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Who's killing the electric car? Consumers.

Sales of Chevy Volt and Nissan Leaf are far short of expectations. Fisker and other electric-car makers are in trouble. Will the lack of consumer sales kill the electric car, just as it did in the '90s?

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Nissan Motor Co.'s latest Leaf electric car is displayed for media in Tokyo last month. The electric car won't meet its sales targets this year, Nissan concedes.

Junji Kurokawa/AP/File

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The 2006 documentary "Who Killed the Electric Car" explores GM's attempts to bring an electric car to market in the mid-1990s. The usual suspects are trotted out – the oil industry, the automakers, and the government – and for years many electric car enthusiasts have believed that it was anything but the consumer that killed the electric car. 
 
Fast forward to 2012 and it appears that the electric car industry is again struggling to survive. Sales of the Chevy Volt have fallen far short of expectations, and Nissan Motors CEO Carlos Ghosn has now admitted they will not meet 2012 sales targets for the Nissan Leaf.
 
In a recent report, Katie Fehrenbacher noted "A123 Systems, Fisker Automotive and Better Place – representing billions of dollars of investment in the future of electric cars – are now facing major problems financially and commercially."

 
The problem is simply that consumers are not flocking to electric cars as fast as expected. The reasons are primarily the higher initial cost of the car, and certainly some concerns about the range and the possibility of becoming stranded by the car. Early reports from  stranded Nissan Leaf owners stoked those fears. Even though "Who Killed the Electric Car" completely exonerated batterymakers in the death of the electric car, today's batteries still do not have enough range to satisfy many consumers. 

On the other hand, it is true that when hybrids were first mass-produced in the late 1990s, for several years the market was dominated by the Toyota Prius and Honda Insight. At that time oil prices were low, and sales in the early years were very slow. Today, hybrids are very much mainstream, primarily because high oil prices have made them better choices for more consumers. 

If oil prices remain high over the next few years, the electric car may eventually gain some traction – if consumers don't kill it again first.

– This article is a modified version of a story in Energy Trends Insider, a free subscriber-only newsletter that identifies and analyzes financial trends in the energy sector. It's published by Consumer Energy Report 


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