Electric Car Revolution May Be Delayed; Nissan Looks Good Regardless

Shortly before test-driving Nissan Motor Co.’s (NSANY) still-unnamed electric vehicle last week, Edmunds.com consumer advice expert Phil Reed told EnergyTechStocks.com that investors shouldn’t expect the EV revolution to arrive until gasoline is back up to $4 a gallon, which given the state of the economy, could be a lot later than the fourth quarter of 2010, which is when EVs are expected to appear in dealer showrooms.

In an exclusive interview, Reed said he was dismayed that lower gasoline prices “have cooled off lots of interest” in plug-in electric hybrid vehicles (PHEVs). “Consumers have gone back to their wicked ways,” he said, noting the growing sales of bigger, less fuel-efficient vehicles. “It’s as if last summer never occurred,” he said glumly. “Nobody seems to care about global warming. I’m afraid we’re going to have to go back to $4-a-gallon gasoline” before the EV market takes off.

Given that the U.S. Energy Information Administration (EIA) sees gas selling this recession-scarred summer for only about $2.30 a gallon on average, and that even the most dire predictions of rising gasoline prices don’t anticipate the $4 level being breached again until perhaps 2012, if Reed is right, a lot of investors with money tied up in electric battery developers and similar concerns could be waiting a long time for their hoped-for payoff.

It’s not just consumer attitudes that are standing in the way of electric vehicles, Reed said. Probably an even bigger issue is that U.S. auto makers appear to him to just be “pretending” to be sold on electric vehicles. That includes even General Motors Corp. (GM), whose fate, according to many analysts, rests in large part on the success of its plug-in Chevrolet Volt. “I don’t see anyone pulling the trigger,” Reed said, adding that when it comes to Chrysler’s EV models, “Nobody really knows if anything’s there.”

But according to Reed, there is at least one car manufacturer worth investors’ attention right now, no matter how long the EV revolution may be delayed, and that’s Nissan.

“Nissan will succeed in niche markets and if gas goes to $4 they will be well positioned to own a large section of the EV world,” he told EnergyTechStocks.com.

Based on what Reed was told by Nissan, it would appear that the Japanese firm is ahead of its competitors, not just the “pretenders” in Detroit but also the hard-chargers in Japan and China, especially Mitsubishi Motors Corp. (Symbol: Tokyo 7211), Toyota Motor Corp. (TM) and BYD Company Ltd. (Symbol: Hong Kong 1211). The vehicle, which Reed described as a five-door hatchback with compact car acceleration, has a 100 mile range and will NOT have a price premium. In addition, it may be capable of recharging its battery to 80% of capacity in just 20 minutes.

But how does it drive?

“It’s spooky quiet and smooth,” Reed reported, adding, “I can’t wait until these cars arrive.”

Disclosure: no positions

Comments

[PastTense:]

New technologies take a while to work the bugs out. So a delay in electric vehicles is a good thing--so the bugs can be worked out now.

If instead there were big sales of electric vehicles now, there could well be major problems--and lots of recalls--and consumers deciding that EVs are just not reliable. And this taking years to recover from.

I think a major question about the future success on both the Japanese and American auto makers is what the Chinese auto makers are doing. (I expect they will have a major impact on the low end of the market in a few years.)

Anyone want to post an SA article about them?

Apr 20 09:46 AM

[33Nick:]

We've been following Nissan for sometime now and believe they have made all the right steps in this trying industry. They are set to frog leap the rest of the industry.

Apr 21 06:48 PM

[a. palmer jr.:]

I hope the automakers don't drag their feet on the development of EVs just because of a temporary lowering of gas prices. Even at 2.00 gasoline, if the price were right on a decent EV, I would consider one for my next auto purchase.

Apr 21 11:30 PM

[Wisdom vs. ...:]

last summer DID never occur, it was commodity market driven, not demand

Apr 22 09:03 AM

[stockdoc123:]

Larry Burns is the vice president of R&D for GM. His job? Find a new way to power cars.

www.ted.com/index.php/...

Apr 22 09:58 AM

[e763:]

If there was an Electric Car at my dealership Right Now that got the same specs as the Nissan EV Not a moment of Hesitation would I experience in my decision to buy a New Automobile . Being Dictated By Fluctuating Gas Prices is not Freedom it's cruel .. Its Cruel Because there is a choice it's just Not Allowed . And You Can Argue that People Don't Want these Things But Where is the Proof They Wont Sell . That's Why I Say They Are Not Allowed . Not that we could Actually expect such Charismatic behavior from politically engaged Imperialist Corporations Influenced By one single non-renewable resource .

Jun 03 08:09 PM