Listen to What Market Is Saying: EVs, Hybrids Are Flops

Electric cars are not selling anywhere near the volumes anticipated just a few years ago. With one exception, the same is true of hybrid-electric vehicles.

Advocates tell us it’s just a matter of time before buyers warm up to new powertrains, but that’s not what the marketplace is telling us.

There are more than 40 cars and trucks available in the U.S. with electrified powertrains, yet they account for only 3% of all new vehicle sales. This includes EVs, plug-in hybrids, strong hybrids, and mild hybrids, which includes the sub-category of e-assist cars.

These alternative vehicles are represented in almost every segment, including small, medium, large, luxury, SUV, cross/utility and even pickups. There are EVs and hybrids for nearly every purse and purpose, yet they still do not sell. The one exception is the Toyota Prius.

Back when gasoline was relatively cheap, supporters said acceptance of alternative vehicles would soar as oil prices began their inexorable climb. Yet, even when gasoline and diesel doubled, sales of these vehicles continued to hover around 3% of the U.S. market.

Sales may get even worse if oil prices continue trending downward. Now, proponents say consumers have to get used to the new technology. Some even speak disparagingly of American car buyers, saying they don’t understand the benefits of EVs and HEVs.

What alternative-powertrain fans won’t tell you is that EVs and hybrids are not selling well anywhere in the world. Not even where fuel prices are double what they are in the U.S., or where governments offer far more generous purchase subsidies than Uncle Sam.

When the original Ford Mustang came out, sales exploded the second the public saw the car. Of course, it was a sexy new design, which helps explain the frenzy. But shoppers also flocked to dealer showrooms when the first Chrysler minivans debuted. Despite their plain appearance, minivans met a market need.

It’s the same story with consumer electronics. The Blackberry and other devices caught on quickly as consumers fell in love with smartphones. Sales of the Apple iPad shot through the roof the moment they were available. Sales of EVs and hybrids would be red hot, if people really wanted them.

Here’s a very telling anecdote. For two years, Lincoln has offered the MKZ hybrid at no extra cost compared to the V-6 gasoline model. And yet the take rate on the HEV version is only 20%. Four out of five buyers reject the hybrid model even when they don’t have to pay extra.

These developments must make major manufacturers of EVs worry deeply about the significant investment they’ve made in the technology.

Nissan, for example, is building a plant in Tennessee that will be able to make 150,000 Leaf EVs a year. That means it must sell 12,500 units a month to use that capacity. Yet Leaf sales are running at a little over 500 a month.

The Chevrolet Volt is selling somewhat better, 1,680 units in May, but General Motors still must be losing a fortune on the investment it made in developing the car.

The bottom line is consumers just don’t want these things. Hybrids and EVs are a flop. Discounts and subsidies are not going to change public perception. If you listen to the market, the message is coming through loud and clear.

John McElroy is editorial director of Blue Sky Productions and producer of “Autoline” for WTVS-Channel 56, Detroit, and “Autoline Daily,” the online video newscast.