MONEY The Economy

$3 Gas Makes Driving Cheaper, but Not Flying

A big drop in fuel prices — sparked by an oversupply of oil — means Americans have been enjoying the prices at the pump.

MONEY Autos

The Price of Hybrid and Electric Cars Is Plummeting. Here’s Why

2012 Toyota Prius
Toyota Prius David Dewhurst

Among the trickle-down effects of cheaper gas prices are lower sales totals for alternative-fuel cars—which in turn have forced automakers to slash prices on these vehicles.

USA Today just reported that Ford is cutting the sticker price of the fully battery-powered plug-in Focus Electric by a flat $6,000. That’s on top of a $4,000 price reduction on the same vehicle a year ago. The new sticker price is $29,995 including shipping—but not including federal tax credits of up to $7,500 and state incentives that might effectively knock another $2,500 off the amount buyers pay.

Obviously, Ford wouldn’t be instituting such dramatic price cuts if the Focus Electric was selling well, and part of the reason sales have been poor is that the model doesn’t stand out in an increasingly crowded field of midlevel-priced plug-ins where the Nissan Leaf, the pioneer in the category, remains the indisputable leader. Another reason for underwhelming sales of the Focus Electric—and for many alternative-fuel cars in general, for that matter—is simply that gas prices have been getting cheaper and cheaper.

According to the AAA Fuel Gauge Report, the national average for a gallon of regular was just under $3.10 on Tuesday, compared with $3.35 a year ago and around $3.70 this past spring. Gas prices for the year as a whole are down slightly compared with 2013, and projections call for continued lower prices in 2015. All of which hurts automakers’ efforts to convince buyers that it’s a savvy move to pay a premium over a standard gas-powered vehicle for a hybrid or electric car right now, with the anticipation that they’d more than make up the difference later on in the form of savings on gas.

To help sales, automakers have been trying mightily to make the difference in price between alternative-fuel cars and their traditional car counterparts disappear. Nissan slashed the price of the Leaf in early 2013, effectively bringing the takeaway price of the vehicle under the $20,000 mark. Leaf sales have been strong throughout 2014, up 23% year over year thus far. Ford Focus Electric sales are up in the U.S. as well, with September units sold up 60% compared with the same month last year. Even so, we’re talking about extremely small numbers: 176 Focus Electrics sold last month, versus only 110 for September 2013.

What’s especially noteworthy is that the combination of lower gas prices and increasingly fuel-efficient internal-combustion engine cars appears to be putting the squeeze in particular on hybrid cars like the Toyota Prius. According to Toyota data, 14,277 Priuses were sold in the U.S. last month, compared with 15,890 for September 2013. For the year thus far, Prius sales are down 11.4% compared with the same period a year ago—and mind you, this slump took place a time when Toyota sales overall are up 5.7%. By far the worst-performing Prius has been the plug-in PHV; only 353 sold in September, a decline of 71% versus the same month a year ago (1,152). As for hybrid sales overall, a total of 31,385 units sold in the U.S. in September 2014, a decrease of 35% from the previous month, and a decline of 6.5% from the same month in 2013.

Bear in mind that the hybrid sales slump has occurred while automakers have gotten more aggressive with discounts. As Automotive News lately noted about the struggles of alternative-fuel cars:

Data from KBB.com show that Toyota boosted Prius incentives to $2,300 per vehicle in September from $1,400 a year ago while Ford ramped up C-Max spiffs to $4,900 from $2,650 per vehicle in the same period; neither move helped sales.

So cheaper gas prices benefit drivers not only in terms of the obvious—cheaper gas prices—but also because they’re forcing automakers to slash prices on hybrids and electric cars that boast savings on gas as a primary sales pitch.

MONEY Autos

The Tesla Model S Won’t Be Out of Your Price Range for Long

Tesla Model S
courtesy of Tesla

The ability to buy a used car is hardly hot news. But we're talking about Tesla here, and how the automaker will soon be selling certified pre-owned versions of the prized Model S for a fraction of the sticker price.

Last week, Tesla CEO Elon Musk tweeted that the company would be making a big announcement on October 9. “About time to unveil the D and something else,” Musk said cryptically. No one is sure about what “the D” is, let alone “something else,” though some have speculated that the former could be a faster all-wheel drive version of the Model S, or perhaps even a Model S with self-driving features.

