Toyota executives announced Monday they are scrapping plans to sell a new line of electric vehicles, a possible indication the electric vehicle market in the United States has failed to gain traction.
"The current capabilities of electric vehicles do not meet society's needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge," Takeshi Uchiyamada, Toyota's vice chairman, told Reuters at a press conference in Tokyo.
Electric vehicle advocates are crying foul, accusing Toyota of using widely known public misconceptions about electric cars to further its agenda of promoting hybrid vehicles, an area that has been very lucrative for the Japanese car maker.
“If I could swear, I would swear,” said Jay Friedland, legislative director for Plug In America, a non-profit working to speed up the shift from gas to plug-in vehicles. Friedland says he owns a Toyota Rav 4 Electric Vehicle that he’s been driving for more than a decade.
“I’ve been told over and over again that my car won’t work for me, yet in the past 11 years, I’ve driven 95,000 miles,” he said in a phone interview on Monday. “As gas prices rise, people want an alternative.”
Friedland says he believes Toyota is being short sighted in its decision not to invest further in electric vehicles, but Toyota spokesperson Cindy Knight says the decision is based upon the sagging sales numbers of Toyota’s competition.
“Competitors vehicles are not making sales targets,” Knight said. “It doesn’t seem that the market has any more room for another electric vehicle.”
A report from the Electric Drive Transportation Association, shows there have been 25,290 plug-in vehicles sold in the U.S. so far in 2012 and 17,735 sold in 2011.
U.S. President Barack Obama has set a goal of getting one million electric vehicles on the road by 2015, a goal some experts say will be nearly impossible to achieve.
In an interview with the Associated Press, Sandy Munro, president of Munro and Associates, a company that analyzes vehicle production and expense for automakers, estimated it takes about $60,000 to make the electric Chevy Volt. General Motors sells the car for roughly half that cost, said Munro.
The U.S. government offers a $7,500 tax credit to consumers who buy plug-in hybrids such as the Volt or all-electric vehicles such as Nissan’s Leaf, and additional discounts are available as well. Chevrolet is offering discounts of almost $10,000, or about 25 percent of the Volt’s sticker price.
The U.S. government has invested nearly $7.5 billion into the electric vehicle industry through 2019, including $2 billion in tax credits. That’s according to a report released last week by the nonpartisan U.S. Congressional Budget Office.
In the report, analysts say tax credits have helped the sales of plug-in cars, but it would require a tax credit of more than $12,000 to get the lifetime cost of electric vehicles in the same range of their gas-only counterparts.
“Given current prices for vehicles and fuel, in most cases the existing tax credits do not fully offset the higher lifetime costs of an electric vehicle compared with those of an equivalent conventional vehicle or traditional hybrid,” CBO analysts wrote.
Supporters of the electric vehicle movement insist the investment is necessary to get the country on the path to fuel independence.
In a statement issued by the Electric Drive Transportation Association, Brian Wynne, the association’s president said tax incentives are essential to getting electric vehicles to the masses.
“While we do not agree with all of the assumptions made and relied on in the report, [the] CBO’s illustrations do show that tax incentives can help move electric drivers into the mainstream and reduce gasoline use and emissions, while growing the industry,” Wynne said.
As alternatives come, Toyota says it will continue its investment in hybrids, releasing 21 new models over the next three years.