The coming weeks offer big new showcases for the humble electric-vehicle.
Auto makers, rushing to meet tightening emissions standards, are unveiling new battery-powered vehicles at the Los Angeles Auto Show this week, mirroring last month’s flood of such cars by European companies. These curtain-raisers will be followed by first shipments of General Motors Co.’s Chevrolet Bolt, a $35,000 Tesla fighter that goes on sale next month.
What’s missing are consumers, however. Auto makers are suffering from a glut of U.S. sedan and coupe inventory amid strong demand for light-trucks. The coming addition of electric-vehicle capacity could worsen that oversupply if shoppers continue to prefer pickups and sport-utility vehicles to plug-in cars.
Globally, sales of plug-in electric cars are up in 2016, driven by Chinese customers taking advantage of aggressive tax rebates and other incentives. But total volumes remain less than 1% of the 83 million light-vehicles likely to be sold this year. Tesla Motors Inc.’s pricey electrics aside, cars like Nissan Motor Co.’s Leaf and BMW AG’s i3 haven’t widely caught on, and many auto makers say it is unclear when demand for electric vehicles will blossom.
That is sobering news for executives hoping they will help meet tougher emissions standards. China, Europe and the U.S. have established regulations prodding development of electric cars. Whether tax incentives and extensive efforts to lower battery costs can spur demand in the short term isn’t a sure bet.
Moody’s Investors Service predicts 19 new electric models will go on sale in the U.S. alone by 2020, potentially tripling what is currently available. Auto makers presenting in California this week, including Tata Motors Ltd.’s Jaguar and Hyundai Motor Co., are expected to give updates on how they will compete in this electrification race, and Fiat Chrysler Automobiles NV will show off a plug-in version of its popular Pacifica minivan for the first time just before the Los Angeles Auto Show opens.
European auto makers have gotten more optimistic on electrics in the wake of Volkswagen AG’s emissions-cheating scandal, which tarnished diesel’s image as a green alternative to gasoline. Volkswagen and Mercedes-Benz parent Daimler AG, which combined sell 13 million vehicles a year, predict electrics will account for between 15% and 30% of all vehicle sales by 2025.
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