Do Americans Have An Appetite For Electric Cars?
AILSA CHANG, HOST:
GM says it is cutting production in part to focus on electric vehicles and also driverless technology. But does the American car-buying public actually have an appetite for these cars? Well, for more on that, we reached out to auto writer John Voelcker at the LA Auto Show. Until recently, he was the editor of Green Car Reports. He told us fully electric cars and plug-in hybrids still only make up between 1 to 2 percent of total car sales in the U.S. And he says GM's offerings - the Chevy Volt which it's discontinuing and the Chevy Bolt - have not sold that well.
JOHN VOELCKER: The sales of sort of 20,000 or 30,000 cars a year are not insubstantial. But GM sells hundreds thousands of full-size pickup trucks and other utility vehicles. So they make up a very small portion of GM's overall sales.
CHANG: So what do you think needs to happen to get more Americans to buy electric cars? I mean, is it just about price point?
VOELCKER: Yes. The important figure is that the cost of the battery cells used in electric cars goes down roughly 7 percent a year every year, and it has done for 10 years or so. There's a - sort of a holy grail which is a hundred dollars a kilowatt hour. When electric cars reach that price, which they will likely do on average in the early 2020s, then a plug-in car with a range of, say, 200 miles will be very little more than the price of a comparable vehicle with a combustion engine. And that's the point at which the mass market will start to pay attention and say, OK, this is a viable alternative.
CHANG: So it sounds like it's only a matter of time before the price becomes stomachable for the mass public.
VOELCKER: That's correct. And then the mass public will start to pay attention to some of the benefits of electric cars that manufacturers so far haven't really been touting because they're still - at best, they break even when they sell one.
CHANG: So now GM says it wants to focus on zero-emissions cars. Does that strike you as odd or ironic for a company that's been making huge profits selling trucks and SUVs, gas-guzzling vehicles?
VOELCKER: No, I don't think it's unusual at all. In the auto industry, one of the fascinating things and one of the things that will keep me writing until I retire is that no one really knows by 2030 with the pace of technological change what the industry is going to look like. Will it sell more cars or less? Will we be taking half our rides in shared autonomous vehicles that belong to somebody else?
VOELCKER: GM has to place its bets early. They know that some of their bets are not going to pan out. But the company is smart enough to want to avoid what happened to it 10 years ago when it was simply unable to close underutilized, unprofitable plants fast enough to keep up with its haemorrhaging market share. That lesson is really wrapped into the company's DNA now.
CHANG: You're talking to us right now from the LA car show. What kinds of new electric cars are you seeing there?
VOELCKER: There are two companies that have made a splash. The first one is Audi, which has a car called the E-Tron GT, a luxurious, sleek, low, battery electric, four-door sedan that you can really view as a direct shot at the Tesla Model S.
And then the other one is a new startup company, one that's been around for several years now. It's called Rivian. And they have, among other things, raised roughly a billion dollars in capital and bought a disused Mitsubishi factory in Illinois. No one knew until now what they were going to put in. The answer turns out to be relatively expensive but very capable and luxurious long-range electric trucks, specifically a full-sized electric pickup truck and a full-size seven-seat electric SUV. And those were the other big introductions here in terms of electric cars.
CHANG: I guess we'll see if those catch on. Auto writer John Voelcker at the LA Auto Show, thanks very much.
VOELCKER: Thank you. Glad to be here.
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