Merrill Lynch goes out on a limb, says electric vehicles need to be sexy
Tesla Model S – Click above for high-res image gallery
Is the Tesla Roadster sexy? How about the Model S (pictured) or the Fisker Karma? It seems that most people would say they are, and that means the sales prospects look good, says Merrill Lynch. The Bank of America/Merrill Lynch global research firm recently looked into the future of cars with plugs and came away with a positive impression of EVs and PHEVs – as long as those vehicles leave a good impression on the potential buyer. Analyst Steven Milunovich told B-Net that, "EVs need to appeal to consumers on a psychological level, such as prestige and driving enjoyment. [...] When the cost of EVs is reasonably close to gas cars, then I think we reach a tipping point where people will start buying electric cars as long as they're cool and fun to drive. We'll soon start seeing all kinds of customizing, like adding wi-fi or LED lights."
It'll take a while for the cost of plug-in cars to get "reasonably close" to ICE vehicles. Until then, the pure environmental argument for EVs and PHEVs will be enough to sway some people. How many? Well, that's what we'll have to keep watching to find out.
[Source: B-Net]
Reader Comments (Page 1 of 2)
Boyprodigy1 1:12PM (11/10/2009)
I don't agree with this for a second. This is the same flawed logic that made the Chevy Volt a $40k car and thus out of reach of most people looking to buy cars. Do you have any idea how many sales a car company would get if said car company were to make a standard looking/feeling electric car in the mid 20's range? COMMON SENSE!!!
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Jason M. Hendler 1:26PM (11/10/2009)
The vehicle's price has little to do with how attractively styled it is. The Volt was going to be $40,000 whether it looked like a conventional sedan or a luxury coupe like the Converj. Given that the price was going to be $40,000, it was imperative that the Volt was styled such that someone willing to spend $40,000 would buy it.
Doug 1:30PM (11/10/2009)
The Volt is expensive because of the batteries and other technology. Given that EVs are going to be costly to begin with, it's a good idea to give them some styling that matches the price. It helps consumers feel good about their purchase.
Boyprodigy1 9:41PM (11/10/2009)
Are you guys serious? If the battery is the only reason that the car costs so much then lets take a look at it. Now i did my research on wikipedia, so you can take it with a grain of salt if you'd like, but i found that the Volt is believed to have a 16kWh battery pack in it. Lets be naive and assume that GM is willing to dish out $650 per kWh for the battery pack. Now you have a $10400 premium over another car. And that is what it takes to push a larger family sized luxury sedan for 40 miles. You have the electric motor and AC inverter/controller too. Thats another $2k... tops. So you have a $12k premium over a normal car for a mid sized sedan. I see no reason this car shouldn't cost around $30k. But besides that why didn't they make a smaller car? Why not make a compact sedan, or even a sport sedan style? They could cut weight and drag coefficient, and make the battery pack even smaller, thus making the "heavy premium of the battery pack" a lot less. But lets face it; An ER-EV is going to require less maintenance and replacement parts than a normal vehicle. GM really sees this as viably cutting into their profits, and thus will do what they can to make all of the rumors about the EV seem true, and they aren't bad at it. You guys don't seem stupid and you bought it...
Doug 11:03PM (11/10/2009)
You're taking a rather simplistic view. There are also development costs that have to be recouped. At $40K it will likely be selling at a loss initially.
At any rate, the point is that the styling isn't the lion's share of the cost.
Brammofan 1:12PM (11/10/2009)
It amazes me that Merrill Lynch has any credibility left after its various scandals. (See http://bit.ly/1Psq1C ) Why should I care whether it says that EV cars should be sexier? Does a financial institution have some special credibility I'm not aware of when it comes to EVs?
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Doug 1:31PM (11/10/2009)
Is there any merit to the Coda approach?
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Sebastian 2:37PM (11/10/2009)
I'm curious about this, too.
Joeviocoe 5:25PM (11/10/2009)
geez, the coda looks like a late 90's japanese sedan... An undergraduate student could have designed a better exterior.
Doug 5:47PM (11/10/2009)
Hence the question.
Here's a relevant 4 minute video: Is it enough to be 'green,' or does auto design matter? - SmartPlanet.com
http://www.smartplanet.com/technology/video/is-it-enough-to-be-green-or-does-auto-design-matter/343496/
"Panelists include: Kevin Czinger, CEO of Coda Automotive; Paul Wilbur, CEO of Aptera; Trae Vassallo, a partner at Kleiner Perkins Caufield & Byers; and JB Straubel, CTO of Tesla Motors."
Reality Hurts 1:52PM (11/10/2009)
Well duh. I am upset that they spent so much time researching something that is clearly common sense. Mass appeal requires a vehicle that looks good, or at least normal (coda). The aptera is ugly, but that does not mean that it will be a failure, it will likely be a niche product and be the cornerstone of Aptera for when they move on to start producing real cars.
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Carney 2:13PM (11/10/2009)
I realize this is AutoBlog GREEN, but the environment is NOT the only argument for switching away from petroleum fuel.
There are two other big ones: economic and strategic.
The economic argument is tougher to do for BEVs and PHEVs since they cost more up front. But if Tesla is right that it takes far less to "fill your tank" electrically (and that EVs require fewer oil changes and less maintenance), then you can use that argument to defray the cost a bit. Also, on a macro scale we can talk about liberating our economy from OPEC. The oil shocks of 1973, 1979, and 2008 were devastating for the economy, killing jobs, causing recessions, etc.
The geostrategic argument is similar - OPEC is dominated by Mideastern nations, and the Mideast has 70% of the world's oil reserves. OPEC-inflated oil prices not only fund many of the world's worst governments but eventually end up spreading fanaticism, arming terrorists, and advancing nuclear and other weapons programs.
Since only 3% of our electricity comes from oil and the rest comes from domestic sources (coal 50%, natural gas and nuclear 20% each, hydropower 5%, solar, wind etc 2%), switching our auto fleet to electricity would free us from oil dependence.
I still for the record support switching to alcohol fuel at least as a short to mid term step as logistically, practically, and economically easier, but there we are.
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Joeviocoe 5:33PM (11/10/2009)
Carney, I think you are already very much on record for you love of alcohol based fuel. I am the same way with my biodiesel. Those two viewpoints are pretty much the same and not at all exclusive.
Unfortunately, end-users have a short-sighted, yet conservative, approach to the economics. Yes, it will cost more out of pocket for the early adopters of EV technology. Tesla has known this and has admitted that the high margin of profit from both the Roadster and the Model S are meant to facilitate driving down the cost of the manufacturing of EV and to better allow for economy EVs such as the Blue Star.
For now, invest in the more expensive brands to at least break the monopoly of oil on our personal transportation and national security. With the help of biofuels too :)
Because honestly, at this point in time, it probably won't save you money overall.
Dave B 3:44PM (11/10/2009)
This article is on the money.
I have many friends who would love a hybrid or electric sports car. I know others who won't buy a hybrid or electric until it comes with a convertible option.
As much as we would like them to, we know that EV's are not going to come out in the 25K range initially. Their initial price will be in the 40K-50K range. That is the price range of a "sports car" not an "eco-box".
If it's going to be priced like a sports car, it better look like a sports car.
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letstakeawalk 3:55PM (11/10/2009)
Your friends would love the Fisker Karma S.
http://images.google.com/images?q=fisker+karma+s&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&ei=MtP5SrjcGs35nAfg7M32DA&sa=X&oi=image_result_group&ct=title&resnum=1&ved=0CBAQsAQwAA
polo 4:30PM (11/10/2009)
*yawn*
Even the Nissan Leaf is going to be in the $25K range, and the Reva (being built where I am) is going to have EVs out in the high-teens to mid-20s range by this time next year. Give it 3-4 years, there will be plenty of 20K-range EVs being rushed out or announced.
Dave B 3:56PM (11/10/2009)
Amen Carney.
Foreign oil dependence is as important as the environment, perhaps more.
Having lost a brother in Iraq, I am sick and tired of knowing that every time I put gasoline in my tank, I am giving money to "those who would destroy us".
I am 100% in favor of "ANY" technology that allows us to use something other than oil from the Middle East.
The technology is now here to make the transition off of foreign oil. All we need now is the will and the desire.
We need to stop putting gasoline in our tanks just because it is easier and more convenient.
-Yes it will take a little effort.
-Yes it will be more difficult.
But it is better than having Americans killed protecting oil, and it is better than being one oil crisis away from another economic disaster.
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Carney 4:11PM (11/10/2009)
I'm terribly sorry for your loss, Dave. Will raise a glass to him and all who served tomorrow.
augustus 4:18PM (11/10/2009)
Yes these cars need to look good. This is why the Tesla roadster sells- it packages an electric car into a sports car body and gives it sports car performance. Ideally the Tesla S, Fisker, etc will be viable options to a BMW 5 series, a Mercedes, a Cadillac, a Lexus, etc. These are the autos that Tesla is competing against and a well styled car is a must.
And really for the price why can't a BEV have a nicely aggressive style? Who wants to buy a Pontiac Aztek BEV?
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why not the LS2LS7? 2:09AM (11/11/2009)
Wow, thanks for the news flash. Martin Eberhard said as much in his conversations (or comment wars, take your pick) with me on ABG two years ago. And he was right. For the price EVs currently command, people want their vehicle to look exceptional on the road.
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