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Electric cars may be a trickle-down proposition

Published January 17, 2013

Should the trickle-down theory apply to electric vehicles?

The question nagged more with each reveal I attended at Detroit’s North American International Auto Show press preview, and each manufacturer’s stand I visited.

The first EVs to hit the market seem caught in no man’s land; too expensive (and, with battery-only versions, lacking in range) for the mass market, but too small and plebeian for those with buckets of cash to lavish on a car — or two, or three.

The pool of early adopters willing and able to pay the EV premium is shallow. But could the growing and high-profit-margin premium segment keep EVs alive until technology improves and prices drop enough for the mass market to buy in?

Upscale EVs dominated the preview, and their pitches focused far more on style, performance and luxury than fuel savings and environmental benefits. The consistent message: You’ll love these cars and they’ll enhance your image — oh, and by the way, under the seats you’ll find a lithium-ion battery pack.

With the conspicuous exception of Mitsubishi, which didn’t display its struggling iMiEV EV, promised plug-in-hybrid Outlander — or anything else — in Detroit, the major EVs from the likes of Honda, Toyota, Ford, GM, Nissan, Fiat and Smart are on display.

(Nissan, by the way, made the lone splash in conventional hybrids with its aggressively styled Resonance small SUV concept.)

Show visitors, until Jan. 27, can inspect them all, and be driven — sedately — in several production models around an indoor track. Chances are they’ll be impressed because almost every EV works brilliantly. But sales are what it’s about and the current crop makes barely a ripple.

In economics, the trickle-down theory is a cruel hoax, but it might work for EVs; particularly battery-only but even plug-in hybrids, which report substantial percentage sales increases but on tiny absolute numbers.

Exhibit A in Detroit is Cadillac’s ELR, based on the Chevrolet Volt platform and plug-in hybrid powertrain — 1.4-litre gasoline engine, 16.5-kilowatt-hour battery pack and slightly more powerful electric motor — but far beyond in style, opulence and promised performance. GM claims the vehicle’s features, from hand-stitched premium leather to paddle-shift control of regenerative braking, and exclusivity will make it a “treasure.”

Pricing isn’t announced but will matter little to those with the potential to buy this stunner.

The same holds for Volkswagen’s CrossBlue diesel plug-in hybrid concept midsize SUV, also unveiled in Detroit. It’s more staid than the ELR but almost as posh, and with so many battery clusters and driving-mode buttons that those behind the wheel might think they’re running the space station.

Ditto for the Mercedes-Benz B-Class Electric Drive concept and Tesla’s production Model S and prototype X, all seen previously but still generating press-preview buzz. Not to mention BMW’s i3 concept city car, which will be offered in about a year as purely electric or with a small range-extending gasoline engine and, the company hopes, will entice well-heeled commuters from their BMW 7s and Mercedes S-Class sedans.

Tesla is explicit about this. George Blankenship, its vice-president of sales, previously worked at Apple and described how hordes would leave empty-handed after drooling over new gadgets they couldn’t afford. Then, costs would plummet and sales soar.

That, he says, is Tesla’s hope for its Generation 3; a smaller, lighter car to follow Model X whenever technology advances permit equal performance and, perhaps, a 50 per cent price drop.

As I wrote this, a story arrived from the U.K. that, based largely on the Smart EV’s arrival, asks: “Could 2013 be the year of the ‘affordable’ electric car?” But even that minimal two-seater will devour most of $30,000, including taxes.

My question from Detroit stands.

wheels@thestar.ca

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