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Subaru CEO says U.S. consumers don’t want electric vehicles

Car companies have to build electric vehicles to meet higher fuel economy standards

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Photo (c) Ziga Plahutar - Getty Images
Electric cars were once a novelty. Now they’re the future, with nearly every automaker racing to get new electric vehicles on the market.

But the change in emphasis has more to do with government mandates than consumer preferences. In fact, Subaru CEO Tomomi Nakamura recently shocked a gathering of automotive journalists when he declared that American consumers aren’t very interested in buying an electric vehicle, with the exception of a Tesla.

Nakamura said Subaru has already discovered how difficult it is to market an electric car to American consumers. In 2018, it sold an average of just 300 cars a month when it introduced a plug-in hybrid of the Subaru Crosstrek.

“We think the U.S. market is really difficult,” he said.

Government pressure

If consumer demand isn’t driving automakers to make electric vehicles a priority, then what is? Most likely, it’s rising government fuel economy standards. Manufacturers can still sell gas-guzzlers, but their total fleet of vehicles must meet increasingly ambitious miles-per-gallon targets. 

Since a plug-in electric vehicle uses no gasoline, the more the company can sell, the higher its MPG average goes.

The Edison Electric Institute reports consumers are embracing electric vehicles in rapidly growing numbers. It has published a chart showing the number of electric cars on the road increased from just a few thousand vehicles in 2011 to nearly 1.2 million in April 2019.

While that’s impressive, total light-vehicle sales in the U.S. last year totaled just over 17 million vehicles, and Tesla, by far the largest seller of electric vehicles, sold an estimated 179,000 units.

Headwinds

Electric vehicle sales currently face two significant headwinds to widespread consumer acceptance -- range and cost.

In measuring the average range of an electric vehicle, Kelley Blue Books ranks the Tesla Model S as having the longest range on a charge -- 370 miles. The average is around 250 miles. That’s fine for in-town commuting but problematic if you’re driving halfway across the country.

Subaru executives cite cost as perhaps a bigger impediment to consumer acceptance. The average transaction price of new cars in the U.S. last year was nearly $39,000. Electric vehicles tend to cost much more.

But while electric vehicles cost more, their sticker price is going down while gas-powered vehicles are getting more expensive. Data analyzed by Cox Automotive shows that electric vehicle prices fell from $64,300 to $55,600 earlier this year, a 13.4 percent decline over the previous year.

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