Neighborhood Electric Vehicle Sales To Climb

By Danny King June 20, 2011

NEV Sales Looking Up.jpg

Industry watchers who questioned the decision by snowmobile and watercraft maker Polaris Industries to buy Chrysler's neighborhood electric vehicle subsidiary earlier this year just got a pretty good answer. A Pike Research report predicts that annual sales of NEVs will jump almost 50 percent over the next six years as companies, governments and private car owners look to cut their refueling bill by buying the low-speed EVs. Global annual NEV sales will increase to almost 55,000 in 2017 from 37,000 this year, with North America accounting for almost half those totals, Colorado-based Pike Research said in the report.

In all, about 695,000 NEVs will be on the road in 2017, up from 479,000 in 2011. And those totals could jump considerably if China makes low-speed EVs street legal in the next few years, Pike Research Senior Analyst Dave Hurst told Auto Observer. Such a jump lends credence to the decision by Polaris, which specializes in ATVs, snowmobiles and other recreational vehicles, to agree in April to buy South Dakota-based NEV maker Global Electric Motorcars from Chrysler. With gas prices not expected to go down any time soon, fleet buyers such as corporate and university campus operators and governmental entities, which represent about two-thirds of NEV sales, are likely to buy more low-speed zero-emissions vehicles.

The lead-acid batteries used in NEVs keep the vehicles' average price down to about $9,000, making the cart-like vehicles a more viable option for many than full-speed battery electric vehicles (BEV) that start in the low $30,000 range. "Consumers that want this particular type of vehicle aren’t going to want to spend the extra $15,000 to $20,000 to get a full functioning battery electric vehicle," said Hurst. "It's kind of a sleepy industry." NEVs, typically sturdier and have more features than the golf carts to which they are sometimes erroneously compared, are particularly useful on closed environments such as large factory or government complexes, in parks – where tiny NEV pickup and flat-bed models often serve as landscaping crews' work vehicles – and in planned residential communities.

GEM's Role
GEM helped give birth to the industry when it was founded in 1998, and capitalized on California's zero-emissions vehicle laws. Chrysler bought GEM in 2000, and the company, which has cumulatively put about 45,000 vehicles on the road, had been a part of Chrysler's active electric-drive development team at its Michigan corporate headquarters before Chrysler went bankrupt in 2009. With Italy-based Fiat now controlling Chrysler and the two companies pursuing other low-emissions and fuel-efficiency technologies, GEM, which has six models with prices ranging from $7,500 to $11,725 and generated about $30 million in sales last year, became expendable.

Meanwhile, the competition is heating up. The parent company of Cessna Aircraft last June introduced its own street-legal, low-speed battery-powered NEV. Textron’s E-Z-GO unit's 2Five can travel as fast as 25 miles per hour on its 48-volt electric motor. The two-passenger and four-passenger models, which were launched last year at about 40 dealerships across the U.S., retail for about $9,000. Other NEV manufacturers include Zap Jonway, a Chinese-American joint venture, Miles Electric Vehicles and the troubled South Korean NEV-industry giant, CT&T, which may be helped most by an uptick in sales of low-speed EVs, especially in Asia and the U.S. The company has been embroiled recently in apparent financial troubles at home that have cast a shadow over its U.S. plans.

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