EV Sales Up In 2014, But Electric Cars Face Two Major Challenges

electric vehicleIt’s heartening news for the green crowd: Sales of electric vehicles were up another 23% in 2014, selling almost 120,000 units. The Nissan Leaf led the pack, followed by the Chevy Volt, the Tesla model S, the Toyota Prius PHV, and the Ford Fusion Energi. Plug-in electric vehicles ended the year with a 0.39% share of annual U.S. sales, which may sound piddling, but overall the trend is upward. However, before sales can significantly increase, EVs have to overcome a couple of serious obstacles.

Although sales in 2014 increased over the prior year, they did not continue the incredible trajectory represented by the 85% jump between 2012 and 2013 sales, which was spurred on in part by high gas prices. In 2014, gas prices began to plummet, and although sales of EVs haven’t declined, the lower prices could prove to be a major stumbling block. It has already affected hybrid models, whose market share dropped to 2.2% in December, the lowest since October of 2011. Electric models were at .5% in December–well in the throes of the oil-price slump–which was higher than their average annual share.

What makes cheap gas attractive isn’t necessarily inertia or an anti-green sentiment on the part of potential buyers: it’s the difference in the price of the cars themselves. Because batteries are extremely expensive, electric models, like hybrids, are priced significantly higher than their run-of-the-mill, gas-guzzling cousins.

Traditionally, there have been two main selling points for these cars: The environmentally friendly, helping-the-planet factor, which is a good feeling but rather intangible financially; and the money-saving angle: Spend a little more money on the green model, the thinking goes, and you can laugh all the way past the pump, where the poor slobs fill up their tanks yet again at usurious prices while you charge up your EV in the comfort of your own garage, for pennies. However, the extra several thousand dollars on the sticker becomes harder to justify when gas prices are so cheap that making back your investment might take a couple of decades, which is a bit past a typical car’s average lifespan. There are gas models out there now that get high mileage already, so it’s even harder to justify the extra expense.

The other major hurdle is infrastructure. While there are 125,000 gas stations in the United States, there are only 151 Tesla Superchargers. EV buyers are understandably bothered by “range anxiety”, the fear that they may get stuck somewhere if they run out of battery power. There are some very useful websites and apps like Plugshare, which maps the closest plug-in stations, including private chargers that can be shared by members, public chargers, and even superchargers. In some areas, this can still be a concern, though: According to Plugshare.com, the city of Greensboro, North Carolina, for example, with a population of 277,000, has only four public charging stations. One is at the airport, and the other three are at car dealerships. How confident would you feel driving your Prius into the BMW or Nissan dealership for a charge?

Fortunately, strides are constantly being made to improve infrastructure and battery technology, as well. Tesla, one manufacturer who has enjoyed a consistent sales boom (its high-end models are purchased by people who are less concerned about price and can afford to go for a vehicle based solely on its environmental friendliness, or simply for the fact the Tesla makes snazzy, high-performance cars that are fun to drive), is building its Gigafactory plant in Nevada to improve battery efficiency and to reduce production costs. And engineers continue to pursue the ultracapacitor, a lightweight power storage and discharge unit that would alleviate the need for a cumbersome, expensive battery. The technology is out there, and it’s coming soon. And with no guarantee that gas prices will continue to fall, especially since oil rigs are liberally shutting down, reducing supply to get more balanced with demand, electric vehicles are still a good bet for the future.