Wednesday

Electric Cars For a Reason

The car makers are all abuzz about electric cars. Seems like everyone is trying to build one faster than the others are (or better than the others are planning to do). But the objective of all of them seems to be the existence of the car and not the purpose of the car. That's like saying no one needed pickup trucks or minivans. Every vehicle is designed for a purpose and car makers might do well to keep that in mind. Maybe, just maybe, one electric car design is not the best way to go for all of us.

At least that's the result of a recent study by McKinsey Quarterly that was just released. And it makes sense.

All consumers still want good value for their money, regardless of their "green" viewpoint. Fact is, if there was a car that fit your needs and was cheaper to own and use than a gasoline powered car, most people would buy it. Well, another fact is that most people want a vehicle that fits their needs too.

Detroit (and the rest of the world) would do well to design to fit the need first, since the engineers say that the tough part isn't coming up with an electric car --- it's coming up with one that fits the universal need of everyone. You know, one that can run to the mall or across the state. Adding that huge battery capacity to go across the state is vastly different than just the minor battery capacity needed for the trip to the mall.

And that directly affects cost because the cost of batteries is in direct proportion to their capacity size. "One implication is that companies offering only a plug-in hybrid with, for example, 40 miles of all-electric range may be undercut by manufacturers of much less expensive vehicles with just 10 or 20 miles of electric range and only marginally higher operating costs," reports McKinsey.

The folks at McKinsey have a good point. "By focusing on specific driving missions of consumers, a company can match a vehicle's energy storage requirements to a consumer's particular needs and thus design more economic vehicles." Translated, that means the car you want can cost less if it is designed from the start to fit the needs you have for it.

That makes sense. Figures. McKinsey's economists seem to have figured out what the global carmakers have not.

Burdge Law Office
Helping consumers get their money's worth since 1978.