It’s also unclear if some or all of Musk’s “something else” has anything to do with the company’s forthcoming certified pre-owned (CPO) program, word of which was broken on Monday by Automotive News. Virtually every automaker sells CPO vehicles, which are basically just used cars with the warranty extended beyond the norm by the manufacturer, giving the buyer extra peace of mind compared to the purchase of any old jalopy on a used car lot.

CPO programs are hardly sexy. Yet for Tesla, which roared to success last year with strong sales of the Model S, even as the brand has been out of the question for the vast majority of drivers because the cars can cost in the neighborhood of $100,000, this is pretty big news.

Starting in the spring of 2016, many Model S’s will be three years old, a point at which Musk had guaranteed customers he would buy vehicles back at or near 50% of their original price, should the customer be interested. The expectation is that many early Model S buyers will take Tesla up on its trade-in option (presumably to buy a new Tesla, the automaker hopes). Tesla will service these used vehicles and then resell them at prices probably in the range of $35,000 to $50,000—pricey by used-car standards, but a deal compared to the sticker price of a new Model S, which starts at around $70K.

Anyone buying a CPO Tesla also benefits because it’s being sold directly by the automaker. Though the particulars of the program remain unknown, Tesla will presumably make the purchase less worrisome by including certain warranties. One would hope that includes a guarantee on the strength of the battery, which is essential for an electric car to remain a practical vehicle that can be driven long distances without needing a recharge.

What’s interesting is that by the time Tesla is ready to start selling three-year-old Model S’s for maybe $40,000, it will probably simultaneously be gearing up to sell a brand new model expected to be priced at around $40,000. This past summer, Musk said that the next generation of Teslas, due to be available for sale by around 2017, will sell for around half the price of a current Model S—and could start for as little as $35,000.

MONEY Autos

Why Hybrid and Electric Cars Have Lost Their Spark

2015 Nissan LEAF
To entice buyers to purchase a Leaf, Nissan launched a free charging promotion this past spring, promising new owners access to public charging stations at no cost for two years. Nissan—Wieck

The Nissan Leaf, Chevy Volt, Toyota Prius, BMW i3, and other electrified cars were projected to take over an ever-increasing chunk of the auto market. Only sales have gone flat in 2014. What happened?

At first glance, the electric car market appears to be pretty darn electrified. Tesla just chose Nevada as the site for its $5 billion “gigafactory” to produce batteries needed for EVs, and Tesla shares hit an all-time high this week after the company was praised by analysts. What’s more, Nissan reported that August was the best ever month for sales of its plug-in Leaf, with 3,186 units sold. Sales of BMW’s new plug-in, the i3 were also strong in August—1,025 sold, which just about matches the total of the previous three months combined.

At the same time, however, the overall electrified car market appears to be flat, even in a bit of a slump. Auto sales are booming in general through 2014, and last month reached the highest sales pace since before the Great Recession. Yet hybrids and fully electrified plug-ins haven’t kept pace with the rest of the field. “The whole automobile market has grown,” Edmunds.com analyst Jessica Caldwell explained to the Los Angeles Times. “We’re not seeing electric vehicles as part of that growth.”

According to Edmunds data, through August 2014 hybrids and electric vehicles captured 3.6% of all auto sales this year. For the same period a year ago, hybrid and EV sales represented 3.7% of the overall market. That wouldn’t seem like a big deal except for the fact that for years analysts have been forecasting that hybrid and EV sales would rise steadily, more or less indefinitely—reaching 7% of global auto sales by around 2020.

How can all of this be explained? First off, the increase in sales of the Nissan Leaf is mostly an anomaly. Nissan launched a free charging promotion this past spring, promising new buyers access to public charging stations at no cost for two years as an incentive for the purchase of a Leaf. Local subsidies in states such as Georgia, which provides a $4,000 tax credit for EV purchases and boasts inexpensive electricity to boot, have helped juice sales. (Federal tax credits for plug-in purchases amounting to up to $7,500 off are still around as well.)

