The Future of the Green Car Industry

by | Dec 30, 2010

For many years car companies have brought out “green” cars which they claim are the big revolution, which will reduce our usage of fossil fuels. The majority of these have been false dawns which have only served to damage the image of the green car industry as consumers become sceptical of anything which claims to be environmental.

Another issue has been that being environmentally conscious has tended to come at a price. My firm estimates that getting insurance with a car insurance firm which claims to be environmentally conscious could result in premiums which cost up to 146% more than with conventional insurance firms.

The effectiveness and cost of “green” offerings have therefore hindered their adoption. However, all this could be about to change as Nissan launches the first mass produced all electric vehicle.

The Leaf is set for a full scale roll out in the USA in 2011 with 20,000 reservations having already been made. This interest stems from the fact that the car is actually environmentally friendly as it doesn’t require fossil fuels and therefore doesn’t emit carbon dioxide gases into the atmosphere. Despite this the car is much quicker than expected, with a top speed of 92mph. The Leaf therefore does what it says on the tin and is not a marketing gimmick.

The second impediment to environmental car adoption has been costs. However, Nissan has priced the innovative technology “aggressively” and it is therefore available to buy from $32,780. A number of tax breaks will be offered as an incentive to buy the car, which results in it being available from as little as $25,280. This does still seem a lot when you consider that you can buy a new Ford Focus for $18,790, but isn’t quite so bad when you consider the savings which come with running it. It is possible to save over $1500 per year on fuel alone with the Leaf, with it costing just $220 to do the average 12,000 mile per year average. There are other incentives being planned in different states, with New York governor George Pataki planning an “energy reduction plan” which it is alleged could save drivers of electric vehicles $2000 per year in tax breaks.

However, there are two big problems with the Leaf. The first is practicality, with it only being capable of doing 100 miles between charges. This problem is exacerbated by the second problem, which is the availability of recharging outlets around the country. The car is equipped with a quick charge function which allows the batteries to recoup 80% of their power within 30 minutes, but this isn’t an option if there is nowhere to charge it.

Plans are in place to change this situation, with the U.S. Department of Energy providing a grant of $114.8 million to a company called ECOtality, which is planning on installing 15,000 charging stations across sixteen states within three years. Even with plans to introduce a second edition Leaf capable of 200 miles between charges in 2015, this still isn’t sufficient to make owning an electric car commonplace.

Technological advances are relentless. The Nissan Leaf would have been unthinkable just ten years ago but now the improvements being made to the efficiency of lithium batteries and electric engines are truly remarkable. This is something which will only improve as competition in the green car market increases, with Chevrolet, Renault Mitsubishi and Ford all planning on introducing fully electric vehicles in the coming couple of years.

The technology is there; it is the infrastructure which isn’t. It’s all well and good that the government is providing tax breaks to people who own environmental vehicles in order to encourage their adoption but it is not the biggest issue. The government needs to instead channel these funds into the development of an electric charging point infrastructure around the U.S. Oil supplies are dwindling and prices are rising, and the time has come for a viable alternative and people are beginning to realise for the first time that owning an electric car is a viable and realistic option. The government must act; otherwise the country could be crippled when the cost of filling up a vehicle becomes unsustainable.

Mark Martin is a marketing specialist at finance price comparison website

Stay Informed

Get E+E Leader Articles delivered via Newsletter right to your inbox!

Share This