2012 is approaching and many well-known car companies are hoping that it will be the year of electric. Companies from Ford to Toyota and Honda are debuting new electric vehicles, with some improvements on the initial models. In spite of the tepid response to cars like the Nissan Leaf, automakers are hoping that improvements from faster charging, safer batteries and a larger variety of designs will encourage people to go green.
Among the most anticipated models debuting next year is the Ford (F) Focus Electric which is advertised to get as much as 100-miles per gallon. While the car doesn’t run on gas so that number actually refers to the MPGe or the miles in each unit of electric energy roughly equivalent to one gallon of gas. The MPGe is a term that, should electric cars begin to gain popularity starting in 2012.
Some are touting the electric focus as a major step forward for this segments of the car industry both for the strength of its MPGe rating and other assets like compatibility with 240-volt rechargers. While the Leaf, which can travel only relatively short distances, takes as long as six hours to power up, the new offering from Ford cuts that time in half. Will this be enough to convince drivers to make the switch? That remains to be seen, as the new features come with a hefty price tag. Ford’s electric focus is priced at $39,995, roughly $5,000 more than the leaf and roughly the same as Chevy’s Volt, which effectively combines gas and electric to expand its distance.
Another factor that could influence sales is the range-per-charge which has yet to be released. While the 100mpge will likely help it improve beyond the existing models, it may still fall short of enough to convince consumers to embrace the technology.
Even with the weak sales of the Leaf though, car companies seem to feel that if they are able to release a product that exceeds the capacities of previous models, it will catch on.
Among the companies bringing new electric cars to the market in 2012 is Fiat, who intends to release an all-electric version of its 500. Mitsubishi also intends to release a commuter car similar with aspects similar to the leaf.Honda (HMC), not wanting to miss out on the trend will also electrify its fit in the coming year and has mentioned putting out an electric accord as well. Toyota (TM) which has established itself as a leader in green automobiles will launch new electric versions of its popular RAV4, making it the first electric SUV. They also have a plug-in version of the Prius that gets only 15 miles on electric alone which could convince people away from buying it.
The effort to debut electric cars seems to be more of a competition between companies than it is the product of public demand. If anything, electric cars have been through the ringer more than ever lately as there seems to be increasing evidence that the limitations facing these vehicles, largely a lack of infrastructure for charging or mobile charging, are too great to overcome. They also faced an additional roadblock earlier in the week when one Morgan Stanley analyst cut his price target on Tesla by 37 percent.
It was not the up-to six digit price tag on Tesla’s roadster electric vehicle that prompted the cut though, it’s just that that concept seems to have a fair way to go from acceptance. Electric vehicles, as the research note read “are not ready for prime time.”
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer