The Green Vehicle Market

A123 Systems Inc - is a major supplier for batteries of electric and hybrid vehicle. They have had major problems with their batteries causing fires. As a result of this and the slow acceptance of these types of vehicles, the company filed for Chapter 11 bankruptcy this week.

GMs CEO, Dan Akerson, forecasted 40,000 sales of the plug-in Chevy Volt for this year. However, as of September, the company has only sold 16,348 so far. This is up from last year’s 7,997 but still not the 40k anticipated and the company halted production of the Volt for 84 days due to overstock on the holding lot. The people that do buy the Volt, however, will notice they only need to fill up the gas tank about every 900 miles on average.

Nissan CEO, Carlos Ghosn, states that the sales of their Nissan Leaf (the only mass-market electric car sold in the US that doesn’t need a backup gasoline engine), has fallen 28 percent this year. The company states its hurdlers include its price and consumer complaints that the batteries aren’t lasting the 73 miles per charge that the US Environmental Protection Agency says it averages. However, the cost saving to operate a Leaf is about one-half to one-third the cost of a comparable gas car.

Toyota CEO, Akio Toyoda, states the Prius family launch continues its success and domination of the hybrid market with more than 50 percent market share. The original Prius leads the way for consumer preference. It seems to have the best combination of marketing mix, fuel mileage, and price tag.

The biggest downfall for this market is the purchase price. The original Toyota Prius hybrid starts out at only $24,000 which is probably why it is doing so well in this market when compared to the much higher priced Leaf at about $36,050. However, the Leaf is still cheaper than the previously noted Volt at $39,200. Why do these company’s put these vehicles out there with such high prices. Think about this, unless you’re more conscious of the carbon footprint...