Sales Accelerate for Electric Cars

NEW YORK ( TheStreet) -- Last week was an eventful one in the world of electric cars. Let's begin with the March month sales numbers in the U.S.:

  • Nissan LEAF: 579
  • Toyota Prius plug-in: 891
  • Chevrolet Volt: 2,289
  • There are of course other electric cars selling in the U.S. from makers such as Fisker, Mitsubishi, BMW, Ford ( F) and others, but in the month of February, those sales were relatively negligible.

    So the total for Nissan ( NSANY), Toyota ( TM) and Chevrolet ( GM) was 3,759, or an annual sales rate of 45,108. In all of 2011, Chevrolet and Nissan combined sold a little over 17,000 in the U.S.

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    In the second half of 2012, we should expect the rate of electric car sales to increase. Ford is bringing the C-Max Energi, Tesla ( TSLA) is bringing the Model S, and Toyota is bringing the RAV4 to market, just for starters.
    Volt production, which had been temporarily halted, will restart a week earlier than planned to meet growing demand.

    Chevrolet started production in February of the versions of the Volt sold in several international markets. Some of these sales are under labels of Opel, Vauxhall and Holden, and we do not yet have accurate numbers of their initial sales here in March. GM had previously alluded to 7,000 reservations in Europe alone, but who knows how firm these reservations are or were.

    What, you may ask, explains the Chevrolet Volt's sales leadership here in March? The primary reason is that Volts manufactured starting in February are eligible for single occupants in California's carpool lane. But, you may ask, so is the Toyota Prius plug-in, no? Yes, but here is the math showing why the Chevrolet is so much more attractive than the Toyota in this instance:

    A fully loaded Prius plug-in is $39,525 before tax adjustments. A Chevrolet Volt is $44,575. But the Volt will give you $5,000 more back on your taxes, thanks to a battery that is four times larger than in the Prius plug-in. So adjusted for taxes, these two cars cost essentially the same. However, the Prius gives you only six miles of all-electric range, compared to the Volt which gives you 35 miles. Six versus 35? Not a close call there, buddy.

    Yes, the Prius is slightly roomier than the Volt, but in all other aspects, the Volt is a more capable car, technically speaking. It gives you a vastly superior all-electric range, it is much faster (acceleration), and it generally drives a lot more like a European premium sports sedan than an eco-box. So that should explain why the Volt sold a lot more in March than the Prius plug-in.

    As a result, Volt production, which had been temporarily halted to catch up with demand, will now resume one week earlier than planned -- April 16 instead of 23.

    Nissan's Infiniti

    At the New York City auto show, Nissan unveiled the Infiniti sedan version of the Nissan LEAF. It's a larger sedan with a larger electric motor, but the same 24 kWh battery as in the LEAF. One would therefore assume that the LEAF's relatively mediocre 73-mile range shouldn't change much.

    Here is Nissan's problem with the all-electric Infiniti sedan: Its range looks to be very significantly lower than Tesla's entry-level Model S, which goes into production by the end of 2012. Tesla has talked about a 160-mile range for the 40 kWh battery version of the Model S.

    The Tesla Model S starts at $57,400 before tax adjustments. That's about $20,000 more than the Nissan LEAF. How much cheaper must the Infiniti sedan be, compared to the Tesla Model S, in order to fetch any material number of takers? I think it would have to be at least $10,000, probably more like $15,000, cheaper. Seventy-three miles just isn't enough.

    I think Nissan's mistake here is building the Infiniti with a 24 kWh battery going up against Tesla's 40 kWh base car. Get real. Build the right spec and let the price fall where it may. Didn't Steve Jobs teach these people anything?

    Also at the New York auto show, Fisker unveiled the $50,000-something Atlantic, and hopes it will produce it by early 2014. It's obviously an extremely beautiful car with a drivetrain that can compete in many aspects with the Chevrolet Volt, but the company isn't fully funded and two years is a long time away. An early 2014 Fisker Atlantic makes you think the following: The Chevrolet Volt looks mighty good for having entered production in November 2010!

    What's the bottom line here? The electric car market will see a significant boost in prestige this July, when the Tesla Model S starts delivering to customers. In the meantime, Ford, Toyota, Nissan and BMW will help bring more cars mainstream in various stages in 2012 and 2013. Volkswagen has announced models as well, although not for the next six months.

    There is no doubt that plug-in electric cars is a rapidly growing niche, although it starts from a small 17,000-something U.S. base in 2011 that should grow dramatically in 2012 and more so in 2013.