Consumers must pay a premium for electric vehicles with the expectation that the savings in fuel costs will negate the higher sticker price and the electric vehicle purchase will eventually be a money-saver.
But consumers are reluctant to pay that premium. Due to many technological improvements, batteries are now lighter and have greater storage capacity, but still they only have a life expectancy of 124,000 miles and a replacement cost as high as $15,000.
The Projections Despite the government’s best attempt to promote electric vehicles; the market has been reluctant to respond. Power and Associates projects sales of HEVs and PHEVs will reach 1.67 million units by 2020 and account for nearly 10 percent of the market share.
In the United States, sales of HEVs and PHEVs accounted for only 2.8 percent of vehicles sold in 2009, and that number is expected to drop to 2.5 percent for 2010—less than 300,000 units. This includes the Administration’s purchase of nearly one-fourth of Ford and General Motors hybrid vehicles since President Obama took office. The long-term projections for hybrids are slightly more promising, but not so for battery electric vehicles. BEV sales, however, will make up less than 1 percent of all vehicles sold in 2020 at just over 100,000 units. Obstacles The primary reason for low electric vehicle demand is cost.
The federal government has also announced tighter rules on fuel efficiency that stand to benefit electric vehicles.
In April 2010, the National Highway Traffic Safety Administration and the Environmental Protection Agency increased the average fleet-wide fuel economy requirements to 34.1 miles per gallon (MPG) by 2016.
Even factoring in the environmental benefits by pricing the reduction of carbon dioxide (CO2) emissions, the Volt is still not a good purchase.
Estimates on the price of CO2 fall in the range of to per ton.
Advertising 93 MPGe is particularly questionable, since the car can drive in electric-only mode for only 25–50 miles in temperate conditions.
Hills and extreme temperature conditions reduce even this moderate range as they put additional strain on batteries.