Final Inspection

Keeping Tabs on the EV Market’s Pulse

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Want a barometer of the true underlying demand for electric vehicles as Nissan Leafs, Mitsubishi iMiEVs, Chevy Volts and the like begin rolling out in markets around the world?

Then keep an eye on Australia.

So many countries, including the U.S., are putting scads of money on the table to seed the market that it could be difficult to judge whether these new EVs are succeeding in their own right or simply beneficiaries of some huge discounting.

Just this week, the Obama administration signaled its support for legislation earmarking another $6 billion in EV money that would include subsidies to back installation of public charging stations, research and development and additional tax breaks for buyers.

This would be on top of the $2.4 billion already allocated for battery development and related projects and tax credits of up to $7,500 on EV purchases.

Similar incentives are on the books in several European countries and big markets such as China, as policy makers look to wean consumers off oil dependency and cultivate a domestic industry around what many believe will be a broad electrification movement by auto makers.

Not so Australia, though, which for now at least is declining to bankroll EV makers and buyers.

“The Australian government today has given a big fat zero to the idea of subsidies for EV buyers,” an obviously dismayed Nissan Australia Managing Director and CEO Dan Thompson told Ward’s correspondent Alan Harman in an email. “In the past 12 months, we’ve seen 10 to 15 other countries adopt EV-friendly policies, but the Australian response has been mute.”

General Motors hasn’t committed to selling the Volt in Australia yet, but the iMiEV, Leaf and Toyota Prius plug-in hybrid all are expected to be offered there.

Lately, analysts have become skeptical of near-term potential for pure battery-electric vehicles, saying costs are too high and driving range too low to win over many buyers without a game-changing breakthrough in technology or a serious and permanent spike in gasoline prices.

The Boston Consulting Group, for instance, predicts models similar to the Leaf and Volt will account for only 3 million new-vehicle sales annually worldwide in 2020 – unless aggressive government subsidies are maintained long-term to prop up demand.

It is unlikely Oz will hang tough on incentives once local manufacturers Toyota, GM and Ford are ready with their EV entries.

But if it does, the market could become the best real-world laboratory for determining bottom-line EV demand – perhaps quickly settling the debate between those bearish analysts and the electrification faithful.

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WardsAuto editors share insights and observations on the global auto industry.

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Dave Zoia

As Editorial Director, I oversee much of what goes into WardsAuto.com, enjoying a ringside seat that lets me observe up close just about every facet of the industry worldwide. I have covered the...

James M. Amend

James Amend is an associate editor at WardsAuto.com, covering day-to-day business and product news at General Motors. He also leads coverage of regulatory and environmental issues, as well as the...
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