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Europe Slow to Warm Up to Electric Cars

Wednesday, May 09, 2012 - 02:57 PM

A charging station in Berlin (photo by Kate Hinds)

Europe is home to expensive gas, a growing wind farm industry and aggressive carbon reduction goals.  But so far, when it comes to electric cars, il n'y a pas d'amour -- pas encore.

Transportation ministers and industry leaders, speaking last week at the International Transport Forum in Leipzig, Germany, said government subsidies and ever-increasing numbers of charging stations aren't yet enticement enough to convince European consumers.

Case in point: Sergio Monteiro, Portugal's Secretary of State for Public Works, Transport and Communications, said his country is laying the groundwork for EVs -- but so far his fellow citizens aren't buying.

"We have more than 1,300 charging points," he said, adding that Portugal is also financially incentivizing the purchase of EVs. "The average cost (of an electric car) is around 35,000 euros in Portugal, and we have a reduction of five thousand euros subsidized by the state."

But, said Monteiro, "we only managed to sell 200 vehicles last year." And 60 of those went to government administrators.

Monteiro dusted off a phrase uttered by the Irish transport minister earlier that day.  "It was like the field of dreams," he said. "You have the infrastructure, then services would come. That was not the case." He added that it was "living proof that infrastructure can only do so much -- you need to break a number of barriers." And chief among them is cost. Even with a 5,000 euro reduction, Monteiro said, EVs are too expensive for the average Portuguese citizen navigating austerity measures.

The wait for lower prices may be a decade away. Nissan vice president Mitsuhiko Yamashita said it usually takes ten years to reduce the price of new technologies by half. He used airbags as an example, saying it now cost automakers as much to put six airbags in a vehicle today as it did to include two a decade ago. "We can do the same thing for the EV, but...it takes maybe five to ten years, ten years on average. But during that time frame, I'd like to expect some type of support from the government."

While some European countries offer subsidies to purchase EVs, not all do.

Another issue hampering EV adoption is standardization. Europe is home to multiple electrical grids, and different EVs have different plugs. Pat O'Doherty, the CEO of Ireland's Electricity Supply Board, said "I should be able to drive my electric vehicle from Dublin in the future, down through Britain and charge it, down through France and into the South of Spain." He added that even the technology governing payment systems at public charging stations differs from place to place.

Yamashita later said ruefully "that's my headache at this moment."

Nissan launched the all-electric Leaf at the end of 2010, but so far sales have been underwhelming. Yamashita tried to put a good face on it. "We already sold more than 27,000 vehicles worldwide as of the beginning of April," he said. "Thirteen thousand in Japan, 11,000 in the U.S...We just started sales in Europe but we've sold 3,000."

Those are stark numbers, and it doesn't look much better when you read reports that Nissan wants to sell 20,000 to 25,000 of them in Europe in 2012. The company is trying to boost sales by moving production to the U.K., which will lower costs, and also redesign it in order to appeal to European tastes.

One bright spot for the Leaf, though, can be found in Norway, where 1,000 of them were sold in six months.

But on a large scale, "it will only work if the customer benefits financially," said O'Doherty. He said the Nissan Leaf had been selling better in Ireland since Nissan had knocked 5,000 euros off the price.

Watch a video of the conversation at the ITF summit below.

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