New York Times: A Car Dealers Won’t Sell: It’s Electric

[jerry33]

However, I'm also a realist. I want to get everyone into EV's -- not just the environmentalists since there's not enough of them to solve the problem. Nissan know "consumers want more range". That's me! Nissan is responding to what people like me are telling them. This is about getting EVERYONE into EV's and short range EV's, while part of the solution, are far too small of a part. This is what Elon Musk has said. We don't want to make sacrificies to drive EV's. EV's, done right, mean less sacrifices.

The number one complaint I get at car shows is: 265 miles (210 km) is not enough. I want to drive to Houston (~400 miles / 600 km) without stopping as I do in my current car. Because it's not fun to run out, 500 miles (800 km) is about the minimum range to get people to accept an EV as a straight replacement.

Now people can argue all they want about how an 80 (practically 50 if conditions aren't perfect) mile range is enough, but you won't get the majority of the public to see anything but that a limited range like that is a sacrifice. The Leaf we have is strictly a second car and it just barely works as that. The only reason we have it is that Denise didn't want a large car, and since it costs as much as a CPO, it's only advantage is that there is no ICE.

Here in Texas probably 90% of the people either think that global warming is something cooked up by Al Gore to take their money from them, or that it will be solved through technology (without them doing anything) some time in the magical future. And none of them care what happens thirty years from now.

Promoting short range EVs is really 1970s thinking because the technology wasn't there and so the promoters had to do it. There's really no excuse for that now as it's far easier to convince people that 265 is enough to be practical, but that's still not nearly enough for the vast majority--based on responses I get at car shows--to consider an EV as a replacement.

 

[Mike Strauss]

When it comes to profit, the environment comes second, always. Sad

 

[Twiglett]

Fully agree with Jerry about the Leaf (or almost any short range EV). Its a great little car if all you do is drive around a city.
It can get from Austin to Dallas - if you plan extremely carefully and hope all the chargers (sorry, EVSE's) are operational.
But it takes more charging time than driving time and is a significantly longer and more difficult process than it should to be.

Convincing regular folks that <100 mile range is enough is a great deal of work for which most dealers currently have zero incentive to do.
Who can blame them when it's that much more work for so much less return.

 

[SarahsDad]

Reading this reminds me of this classic piece from Tesla Club Sweden:

Test drive of a petrol car - Tesla Club Sweden

My favorite part - describing dealerships as "Independent Car Repair Shops".

Well worth a read if you haven't seen this.

 

[gigglehertz]

About 3 years ago I was in a Mitsubishi dealership and they had an iMiev inside the showroom. It was the first EV I'd seen in person and I was curious about it, having not yet been educated on the subject. The first words out of the salescreep's mouth were "Oh you don't want that, it's a toy" before trying to steer me towards an ICE vehicle. It was clear they didn't have any respect for their own EV. After searching around online I decided I wanted to check out the Ford Fusion EV, but the local dealership said they didn't sell EV's and had no intention of doing so. Luckily there were 2 nearby Nissan dealerships that had at least one or 2 sales persons that seemed genuinely excited by the Leaf and enthusiastically pitched it, and both had about a dozen on the lot.

 

[macpacheco]

On range... And sales (market demand):
If Tesla could build a 400 mile Model S today and demand exploded all we would get is a mass of pissed off people with reservations.
And the reason the LEAF doesn't have 10x as much demand = the dealers don't want to sell it (i.e promote them).
Reminding. EVs are below 0.1% market penetration. If 1% of the current car owners were willing to buy an EV over the next year there would be year+ waiting lines.

As I understand Tesla is still production constrained. That means they need to invest on scaling up production and new features that increase average unit price (to further increase available capital for production increase and further R&D efforts).

Bottom line is EVs have enough range to sell at least 5x as much as today without longer range.

I fully agree an EV without at least 200 mile range is a very iffy proposition for 99% of ICE customers, but 1% is more than enough to feed $$$ into eventually having 500 mile range EVs (at least 400 mile EPA range with the ability to go 500 miles at somewhat slow speeds).
Once Tesla sales achieve at least US$ 20 billions / yr, Tesla will have more free cash flow than it can actually invest on R&D. This will happen before 2020 in my unscientific opinion.

I lived in 5 different cities in my life so far, and in 3 of those 100 mile range would work the vast majority of the time.

