Why aren't electric car sales in the US any higher?

Electric vehicles require less maintenance and more time to sell, so car dealerships have business reasons to be reluctant about selling electric cars. 

Stephen Lam
A Tesla Motors Model X electric sports-utility vehicle opens its falcon wing doors between two cars on stage during a presentation in Fremont, California September 29, 2015.

Electric cars, according to the former chairman National Automobile Dealers Association, are like broccoli. Considering the facts, he might be right.

Despite the avid enthusiasm of environmentalists, existing owners, tech luminaries, and President Barack Obama himself in promoting them, electric cars are not selling well in America.

But part of the reason for the lack of interest, as reported by Matt Richtel of The New York Times, is the reluctance among auto dealers themselves to sell electric cars.

Seven years ago, Mr. Obama called for one million electric cars to be owned by Americans by now. But only about 330,000 are on the road. Why? According to car-shopping website Edmunds.com, buyers are trading in used hybrid and electric vehicles for new SUVs at a higher rate than ever before, and only 45 percent of this year’s hybrid trade-ins have gone towards another alternative-fuel vehicles.

Analysts suggest the under $3-per gallon gasoline prices have something to do with the trend.

New-car buyers, however, have found that electric cars are difficult to buy at auto dealerships because models simply are not in stock and salesmen often lack technical knowledge. In some cases, salesmen have even tried to talk buyers out of electric in favor of fuel-efficient gas cars.

Chelsea Dell was looking to buy a Chevrolet Volt last year at a Salt Lake City dealership. When she arrived at her appointment to test drive the car, however, the salesman said it was unwashed and that he had prepared another car, a less expensive, gas-powered one, for her to view.

“I was ready to pull the trigger, and they were trying to muscle me into a Chevy Sonic,” said Ms. Dell told The New York Times. “The thing I was baffled at was that the Volt was a lot more expensive.”

But she did not yield, and ultimately took home the Volt.

According to a 2013 J.D. Power survey, electric-car buyers tend to be significantly less satisfied with their car dealers than those who bought traditional cars. Consumer Reports affirmed this finding after its representatives visited dealers around the country and encountered many that were unequipped to talk about electric-car technology.

For instance, when one of Consumer Reports’ secret shoppers asked about a Prius Plug-in at a dealership in Bayside, N.Y., the salesperson refused to show the car despite having one in stock.

In conclusion, the survey recommends buyers to do their own research about electric cars before going to dealers. “If you're shopping for a plug-in car – or any car, for that matter – do your homework and don't rely on the dealership for education about this intriguing technology,” it said.

Car dealers, nonetheless, have sound business reasons for not selling electric cars. For one, electric cars require less maintenance than fossil-fuel-powered cars, and dealers acquire the bulk of their profits from service departments. According to the National Automobile Dealers Association, dealers on average make three times more profit from car services than new car sales.

Insiders also say electric vehicles don’t offer the same profit margins, and take longer to sell because of all the necessary explanations, which in turn means lower monthly sales commissions.

So, electric cars may not be broccoli after all – they are just packaged like it. But car dealerships may not be the only factor suppressing electric-car sales. While local and state governments offer subsidies up to $10,000 for the purchase of electric cars, many don't publicize this information very well. Some buyers say they are unaware of the subsidies.  

A recent National Research Council report on obstacles to electric car sales concluded that prices are too high, battery charges too short, and there is a shortage of charging stations. 

And electric-car manufacturers themselves could do a better job in distributing information about electric models. A survey by researchers from Indiana University and the University of Kansas found that 75 percent of respondents’ had wrong answers when asked about electric car technology, consistently underestimating the benefits, The Wall Street Journal reported. 

"Most potential customers have little knowledge of [plug-in electric vehicles] and almost no experience with them," the report said. "Thus, it is often difficult for people to develop an interest in [electric cars], let alone decide to purchase one, even if it might be a suitable option for their transportation needs."

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