Automakers are hopeful that 2016 will be the year that U.S. consumers really begin to accept vehicle electrification. A new car from General Motors (GM) , the battery-powered Chevrolet Bolt, could prove to be a turning point.
2015 has hardly been a banner year for electric vehicles (EVs), with sales of about 40,000 in the U.S. out of total vehicle sales of about 15.7 million through November.
The Bolt, which was released earlier this year in concept form, is expected to go on sale later in 2016, powered by electric motors. Its batteries probably will generate about 50 kilowatts, giving it a range of about 200 miles between charges.
Consumers have resisted buying electric vehicles because they are relatively expensive, compared to similar-sized gasoline powered vehicles, and their range is limited. Through November, Nissan (NSANY) sold less than 16,000 units of its Leaf, the most popular EV in the U.S., down more than 40% from a year earlier.
For 2016, Nissan is increasing the size of the Leaf's battery to 30 kilowatts from 24 kilowatts, extending its maximum range to 107 miles from about 84 miles. GM executives have hinted that Bolt's range will be 200 miles between charges and the car will sell for about $30,000, after application of relevant government subsidies.
Automakers are under pressure to develop EVs in order to meet fuel efficiency standards and to comply with looming restrictions in California and a few other states that will mandate zero emission vehicles. Unless consumers begin to buy EVs, automakers' sales of conventional vehicles could be restricted.
Matt DeLorenzo, an analyst for Kbb.com, said "ZEV (zero emission vehicle) sales in places like California may ultimately market share." Ford's (F) announcement last week that it's investing $4.5 billion through 2020 on EVs and plug-in gas-electric hybrids reflects the impending regulatory climate.
"There's no getting around the fact that manufacturers have to build EVs by law," DeLorenzo said. "But there is no law requiring consumers to buy them."
Jack Nerad, also an analyst at Kbb.com, called Chevrolet Bolt a potential "game-changer" because of its pricing and range. Low gasoline prices will pose an obstacle to Bolt and other EVs, he said, because consumers will flock to larger, roomier and less fuel-efficient models.
As battery costs fall, larger and more advanced batteries will allow automakers to offer vehicles with longer range, roughly comparable to the range of gasoline-powered cars. Automakers are investing more in charging stations to create a charging infrastructure. Nissan and BMW, for example, this week said they will jointly invest in 120 fast-charging stations in 19 states that will accommodate Leaf and BMW's i3 battery-powered car.
At the same time, automakers and others are lobbying behind the scenes to moderate the regulatory regime that forces the development of alternative-fuel vehicles. What will happen first, a moderation of regulations or consumer acceptance of EVs?