 

[Vexar]

So my new experience with "dealers" was at the EPCOT park in Disneyworld, where one is expecting to hear about the future. There was a hulking fellow standing rather proudly outside the exit of Test Track, sponsored by Chevrolet. He had a clipboard, and for all intents and purposes, was there to tell you about the Chevrolet Corvette that was there at the exit. I asked him about the Chevrolet Bolt, he was confused. I tried to say "Bolt, not Volt" and that meant even less to him. I told him it was an electric car, and that I'd just been riding in an electric car-ride, so I thought this was the right place to ask. At this point, the fellow, we'll call him Bulkhead, looked angry. Not wanting him to blow a piston, I walked further along. Happily enough, I turned the corridor, and there was a larger space with many more Chevrolet vehicles. A young fellow was there, also with a clipboard. I tersely relayed confusion by the other fellow, and he said the new Volt was over to the corner, and it had just come in two weeks ago. The two of us chatted endlessly. At one point, I let it be known that I had a Tesla, and I needed to be informed on Chevrolet for circumstances when folks had different purchase budgets in mind. He signed me up for receiving some materials in the mail.

The auto dealer space is pretty dismal, by and large. This one young fellow has helped me see that my disappointment is no longer an absolute truth about dealerships. Sure, there's no dealership at EPCOT. At least the best-case situation paid off, just this once.

 

[Skotty]

Just for fun, I checked, and for me, it's 41 miles to the local airport, 82 miles round trip. I don't live in the country. And yes, with this as one example, I would not buy an 80-mile EV as a primary car. I think it would need to be about double that, 160-mile, before I would consider it suitable for daily in town driving.

Getting more general, I thought for a second -- what's a common yearly mileage for a vehicle? My thought was about 15K per year (I've got about 68K on my 4 year old Volt). Divide that by 365 days. That comes to 41 miles per day -- average. That's if you drive every single day of the year. There's just not enough buffer. And that problem is compounded by poor fast charging options. I really think EVs need to get to 120+ miles before they will really start getting some respect.

 

[Msmith_P85+]

I am with you there. Sales people and dealerships in general do not see EV as going concern or valid option. It is all people talk about when planning on a car - they think, EV, Hybrid, or Gas - what can I afford and how do I save on gas.

- - - Updated - - -

The Bottom line is foremost in their minds.

 

[ThortsMD]

Agreed. This will require a more expensive battery. But once there is adequate range available, there MUST also be fast (ie, Tesla fast or faster) charging available. This equation has 3 main variables....range, speed of charging, and cost. People often neglect the speed of charging part.

 

[Ktowntslafan]

Staff at our local Nissan dealership was downright panicky when we asked them about the Leaf. "The Leaf? Ummm...wait right here Sir...(pssst: this guy is asking about the Leaf...what am I supposed to say again?)...right, Sir...no Leaf available today...how about a VERSA!!! HALF THE PRICE!!!"

Angering!

When I finally got a quote for a lease, it was +/- $600/month vs $199/month in Cali. Exchange rate was on par at the time. Ludicrous.

There are tens of millions of consumers who would happily lease a Leaf for $199-$299/month. My wife's commute to work is 10 mins, so we would have one for sure...except lease here was 3X Cali rate.

Anyone in Canada have a similar lease quote?

 

[S'toon]

There are tens of millions of consumers who would happily lease a Leaf for $199-$299/month. My wife's commute to work is 10 mins, so we would have one for sure...except lease here was 3X Cali rate.

Anyone in Canada have a similar lease quote?

I've been paying attention to lease rates for years. It's been standard for Canadian lease rates to be about 3x they are in the US. I've been wondering why that is.

On a side note, the Smart ED has been going for a $99/month lease rate at one Toronto dealership in August year for the past couple of years.

 

[Canuck]

My Leaf was imported from the States when our dollar was at par (not that long ago!). Too bad it's not still at par because you can pick up used Leafs dirt cheap in the States. You just need to make sure you get them from a cooler climate and you run Leaf Spy on the battery before you buy one. It's easy for us to shop for vehicles in WA state (we live 5 minutes from the border) and they were actively marketing them to us before our dollar collapsed. I also bought a Honda ATV in the States for much cheaper than here when our dollar was at par. We now only get one American junk mail flyer with our local papers (Rite Aid) but I said to my wife the other day when looking at it that I bet they are just running out the contract since once you add 25% the prices are not much cheaper, if at all. Cross border shopping has really taken a hit.

