Order Reprints

Auto Focus

By Julie Cridler
Senior Market Analyst, IRN Inc.
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

A few years ago, when the zeal over electric vehicles was just starting to emerge, there were new car companies cropping up almost on a monthly basis. It seemed possible at the time that the industry was poised on the brink of an overall change in structure and dynamics. Fast-forward to 2011 and several months after some of the first electric vehicles were launched by mainstream automakers, and things have indeed changed, but the overall structure of the industry has remained largely intact. The start-up companies are still there operating at the fringes but what will their ultimate effect be on the industry and who will dominate the EV space?

Another day, another start-up

In 2008, when I began earnestly following the electric vehicle movement, many of the start-up companies had vehicles they claimed were ready for production, but most of them were nothing more than enhanced golf carts, also known as Neighborhood Electric Vehicles (NEVs). These companies offered vehicles that could run solely on an electric charge for a limited range. However, most of the vehicles had little or no crash protection to speak of and could only be driven on roads with posted speed limits of 35 mph or less.

If the function of these vehicles didn’t turn consumers away, the price points of many of the early EVs precluded the average buyer from consideration. A good example is the Tango T600 from Commuter Cars Corp. This tiny two-seater vehicle, which is only 39 inches wide, is currently only available for purchase in kit form. The asking price is a mere $121,000 for the kit and all necessary components. Three years ago the company was collecting refundable deposits to fund a production version of the vehicle, estimating it would require about two years to complete the engineering. Today, the company still claims to be seeking funding and has a waiting list (the source of the refundable deposits) for the production car.

If pricing and function did not present a challenge for many of the early EVs there were still the issues of odd styling and bad press. The Aptera 2e is a good example of this. Looking more like an airplane with wheels, the vehicle would be a stretch for the typical car-lover. On top of its aesthetic issues, the Aptera faltered mightily in the Automotive XPrize competition, leaving many to doubt whether this vehicle would ever indeed reach production. Like many other start-ups this led to launch delays, the need to seek additional funding and overall bad PR for the company and vehicle. The company is still hanging on, but does not appear to have the necessary funding to advance its dreams of production.

Still other obscure small EV companies, like Zenn Motor Co., find that they can fit into the automotive market but in a different capacity than as an actual producer of cars. Zenn, until recently a producer of low-speed electric vehicles, had long touted its goal of launching a highway capable electric car. Recently, however, the company announced it had abandoned that strategy and would instead focus on supplying electric drivetrains to carmakers.

Start-ups with staying power

While the start-up crowd has not made a dent in the market overall, there are two exceptions. Tesla Motors, although not yet profitable, has been largely successful in creating a market for its electric Roadster and is well on its way to launching a more affordably priced electric sedan, the Model S. Another company, Fisker Automotive, has begun producing its Karma plug-in hybrid luxury sedan, with the first deliveries expected in the next couple of months. The company has plans for several more future models, some of which will be built at a plant it purchased in Delaware from General Motors. While both the Fisker and Tesla initial models are pricey, both companies covered the bases not only in terms of function, but also provided vehicles will beautiful styling — nothing like the early golf cart EVs.

For the foreseeable future, the new electric vehicle companies are not going to shake up the automotive market and completely change the way the industry functions. Nor will they be likely to put out vehicles that are not niche-oriented and meet the daily driving needs of the average consumers — the big OEMs are already well on their way to handling that. The smaller EV companies will have a place — either as providers of solutions or potential partners for larger established OEMs that are seeking a breakthrough in the area of electric vehicle technology. But it will be a long time coming, if ever, before any of the newcomers reach equal footing as the industry leaders that have long been selling vehicles powered by internal combustion engines.

  Order Reprints

TAGS:

• auto focus
• column
• irn
• julie cridler
• manufacturing