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Posted on Wed, Oct 21, 2009 : 8:01 a.m.

University of Michigan study: Electric vehicles' cost is main factor for consumers

By Nathan Bomey

Price trumps environmental factors in consumers' consideration of whether to purchase an electric vehicle, according to a University of Michigan study released this morning at a high-profile auto conference in Detroit.

Some 46 percent of consumers said they'd consider paying a $2,500 premium for a plug-in hybrid electric vehicle. But only 30 percent said they'd consider a $5,000 premium, and just 14 percent said they'd weigh a $10,000 up-charge.

"There’s widespread interest in plug-ins as well as widespread resistance to the expected cost of plug-ins," said Richard Curtin, director of Reuters/U-M Surveys of Consumers, led by the U-M Institute for Social Research.

The national survey, released today at "The Business of Plugging In," a conference organized by the Ann Arbor-based Center for Automotive Research, studied a representative sample of 2,513 adults between July 2008 and November 2008.

The survey is another reminder to major automakers that they must continue to drive down the cost of lithium-ion battery technology, which is critical to ensuring affordability of electric vehicles. The industry's first mass-marketed semi-electric vehicle, General Motors' Chevrolet Volt, to be released in November 2010, is likely to cost close to $40,000.

The study also underscores the importance of the federal government's promised $7,500 tax credit in spurring the sales of electric vehicles.

The good news for automakers is that consumers appear willing to consider alternatives to internal combustion engines.

"I expect that we’ll see a significant niche for electric cars," Curtin said at the conference. "How fast and how big a niche, we cannot know for certain at this point. But we can say with a great deal of certainty that consumers are ready to experiment with alternative technologies in transportation."

Contact's Nathan Bomey at or (734) 623-2587. You can also follow him on Twitter.



Wed, Oct 21, 2009 : 9:17 p.m.

What everyone forgets is electricity is not free nor green. Things cannot be considered green if the manufacture and delivery process of a product is not green. If we all went to electric cars, our already taxed electrical system would be overloaded. Generating more electricity efficiently is not a green proposition. Wind power cannot make up the difference and is still not cost effective or technologically efficient. All these technologies have a long way to go, and until they are cost effective compared to oil, nat gas, or coal they will never become main stream. Government subsidies don't work because they create an artificial market and you and I are the source of government revenues, its taking from one hand and giving to another. I'm amazed how everyone is jumping on the electric car bandwagon when its really unproven from an economical and technological standpoint.


Wed, Oct 21, 2009 : 7:46 p.m.

THANK YOU, debling. I have commented repeatedly on similar articles on how externalities should be factored into economic decisions and all I get is the equivalent of blank stares or derision. It's so refreshing to hear another rational voice.


Wed, Oct 21, 2009 : 4:24 p.m.

For the practical consumer the choice of vehicle will always be driven by the $/mile driven. Electric vehicles won't cut it if they don't save the consumer money over the life of the vehicle. That is why the VOLT is bound to be a flop if priced at $40,000/year even at $4/gallon. Gas prices would have to reach close to $10/gallon in my view before a large shift to electric would occur. Even then the problem with electric vehicles remains the same as it has been for a century --> energy storage density. One thing we can do to help change the economics of alternative energies vs. legacy energy sources is to make sure the cost of environmental and health damages are truly reflected by the polluting fuel. Today the damages (acid rain destroyed lakes and fish stock, tourism losses, structural metal corrosion, medical bills, and potentially real estate losses from coastal flooding) are being subsidized across society. Until we have a pollution and carbon tax, dirty, legacy fuels will always appear cheap and clean fuel vehicles will have an uphill battle.


Wed, Oct 21, 2009 : 12:55 p.m.

aareader is definitely right on the development curve. Same applies to the power grid: people have already proposed solutions to make smart grids, but there just has not been a need for them yet. Something else that is over-looked with life of car costs - maintenance. An electric car as virtually no fluids. No oil changes, no gas, no transmission fluids, no coolant, etc. Yes, batteries can be expensive, but you are not paying for batteries on top of the expenses of conventional cars.


Wed, Oct 21, 2009 : 12:34 p.m.

Batteries have a SOH state of health, eventually they all die. BUT, if you can get 100k miles it is acceptable. The battery packs for a 40 mile range EV are probably in the 15-20,000 $$ range right now.


Wed, Oct 21, 2009 : 11:32 a.m.

My main concern is battery life and what we will do with them once they die. This also affects resale.


Wed, Oct 21, 2009 : 10:10 a.m.

If my gas savings over a period of 10 years(which is my average lenght I keep a car ) pays for the car then I'm sold!! Currently at $2.50 a gallon we spend $2,000.00 a year on gas...we are saving up for a Volt because $4.00 a gallon and hiher will be back!!


Wed, Oct 21, 2009 : 9:57 a.m.

I have been interested in electric cars forever. Obviously the issue is the energy density of the device to supply the power. Gasoline and Diesel current have that upper hand so electricity is for now more expensive. Lithium Ion Batteries show promise and happily there is a LOT or research in Michigan on Battery Technology. Another electric power option may be Ultra Capacitors. If this technology advances enough the need for large heavy batteries may diminish as the major power source. The energy density of these kind of capacitors could be very large for almost no added weight. For me it is an exciting time to see electric car technology evolve. The first portable computers had high premium costs. Today they are super cheap compared to the power they provide. I think electric cars will enjoy the same development curve.