 

[Ktowntslafan]

I've been paying attention to lease rates for years. It's been standard for Canadian lease rates to be about 3x they are in the US. I've been wondering why that is.

On a side note, the Smart ED has been going for a $99/month lease rate at one Toronto dealership in August year for the past couple of years.

Everyone I know would be on this as a second vehicle (virtually everyone I know has 2 or more cars):

Octobers $199 Lease Deals On Plug-In Electric Vehicles

 

[dgpcolorado]

I've been paying attention to lease rates for years. It's been standard for Canadian lease rates to be about 3x they are in the US. I've been wondering why that is...

While I can't explain the "3x" I would guess that part of the difference is that USA cars have the $7500 federal tax credit applied to lower the cost of the car. The lease rate is then based on the difference between that much lower price and the residual value. Also, the 2015 models on this side of the border have been getting a $5000 discount from Nissan to clear the lots for the longer range 2016s.

I haven't looked at any real leases but just to make up some numbers:
MSRP US$29,000 - $13,000 residual = $16,000
MSRP US$29,000 - $7500 - $13,000 residual = $8500

The lease needed to amortize $8500 is a lot less than that needed for $16,000! Throw in the $5000 Nissan discount and the numbers get even more dramatic. Last I heard Canada didn't have the equivalent of the USA federal tax credit, although I believe that several Provinces have their own incentives. Add in the difference between USD and CAD and I think you can see why lease rates are quite different in Canada versus the US.

 

[djplong]

Jared Allen, a spokesman for the National Automobile Dealers Association, said there was not sufficient data to prove that electric cars would require less maintenance. But he acknowledged that service was crucial to dealer profits.

Not sufficient data? An average ICE car has 1800 parts that can go wrong. The Tesla Model S has FAR fewer than that!

 

[Canuck]

Not sufficient data? An average ICE car has 1800 parts that can go wrong. The Tesla Model S has FAR fewer than that!

", a spokesman for the National Automobile Dealers Association, said" -- anything that follows those words should be taken with a grain of salt.

 

[Ktowntslafan]

While I can't explain the "3x" I would guess that part of the difference is that USA cars have the $7500 federal tax credit applied to lower the cost of the car. The lease rate is then based on the difference between that much lower price and the residual value. Also, the 2015 models on this side of the border have been getting a $5000 discount from Nissan to clear the lots for the longer range 2016s.

I haven't looked at any real leases but just to make up some numbers:
MSRP US$29,000 - $13,000 residual = $16,000
MSRP US$29,000 - $7500 - $13,000 residual = $8500

The lease needed to amortize $8500 is a lot less than that needed for $16,000! Throw in the $5000 Nissan discount and the numbers get even more dramatic. Last I heard Canada didn't have the equivalent of the USA federal tax credit, although I believe that several Provinces have their own incentives. Add in the difference between USD and CAD and I think you can see why lease rates are quite different in Canada versus the US.

Ontario has an $8500 tax credit. CDN dollar was at parity.

Canadians consumers regularly get hosed...

Ottawa targets higher prices in Canada | Toronto Star

 

[dgpcolorado]

Ontario has an $8500 tax credit. CDN dollar was at parity.

Canadians consumers regularly get hosed...

Ottawa targets higher prices in Canada | Toronto Star

Does that Ontario credit apply to leased cars? (My state tax credit is much lower for leased cars.) Even if it does, can the car leasing entity use it as part of the down payment, as is the case with the US federal tax credit?

Anyway S'toon is in SK and may not have a provincial tax credit to work with. The point I was trying to make is that USA EV leases are often artificially low because the federal tax credit greatly reduces the capitalized cost of the lease. If provincial tax credits can't be used in the same way, which would be my guess, it would explain some of the difference in typical lease costs.

 

[Ktowntslafan]

Does that Ontario credit apply to leased cars? (My state tax credit is much lower for leased cars.) Even if it does, can the car leasing entity use it as part of the down payment, as is the case with the US federal tax credit?

Anyway S'toon is in SK and may not have a provincial tax credit to work with. The point I was trying to make is that USA EV leases are often artificially low because the federal tax credit greatly reduces the capitalized cost of the lease. If provincial tax credits can't be used in the same way, which would be my guess, it would explain some of the difference in typical lease costs.

The credit applies to leases as well:

Cars are EVolving