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Report: Plug-in vehicles slow to spark interest in Indy

January 2, 2013

Plug-in electric vehicles, which are struggling to gain traction nationwide, have even less appeal in central Indiana than they do in most areas of the country, a new study says.

Indianapolis residents have less interest in buying plug-in electric vehicles than those in almost every other major city, according to a report released late last week by researchers at Indiana University and the University of Texas.

The city tied for second-to-last place with San Antonio, Texas, and landed just above the Dallas-Fort Worth metro area in a scoring system ranking drivers’ interest in buying the vehicles.

Nationally, even in the metro area where consumer demand was highest—the San Jose-San Francisco area—interest was still low enough to lead researchers to doubt the plug-in vehicle market will see considerable growth anytime soon.

"While plug-in vehicles provide considerable fuel savings, those weren't enough to offset the perceived disadvantages," the study's authors said in a release.

In a survey of about 2,300 people in 21 major cities, the study found that most automotive consumers cannot justify the high upfront costs for electric cars like the Nissan Leaf or Chevrolet Volt.

“Keep in mind that Indy has not been a priority 'rollout city' for the Leaf or Volt, so part of the explanation is less familiarity,” study co-author John Graham, the dean of IU’s School of Public and Environmental Affairs, wrote in an email to IBJ.

Motorists can get as much as 94 mpg in a Volt if they are willing to keep the car running on electricity without switching to gasoline.

With the Volt priced at about $40,000, more car shoppers are buying fuel-efficient, gas-powered cars such as the Chevy Cruze, which starts at about $17,000.

Also at issue, according to the report, are plug-in cars’ limited driving ranges and the inconvenience of recharging the batteries.

A lack of consumer awareness also hurts interest in Indianapolis, the study said. Consumers are subject to more information about the cars in bigger, media-saturated cities like Chicago, which ranked second in the university survey study, or places with tougher environmental regulations, like California’s.

Indianapolis Mayor Greg Ballard’s office hopes to address that issue by making the vehicles more visible on city streets. Ballard announced Dec. 12 that the city plans to phase out gasoline- and diesel-power vehicles in its fleet by 2025 and replace them with alternative fuel vehicles.

“As charging technology continues to improve, as the range continues to improve, all those things will continue to increase consumer demand,” said Ballard spokesman Marc Lotter. “We’re mostly focused on showing that we can do this as a city government and showing other city governments that it can be done.”

Corporations and groups such as the Energy Systems Network have been investing in plug-in stations and other pieces of the electric vehicle infrastructure to boost the market.

ESN, an initiative of the Central Indiana Corporate Partnership that focuses on the energy and clean-technology sectors, received $6.4 million from the American Recovery and Reinvestment Act for Project Plug-in to upgrade the infrastructure and boost consumer demand.

“Public charging stations do help in reducing range anxiety but they do not help in reducing ‘sticker shock,’” Graham said in his email.

To reduce the sticker shock, the government needs to continue offering incentives to lower company research and development costs, ultimately lowering vehicles prices, he said.

As long as prices stay high, most consumers just won't be interested. And companies involved in the industry will struggle.

Case in point being Indianapolis-based EnerDel Inc.

The company in 2009 received a $118.5 million grant to cover R&D and commercialization of electric- and hybrid-vehicle batteries. But, by 2011, the predicted market had failed to materialize and key customer Think Global went bankrupt.

EnerDel went into its own bankruptcy soon after. It emerged from Chapter 11 earlier this year with help from a Russian investor.

CEO David Roberts previously told IBJ that the company would continue supplying batteries for electric and hybrid cars, but not nearly at the same rate because the company was instead focusing on utilities markets.

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