Tuesday 17 August 2010. The Green Piece Column
Sometimes it can be debated as to whether the glass is half full or half empty. However, only the eternal optimist could put a positive spin on Spain’s electric car sales results.
Admittedly Spain has managed to sell 16 times as many electric cars as last year – the only problem, is that the number it has sold is just 16 in total (see article).
The figures were revealed by the Associated Press last week in what is a massive blow to the Spanish government who have committed to investing close to $800million in electric cars and infrastructure in the hope of reaching 2,000 electric vehicle sales this year.
What happened in Spain?
Electric cars were supposed to be the centrepiece of Spain’s green efforts with charging points sprouting up across the country in petrol stations and disused telephone booths. In fact, within four years, the government had hoped to have one million electric vehicles on the road.
As part of its efforts, it decided to back the REVE electric car and wind power project. The electric cars sold were all manufactured by Norwegian car maker THINK with the group attempting to put a brave face on the lack of sales by relating electric cars to the early results for personal computers and mobile phones, suggesting that by 2012, with dozens of electric cars on the market and with lithium-ion battery prices driven down, sales will leap.
However, the enthusiasm for electric cars in the country has fallen well below expectations and now the renewable energy sector as a whole is expected to suffer from cutbacks. For example, subsidies for solar farms are to be slashed by 25-40 per cent after originally blossoming thanks in large to special feed-in tariffs that were so high they guaranteed a return of 10 per cent on investments.
Looking at the bigger picture
Before consigning electric cars to the dustbin as a result of this slow start, it’s important to look at the bigger picture.
It’s not just the electric car forecasts that appeared too ambitious from the government – it’s also its predictions for the economy as a whole. Whereas the government itself has suggested there will be a 0.3 per cent recovery this year followed by a leap of 1.3 per cent next year, other forecasts have not been so generous. For example, the Bank of Spain expects a contradiction of 0.4 per cent this year; while the International Monetary Fund actually revised its growth forecasts downwards for 2011 from 0.9 per cent to 0.6 per cent.
With Spain entering its worst recession in decades in 2008, the shoots of recovery have been slow with the automotive sector just one area to suffer.
It’s a similar picture across the rest of Europe, with Volkswagen last week declaring that it expects a tough second half of the year particularly with scrappage scheme subsidies coming to an end.
So is this the wrong time for electric cars?
What’s clear is that the stars have yet to align for electric cars to enjoy significant success. The early Spanish failure indicates that subsidies alone aren’t enough to attract new car buyers.
Perhaps potential buyers are waiting for prices to come down; for batteries to offer a more extensive range; or for the infrastructure to be more firmly established and proven. It takes a brave motorist to put his/her faith in a brand new technology when there is little evidence that it will work or be around for the long term.
Similarly, motorists may well be waiting for more choices. The THINK electric cars fit into the typical vision of electric vehicles as small, almost bubble-like models that stand out from the crowd but perhaps will never be mainstream. Most car buyers may be waiting for electric cars to look and feel like more traditional vehicles – and in the likes of the Nissan LEAF, Chevrolet Volt and sportier models like the Tesla Roadster they shouldn’t have too long to wait.
Our verdict
We all know electric cars are coming… what we don’t know is how quickly they will become the norm.
Perhaps the mistake the Spanish government made was in setting such ambitious targets before there was any hard evidence that these goals could be achieved. The plans were only unveiled in April, so to expect a dramatic turnaround is short-sighted at best.
For electric cars to become successful on a mass scale it will require education about the technology, how it works, and proof of its successful implementation. It will need a wide variety of electric car choices and established infrastructure in place so that the vehicles are ready to go now with suitable ranges so that drivers don’t have to make adjustments to their daily routines. It will also require continued government support to energise initial take-up.
So the Spanish government has the right idea, it is just getting a little ahead of itself. What’s important is to not be too discouraged by this slow start and be tempted to veer off course – a long road lies ahead and it’s vital that the bumps are navigated and the journey is seen through to the end.
Faye Sunderland
