Tuesday, April 30, 2013

EV Business Case - Q1 2013

Tesla Supercharging Stations: Another Out-of-the-Box feature from Elon Musk firm. 

Now that 95% of this year Q1 data is available and looking at the business case of plug in cars, one can say that the only manufacturer making a profit with electric vehicles is Tesla, not only they are selling more than expected, the start up company is also selling each unit with a higher price than predicted, so the Q1 profit only comes as a natural consequence of that.

The rest of the market is trying not to lose much money in each unit sold, research and development costs are high, prices have to be realistic and the number of units sold are below expectations, with some CEO's discontent with these obstacles.

The truth is that it's a long hard road to electric profitability, but some are closer to than others, Nissan is now nearing 60.000 Leaf's sales (and let's not forget the additional 23.000 batteries sold by teammate Renault), allowing them to recover a good part of the investment and along with other measures, reduce the Leaf's price. Now with the production distributed by three factories, if (and that's a big "IF") they can produce some 2.000 units per factory, we are talking 6.000 units a month and 72.000/year, numbers that can put Nissan on the verge of  EV break even point by the end on 2014.

Will the tiny Spark make a difference on GM's electric strategy?

GM is also taking the same path thanks to the Volt project, but it's lagging behind Nissan, right now they are at 40.000 plus units of the Volt family and this year sales are below 2.000 units/month, as the increased competition dents on Volt sales.

GM has two ways to increase the investment recovery: A price reduction to increase sales (Still too early, maybe for the end of the year) or diversification with new models. With the Chevrolet Spark EV and the upcoming Cadillac ELR arriving this year, this looks to be the path followed by The General. If the ELR doesn't need to be a best seller, because of its premium price, for the Spark they will have to sell a lot of them for the model to be important to the GM EV strategy, and right now those large numbers seem rather questionable. For now the break even point for GM looks at least some three years away, maybe on the 2nd gen Volt...

As for Toyota, despite having sold more than 30.000 units of the Prius PHEV, they're not really that deep into plug-ins, regular hybrids are their (profitable) business and the PHEV version is just an extension of that program, so don't expect for Toyota to present new products in this segment, although putting a plug in a Prius Alpha/V/Plus shouldn't be much of an effort, right? (Wink, wink)

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