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Plug into this: Debate over electric car demand

Nissan leaf cliff1066


Nissan’s plug-in electric Leaf.

NPR’s Science Friday just did a solid segment on electric cars, featuring representatives from Nissan, which is rolling out its new all-electric Leaf, and Chevrolet, which is unveiling its new plug-in hybrid electric Volt.

Oregon, you might have noticed, has been all over the electric vehicle scene. This month, Portland General Electric installed its first public-use quick-charging station (80 percent charged in 20-30 minutes) in the parking garage at Two World Trade Center in Portland.

But that’s not what I wanted to bring up. I enjoyed NPR’s lively debate on what is driving demand for electric cars – complete with a rather fiery exchange between Science Friday host Ira Flatow and his third guest on the show, Phil Ross, who is senior editor at the New York tech magazine IEEE Spectrum.

From the get-go of the program, Ross made it clear that he does NOT see consumers driving demand for electric cars. Not technological innovation, either, he argues:

“It’s because government is pushing new regulations,” said Ross. “This is not driven by consumer demand. This is driven by government fiat.”

(Indeed, there are lots of tax breaks for hybrid and electric car purchases. But hurry if you want one; they’re set to sunset Dec. 31. More on pricing in this Christian Science Monitor story.)

“I disagree with Phil’s point that this is completely government- or regulatory-driven,” said Mark Perry, director of product planning for Nissan North America. “If you look at just the consumers out there, there is a whole sustainability movement of folks … they may be in hybrids today, but they were looking for a pure zero-emissions solution. A vehicle that does not harm the environment with zero tailpipe emissions, and a vehicle they can use everyday. You can see that growing population of consumers out there.”

(Proof, he said, is the 18,000 people who have already reserved a Leaf.)

Tony Posawatz, Vehicle Line Director for the Chevy Volt, echoed that sentiment. He wouldn’t say how many people had reserved a Volt, but he said he’s heard figures of how much people are willing to pay above the sticker price for the car.

Now, here’s where it got interesting:

Flatow asks senior editor Ross why other companies, Honda and Toyota for example, aren’t “jumping on the bandwagon” with their own plug-in electric cars.

Ross: “All the companies in the world are working on electric drive - it’s not just Nissan and Chevy. Everyone assumes it’s going to be important … but what I said earlier is I don’t think it’s because consumers are clamoring for it but because the government is demanding it.”

Flatow: “But don’t you think they will start demanding … the Prius was a loss-leader  for a few years, right? Then it became the most demanded car in America.”

Ross: “It may have been demanded, but at what price? I had at least one analyst tell me as recently as nine months ago he didn’t think the Prius was breaking even - even then.”

Flatow: “That doesn’t mean that’s a demand reason that it’s breaking even.”

Ross: “Of course, if you lower the price low enough you’ll get demand.”

Flatow: “If they’re selling as many cars as they can make, which they were –”

Ross: “At an artificially low price –”

Flatow: “All the better for the consumer.”

Ross: “Well, the money’s got to come from somewhere.”

Flatow: “I’m not worrying about Toyota…”

And break. Time to take some phone calls, Flatow decided.

So, I want to know what you think. Which came first, the electric car tax credit or the consumer demand for electric cars? How much should the government subsidize electric vehicle purchases? Does it depend on where is the electricity is coming from?

Electric cars Nissan LEAF Portland General Electric

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