Nov
23
Response to “Money Killed the Electric Car” by Curtis
Posted by: konrad | November 23, 2011 | Leave a Comment
Image source: ev1.org
In his blog post, insightful business blogger Curtis Valentine comments on the failure of the EV1, General Motors’ first electric car. The futuristic two-seater inspired a cult-like following among the 1,100 EV1 lessees, who protested when, in 2002, they were not allowed to buy their vehicles out and were ordered to return them to be crushed. Curtis advances the theory that oil companies were behind the move, however there are other possible reasons. While the role of oil companies remains a conspiracy theory, the decision can be justified in other ways.
According to then-CEO Rick Wagoner, the demand still wasn’t high enough to make it profitable. While it was originally valued at just over $30,000 by GM, some estimates reported the cost of producing each vehicle to be between $80,000-$100,000. When all other relevant costs were added, such as the production of replacement parts for 15 years as mandated by the government, the viability of the innovative product was likely put in question. Nonetheless, the EV1 case resulted in negative publicity for GM.
It can be argued that it was in fact a LACK of money that killed the electric car. Unfortunately for GM, the investment may have been paying off about now, with oil prices finally high enough for many consumers to consider an electric vehicle.