener1's failure to Solyndra ... but it will happen."

Even so, good things are happening for plug-ins. California announced last month it would require 15 percent of all cars sold in the state by 2025 to be zero emissions. That's a boost for plug-in or fuel-cell vehicles not only in the Golden State, but in other states that follow its air-quality rules.

Gasoline prices are rising, too, as the global economy improves and the summer "driving season" nears. "At current oil prices, electric vehicle sales will do just OK," says Lux's See. "But the equation definitely changes if gas prices go up."

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