The chicken or the egg? Forget that. What about the government subsidy or the electric car?
Renault-Nissan Alliance chairman and CEO, Carlos Ghosn, told media this week that in order for electric vehicles to be in the minds of consumers there needs to be government support in the form of subsidies.
Without subsidies, Ghosn warned, there is little to no demand from private consumers.
“Electric car sales are not driven by consumer demand. Consumer demand is very limited for electric cars. [Sales] are driven by emissions regulations, and by mainly state and company incentives, which is pushing the consumer to buy these types of cars,” Ghosn said.
“It is very difficult to make the electric car an attractive buy without government subsidies for the consumer,” he said. “So how can you support electric cars if it depends on government subsidies? We need not for an infinite period of time: just to make sure that you jump-start the sales.
“When you jump-start the sales, and you get the scale you need, then you can be on your own. That’s why the electric cars are mainly thriving in countries where the government is supporting the consumer: China, being the number one, the United States being the second one.
“In the United States you have not only federal support but you have state support, which is different from one state to the other. And we can see that the sales of electric cars is higher in states [with more support].”
And what about Australia?
Well, it wasn’t on a list of markets rattled off by Ghosn, and he reckons it won’t be on the list anytime soon, either.
“I don’t think, today, that there is anything that would lead us to think that Australia is going to see electric cars [in mass numbers anytime soon]. Usually electric cars take off when there is a country policy about supporting zero-emission transportation,” he said, pointing out that China, Japan, the United States, Germany, France, and the UK all have subsidy programs in place.
“So unless you see a public policy saying ‘I favour zero-emission cars’, ‘I favour new technology cars’, which are usually the electric cars, and eventually plug-in hybrids … this is where many countries are giving a subsidy to the consumer to encourage him to buy these types of cars and at the same time they are supporting communities to develop charging infrastructure, because they know if there is not enough infrastructure there’s not enough take-up.”
Nissan's Leaf electric car has been part of the brand's range since 2011, and over that time has seen about 600 sales locally. Pretty measly, even Ghosn admits, but the company has confirmed it will offer the next-generation Leaf, due in 2018, and that its enhanced driving range should make it appeal more to private buyers.
Ghosn suggested that while battery tech is not at the point to offer budget car buyers an electric solution just yet, that the process of making them is simpler, requiring fewer moving parts and, therefore, greater potential for profit.
“Electric cars, by definition, are simpler to assemble: there is nothing expensive in the technology of electric cars – [they] can be extremely competitive. But as long as electric cars represent less than half a per cent of the total industry, it’s very difficult for them to compete against 99.5 per cent of the industry, which are internal-combustion engines.
“The subsidies are important to jump-start the technology,” he said.