This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Electric Cars: Still in Park

By the Financial Times

The rich are different from you and me: they can afford to be green.

Forgetting that it is a Japanese import, Arianna Huffington called her Toyota Prius "an automotive two-fer, a pleasure to drive and patriotic to boot" while actor Will Ferrell said "there's no reason all Americans shouldn't be driving hybrid cars" and Meryl Streep opined that America would not be in the Middle East if everyone drove one. Perhaps the most honest of these A-List Prius-drivers was comedian Larry David, claiming he "needed something to make me feel smugly superior."

But hybrids are sooooo 2007. With the arrival of electric vehicles (EVs) such as the $100,000 Tesla Roadster or the cheaper $41,000 Volt from General Motors, the likes of George Clooney, Matt Damon and Google's Larry Page achieve zero tailpipe emissions while buying American. One would think that surging petrol prices would induce more ordinary mortals to follow suit. Instead, Boston Consulting Group recently cut its US EV penetration estimate by two-fifths to just 3% by 2020 while another study pegs the Volt's "addressable market" at 7%. More mundane technologies will appeal to those who are cheap rather than than chic.

Generously assuming a 60 per cent drop in battery costs by 2020, BCG calculates that an EV's price per percentage carbon dioxide reduction is twice as high as cutting-edge combustion technology and five times the gain from improved aerodynamics. Even this ignores electricity's own carbon footprint. Based on the average US generation mix, the Volt would release about 25 pounds of C02 in a typical commute versus 28 pounds for the similar-sized Chevrolet Cruze, which costs half as much even after the Volt's $7,500 tax subsidy.

But what environmentally-aware Hollywood star would be caught dead driving a Cruze from his mansion to his private jet?

E-mail the Lex team in confidence at lex@ft.com

null

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs