U.S. is trailing the rest of the world on EVs

As oil prices have tumbled, one thing has become clear: Electric vehicles are making much greater headway in the rest of the world than they are in the United States.

U.S. sales have remained flat over the past year after increasing steadily over the last decade. But sales have actually accelerated in some European countries, and several now have a larger percentage of their fleet in EVs than America does.

The website InsideEVs estimated that 160,670 EVs were sold around the world through the month of May, 34 percent ahead of last year during the same period. But U.S. global market share is declining: Domestic sales totaled 43,973 through May, a fraction ahead of last year’s pace. But when the June numbers came out, the U.S. had sold only 10,365, off 16.2 percent from the same month in 2014.

Norway is emerging as the world leader in making the transition from gasoline to electric vehicles. An incredible 33 percent of new-car registrations in the first quarter of 2015 were for EVs. Volkswagen’s e-Golf, the electric model, now sells 71 percent of its cars worldwide in Norway, giving it 40 percent of the Norwegian market. Tesla is not far behind with 16 percent of the market. Oddly, the Toyota Prius, the pioneer in the hybrid field, is seeing almost no sales now. People are beginning to opt for all-electric rather than the halfway point of gas-electric hybrids.

The Norwegian government has given EVs a raft of advantages over traditional gasoline-powered engines. Here’s a brief list:

• EVs get access to bus lanes
• The government has provided free charging stations
• EVs get free access to all toll roads
• EVs get free rides on ferries
• EVs get free parking in municipal parking spaces
• EVs carry a low annual road fee
• EV buyers pay no tax on purchase

Some of these advantages will eventually have to be cut back as the number of EVs on the road grows. But for now the incentives are huge and are not costing the government a great deal of money.

Other European countries have also been successful in promoting the purchase of electric vehicles. EVs now make up 5.7 percent of new car registrations in the Netherlands and 1.2 percent in the United Kingdom. The U.S. counts only 0.8 percent of new registrants as EVs, a figure that is matched by France. Germany and Japan counted only 0.6 percent of new registrations during the first quarter.

The reason EVs are doing so well in Europe is easy to identify: Europe imports nearly all its oil, and gasoline prices are much higher, mainly because of the imposition of heavy taxes. Gasoline sells for $8 a gallon in much of Europe, while prices are generally below $3 per gallon in this country. But air pollution is also playing a role. Pollution in some European cities has gotten as bad as it is in China and other parts of Asia. Paris shut down all auto traffic for three days last year when air pollution reached the same levels of Beijing and Shanghai. Sales of the Nissan Leaf – now the best-selling electric vehicle in the world – skyrocketed during this period. It’s expected that if emergencies like the one in Paris become commonplace, electric vehicles will be exempted from the ban.

Meanwhile, it appears that electric vehicles are finally taking off in China, which is now the world’s largest auto market. Back in the early 2000s, the Chinese government promised it would have 500,000 EVs on the road by 2011. Officials publicly announced they would be challenging the American industry by then. But as late as 2014, China was selling only 600 EVs a month, at the same time the U.S. was selling 6,000.
All that has reversed over the past year. In December, China sold 27,000 electric vehicles, almost 30 times the number as the previous January, and surpassed the U.S. in monthly sales for the first time. In 2015 China will probably become the world’s largest buyer of EVs.

All this has happened while Tesla was failing in its attempt to break into the Chinese market. The reason is plain: Tesla is marketing a luxury vehicle, something that few Chinese can afford. Meanwhile, the Chinese manufacturers, BYD, Kandi, Chery Zotye and BAIC, are selling no-frills vehicles that can only reach about 35 miles per hour. But such utilitarian vehicles are perfect for Chinese families to buzz around their cities for shopping and short commutes. There is even speculation that the Chinese manufacturers may start marketing their vehicles in the United States, where they would compete with entries such as the Chevy Volt and the Ford Focus. There is even talk that such vehicles may be able to feed off the rise of Uber for short-term ride-sharing in an urban setting.

Tesla’s moment of truth will come with the expected 2017 release of its Model 3, the $35,000 version of its EV, aimed at the average car-buyer. Then we will see if Tesla can really meet its deadlines, and if it can sell its highly stylized car on the mid-market. If it can, Tesla will probably have oodles of customers in both Europe and America, giving it a shot at the 500,000 sales Elon Musk has declared as his 2020 goal.