We’ve reached the electrified vehicle tipping point this month, though I concede that the numbers suggest otherwise. I believe there’s no going back now. Cars with batteries and plugs are the future and the future is coming fast.
The sales figures first. Canadians bought 6,170 plug-in cars through the first of September, notes Green Car Reports. That’s a tiny fraction of the 1.33 million new light vehicles Canadians purchased during that time, reports DesRosiers Automotive Consultants.
Plug-in sales, then, accounted for .005 per cent of all the cars, pickups, SUVs and vans sold from January to August. The top seller? Chevrolet’s Volt, with 2,098 sold so far this year, more than twice the 939 Nissan Leafs that Canadians bought during the same period. Pitiful, actually? Honda sold 5,737 Civics in August alone, 44,295 through the end of August.
But electric car sales are trending upwards. Volt sales will double this year over 2015, and Leaf sales will end 2016 with sales up around 50 per cent. Tesla’s Model S has stalled badly of late, but the new Model X SUV is gaining traction and surely will pick up the slack once Tesla sorts out a host of issues and can produce enough to meet demand.
Most important of all, the numbers tell us that plug-in sales surge as prices go down, battery range rises and shoppers enjoy greater choices. The latest Volt is a dramatic improvement over its predecessor and shoppers have noticed. Nissan also made significant improvements in the Leaf. New models, many with mainstream pricing, point to big and important developments coming on the electrified vehicle front.
Which brings us to two things: the upcoming Paris auto show, which opens to the public in just over a week; and Chevrolet’s Volt, which arrives in showrooms later this year.
More than 24 new EV models are expected to be unveiled in Paris, including highly-anticipated first looks at new EV models from Mercedes-Benz and Volkswagen. The European version of the Bolt will also have its debut in Paris, alongside the Opel Ampera-E.
The Volkswagen Group, still reeling from its Dieselgate scandal, is pinning its future on electrified
vehicles – including a Golf-sized EV due in late 2018 or early 2019. In Paris, VW is expected to say this new EV will have a range of nearly 500 km off a single 15-minute charge using a station with the required voltage. Volkswagen says it is targeting a lineup with 30 new EV models by 2025.
Mercedes-Benz’ parent Daimler, meantime, is expected to outline in Paris what the German publication Handelsblatt says will be its most radical restructuring since CEO Dieter Zetsche took over a decade ago. Electric cars will be the centerpiece of the new Mercedes.
Tangible evidence? An e-version based on the Mercedes GLC sport-utility vehicle. It will be unveiled in Paris during next week’s press days and will arrive in dealerships as early as next year. By 2020, Daimler will have electric models across its entire range, all with a range of 500 km.
Ah, range, and a related matter, pricing. Range anxiety – the fear that your plug-in will run out of juice and leave you stranded – and affordability have been the big consumer barriers to adopting EVs. Who wants a car that will drain a wallet and when it has drained batteries after 120 km of driving, will leave a person stranded on the side of the road? I’d say about .005 per cent of the population.
Which brings us to the Chevrolet Bolt. General Motors says it has a range of 383 km (238 miles) on a full charge and will be available for as little as $31,434 once $11,361 in Ontario taxpayer incentives are included.
Base price in Canada: $42,795. That for a four-door hatchback with decent cargo space, a rear vision camera, 10.2” diagonal colour touch-screen and Michelin self-sealing tires, all as standard fare.
The Bolt’s announced range is greater than the sleeker, more aerodynamic Model 3 – a car not due until the end of next year. Tesla says the Model 3 will have a range “in excess of 215 miles.” The Bolt may not
be as pretty as the Model 3, but it’s a real car, one going on sale very shortly and one that will be serviced by Chevy dealers all over.
To put into perspective what GM has done with the Bolt, Bloomberg has this breakdown: the Bolt will cost about $158 per mile of driving range, versus $294 for the Tesla Model S and $523 for the BMW i3. Bloomberg suggests the Model 3 cost/range mile is estimated at $163 (all figures in U.S. dollars).
Tesla, aside from the slippery Model 3 design (0.21 drag coefficient versus the Bolt’s sticky 0.32 Cd) has three very big advantages over GM and its Bolt.
First, Tesla’s brand is strong and rests on a foundation of very loyal customers and fans, along with institutional investors such as Fidelity, Morgan Stanley and Deutsche Band. These investors, which hold about 62 per cent of outstanding Tesla shares, refuse to sell and, indeed, continue to fund Tesla in various ways – from credit lines to share offerings.
GM’s brand, and that of Chevrolet, are relatively weak and continue to suffer from the many decades of GM failures which culminated in the 2009 bankruptcy.
GM also lacks a supercharger-type network charging infrastructure and that could crimp demand — though as many have noted, GM might very well dominate urban and fleet markets where a supercharger network is not so important.
But the charging issue is not a small one. Most of the conventional charging outlets, which the Bolt must rely on for now, recharge at a rate of about 40 km per hour (25 miles). Tesla’s Superchargers charge at a rate of 272 km (170 miles) in 30 minutes. Advantage Tesla. For now.
Third, if Bolt demand is as strong as many expect, GM may have trouble sourcing enough batteries from supplier LG Chem. Tesla says it will meet all battery demands through its Gigafactory in Nevada.
Nonetheless, I’d argue the Bolt is a game-changer for GM and for plug-in cars right across the industry. The Bolt has been getting rave reviews and will turn out to be the “halo” car the automaker hoped the first Volt would be but wasn’t. The Bolt is why Morgan Stanley has changed its view on GM to an Overweight rating from Neutral, with a price target of $37, up from $29.
The Bolt, I believe, will change the plug-in battery car conversation forever — as long as GM manages a clean launch, no small matter. It’s an affordable, long-range battery car that Canadians should be able to have for a monthly lease payment of around $400, depending on where GM sets the Bolt’s residual value after, say, four years.
The Bolt has dazzled road testers and has auto analysts re-thinking their view of GM. It’s why so many believe the Bolt is not just a shot across Tesla’s bow or a reason to sell your shares in Tesla, but a harbinger of an EV future that’s racing at us.
I think we’ll look back on September 2016 as the moment when we arrived at the plug-in tipping point. That’s how I read the evidence and I’m not alone.