Navigant Research Blog

Don’t Get Too Fired Up Over Tesla Mishaps

— November 14, 2013

Despite being named 2012 Car of the Year by Automobile Magazine and Yahoo! Autos, and chosen as one of Time magazine’s best inventions of 2012, recent media headlines in 2013 haven’t been quite as kind to Tesla Motors’ Model S.  Over the past two months, three fires in Tesla’s vehicles have gained widespread attention.  The fires have significantly contributed to the 20% slide in Tesla’s stock price this month, although the stock is still up more than 300% since the beginning of 2013.

Pushing aside the media hysteria, let’s take a look at the facts.  On average, 17 automobile fires are reported every hour in the United States (194,000 on average every year between 2008 and 2010), killing an average of four people every week.  Of particular importance, mechanical or electrical failures or malfunctions were reported in roughly two-thirds of automobile fires.  As for the Tesla fires, all three involved car crashes; the fires did not begin spontaneously as the result of electrical failures or malfunctions, and in all three incidents the driver walked away without injury.

Technology Comparison

For a deeper comparison of electric and internal combustion engine (ICE) vehicles, it’s useful to analyze the safety of the vehicles more generally.  This can be achieved through analyzing vehicle fires and deaths per billion miles driven.  EVs are approaching 1 billion miles driven.  The Chevrolet Volt (300 million), Nissan LEAF (323 million), and Tesla Model S (100 million) represent the majority of these electric miles driven.

According to the U.S. Federal Highway Administration, roughly 90 highway vehicle fires and 0.15 highway vehicle fire deaths occur in ICE vehicles per billion miles driven.  Conversely, EVs have had a total of four reported fires and zero fatalities for the first near one billion electric miles driven.  Thus, ICE vehicles are 22.5 times more likely to catch on fire than EVs.  It’s also important to keep in mind that EVs are the first models of their kind, essentially experimental vehicles, and have still been able to far surpass the safety record of ICE automobiles.

Non-Explosive

So why is there so much attention and scrutiny on Tesla? Considering the frequency of car fires, perhaps the fact that Tesla went so long without having any is the main reason for the Model S making headlines.  Consumers may also hold EVs to a higher safety standard than traditional vehicles, due to the absence of gasoline in EVs.  However, not all are expressing distrust or skepticism around the Tesla fires.  Panasonic, manufacturer of battery cells for the Tesla Model S, has recently come to the aid of the automaker, and the company’s chief financial officer expressed confidence in Tesla and the performance of its batteries.  Panasonic ranked as the fourth best overall lithium ion battery manufacturer in the world in Navigant Research’s Leaderboard Report: Lithium Ion Batteries for Electric Vehicles.

Regardless of the recent media concern over EV safety, one issue remains clear : if your car does go up in flames, having an electric battery under the hood is much safer than a tank of gas, any day of the week.

 

For EVs, It’s Love at First Drive

— October 29, 2013

A recent government-funded study in the United Kingdom found that 80% of consumers would consider swapping their car for an electric vehicle (EV) after test driving EVs for an extended period.  Over the trial, about 350 drivers were given EVs, more than 1.5 million miles were driven, and more than 51,000 recharges were recorded.  The study found that consumers’ attitudes to EVs shifted as they became more accustomed to the functionality of the car.

At the outset of the trial, there was typical concern among drivers about compromising their daily routine to fit in with the range limitations of the EV.  However, the average daily mileage was just 21.4 miles, which is well below the range of battery electric vehicles (BEVs) such as the Nissan LEAF and within the all-electric range of many plug-in hybrid electric vehicles (PHEVs), such as the Chevrolet Volt.

At the end of the trial, 80% of participants said they could picture replacing their traditional petrol engine vehicles with an EV and half of the participants said they planned to do so.  This transformation of attitudes toward EVs suggests that consumers may be more inclined to purchase these vehicles than previously thought.

While the data shows that after an extended test drive EVs are an easy sell, auto manufacturers still have to get customers behind the wheel, as consumer awareness is still lacking.  Despite the challenges (including the higher cost of the vehicles), Navigant Research’s report Electric Vehicle Market Forecasts projects that by 2020, 7% of light duty cars sold worldwide will be electric.  There are currently three main types of EVs: hybrid electric vehicles (HEVs) such as the Toyota Prius, PHEVs like the Chevrolet Volt, and BEVs like the Tesla Model S and Nissan LEAF.   Rising gas prices, declining battery costs, increasingly stringent fuel standards, and steady government incentives will all contribute to the persistent growth of EV markets.

Annual Light Duty Electric Vehicle Sales by Drivetrain, World Markets: 2013-2020

 

(Source:  Navigant Research)

While the average American drives closer to 40 miles per day, the study nevertheless shows that once consumers have the opportunity to drive EVs for extended periods they are much more likely to purchase them.  Another recent study performed by German psychologist Thomas Franke shows that range anxiety significantly decreases after 3 months of driving an EV.

That is especially true for the darling of the BEV market, Tesla Motors.  Between September 2012 and September 2013, Tesla’s stock price rocketed from $29.35 to a high of $193.37.  Additionally, the Tesla Model S was the best-selling car in all of Norway last month, representing 5.1% of total vehicle sales in the country.  When the President of Audi of America calls Tesla Motors “cool,” EVs and their impact on the overall global vehicle market can no longer be ignored.

 

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