J.D. Power study says electric cars too expensive, too small, and too unreliable

In its debut release J.D. Power and Associates' new study confirms what many have been saying for some time. EVs are not ready for prime time.

J.D. Power and Associates is a favorite of auto enthusiasts and shoppers who like to cheer cars and manufacturers moving up the ranks of the quality survey, and boo the companies that make the troublesome lemons. In a break from its usual impartial quality rankings, J.D. Power today issued a press release telling the world what manufacturers must do in order to sell more electric cars. The opinions it shared are the result of the company’s analysis of its new J.D. Power and Associates 2012 Electric Vehicle Ownership Experience Study, which it released today.

The study looked at not just actual owner’s of EVs and their experiences and challenges, but also at the experiences of shoppers for EVs. This is important, because as the company pointed out in its press release, owners of EVs are enjoying an emotional attachment to their EV based on their feeling good about helping the environment. Little attention is paid to the many EV shoppers who opted not to buy because they thought the value proposition was not in their interests.

That the company would create a to-do list for automakers trying to sell more EV’s is timely. California and other states now mandate that a certain number of cars from each manufacturer be electric, or some other zero tailpipe emissions vehicle, in order sell cars in their state. Those automakers that don’t have enough EVs can buy credits from other automaker, notably Tesla, in order to keep selling their 11 mpg trucks and 16 mpg maxi-vans to the public, which wants those big family vehicles in overwhelmingly large numbers. Despite price cuts, and amazingly cheap lease deals, automakers are still finding it hard to get buyers to adopt the EVs that so many policy makers think they should be driving.

Here are the suggestions J.D. Power made today. These are based on its correspondence with those drivers that answer its surveys. J.D. Power calls this “Pain reduction.” In other words these are things that will make it less painful for buyers to buy an EV:
1) Reduce Price. J.D. Power says that EV buyers generally pay $ 10,000 more for an EV versus a comparable gas powered car. The company goes on to say it can take too long in the eyes of customers to recoup that premium.

2) Increase Size. J.D. Power points out that due to battery packaging, EVs are too small for most families. They suggest they be bigger.

3) Make EVs more reliable. Apparently the survey respondents think that EVs have reduced performance and range in cold weather and other reliability issues. True or not, the manufacturers need to address this customer concern.

4) Increase Range. J.D. Power points out that the current (affordable) EVs are basically only commuter cars, therefore their acceptance by the public will remain limited if range is not solved as an issue.

5) Charging Issues Need Resolution. The J.D. Power study found that only 43% of EV owners ever charge their vehicle anyplace but at home. Virtually all EV owners in the study charge mainly at home. However, only 31% of respondents are on a reduced price plan from their utility that charges them less to charge at night when demand is lower and the utilities have power to spare.

So in a nutshell the J.D. Power and Associates Electric Vehicle Ownership Experience Study has revealed that EVs need to be bigger, have more range, cost less, be easier to charge, and be more reliable in the eyes of shoppers.

Neal Oddes, senior director of the green practice at J.D. Power and Associates put it this way, saying "Current EV owners focus on the emotional benefits of owning an electric vehicle--which are having a positive effect on the environment--but the way for manufacturers to take EVs to the masses and increase sales is to address the economic equation. There still is a disconnect between the reality of the cost of an EV and the cost savings that consumers want to achieve."

With regard to the economic situation Odes also summed up the value proposition. At first it seems like a slam dunk. Over time EVs actually save customers money. However, Odes points out "The payback period (6.5 years on average) is longer than most consumers keep their vehicle…there also needs to be an improvement in the infrastructure, or the number of charging stations outside of the home. Until those two concerns are addressed, EV sales will remain flat."

This new study validates what many have been saying for some time. Everyone agrees that EVs need to be cheaper, but if federal tax credits of up to $7,500, state tax benefits worth up to $2,500 more, and behind the scenes price supports like ZEV credits worth many thousands per vehicle can’t prop up this technology, it is unclear what can.