Even in Atlanta, however, which has become the #2 urban market for electric cars (after San Francisco), EVs account for only 2.15% of new car registrations. Nationally, EVs constitute only 0.38% of new car registrations. Hybrid vehicles, which are more practical because they run on gas as well as battery power, have regularly sold in far higher numbers than pure electric-powered plug-ins. And sales of many hybrids and non-Leaf EVs aren’t faring well in 2014. MarketWatch reported that through August, sales of the Chevy Volt, Toyota’s plug-in and hybrid Prius, and Honda’s lineup of hybrids and plug-ins were all down at least 10% compared to the same period in 2013. Tesla doesn’t provide sales data, but according to estimates from InsideEVs.com, sales of the Model S totaled approximately 500 and 600 in July and August, respectively, after hitting 1,000 or more monthly from February to June.

What’s been holding sales of hybrid and electric cars back? Reasonably flat, reasonably inexpensive gas prices have certainly played a role. A survey from a couple of years ago indicated that the majority of Americans wouldn’t alter their lifestyles until gas hit $5 per gallon. Not only are we still far off the $5 mark, but prices at the pump have actually been on the decline, recently dipping to the lowest Labor Day gas prices in years.

Edmunds.com’s Caldwell also told MarketWatch that sales of EVs and hybrids may be down because they’re no longer new and novel in the marketplace, and the fascination with owning one is quickly diminishing. “Stable gas prices have a lot to do with it, but there’s also a possibility that the prestige of owning an electric vehicle or hybrid has died down,” she said. “This year may not be able to top last year, which is kind of sad given how well the overall market is performing.”

With the novelty of owning an electrified vehicle disappearing, consumers are left considering the issue as a purer matter of dollars and cents. Hybrids and EVs generally have higher sticker prices than their gas-powered counterparts, so the hurdle electrified cars must clear is convincing drivers that they’re worth the extra money. Lower gas prices obviously mean lower potential cost savings from owning a car that runs on electricity, so the state of gas prices is a strike against EV sales. Traditional gas-powered vehicles have made great strides increasing their fuel economy, which again hurts the argument for opting for an electric-powered car for the purpose of saving money.

Even the improvement in the economy seems to be hurting sales of EVs and hybrids. As the Associated Press noted, consumer demand for SUVs and crossovers has been particularly strong, at least partly because buyers have felt comfortable enough financially to afford larger, pricier vehicles. (The rise in subprime car loans is surely a factor too.) Because so many drivers are interested in SUVs, automakers and car dealerships have felt forced to offer larger-than-usual discounts and incentives on compact and midsize vehicles to convince customers to bite.

And when a gas-powered compact with excellent mileage and no need to ever worry about running out of battery power or finding a recharging station is available at an especially cheap walk-away price, that’s one more reason that many consumer are finding that the math isn’t adding up for the purchase of an electric car.

TIME energy

Electric Cars Will Change the Way You Power Your Home

An electric charging cable is seen connected to the updated Nissan Leaf vehicle during a news conference in Japan, Tokyo, on Tuesday, Nov. 20, 2012.
An electric charging cable is seen connected to the updated Nissan Leaf vehicle during a news conference in Japan, Tokyo, on Tuesday, Nov. 20, 2012. Kiyoshi Ota—Bloomberg/Getty Images

How the homes of the future will generate and store their own electricity, turning your house into a mini-power plant

Electric vehicles are our fastest-growing alternative to oil-derived gasoline. Solar panels are our fastest-growing alternative to coal-powered electricity. They’re both getting less expensive and more effective, driving our clean-energy revolution. And there’s new evidence that these two great tastes can taste particularly great together, transforming how we consume and produce power in ways that will accelerate that green revolution.

The evidence comes from Opower, a firm that uses software and behavioral science to help utilities promote energy conservation — and has amassed the world’s largest storehouse of household energy data along the way. Opower studied the power-consumption habits of about 2,000 plug-in electric-vehicle owners enrolled in “time-of-use” pricing programs. That means they got discounted electricity rates from midnight to 7 a.m., when demand is typically low, but paid a surcharge during peak daytime hours, when demand tends to spike.

Grid managers have to balance supply and demand every second, so big gaps between peak and off-peak demand can create big inefficiencies by forcing them to turn power plants on and off to adjust supply. In theory, the combination of electric vehicles (which can be charged anytime) and time-of-use pricing (which encourages charging after midnight) could help reduce those gaps. It could also help prevent electric vehicles (which alleviate the problem of carbon emissions) from exacerbating the problem of overloaded daytime grids. And that’s basically what the data showed — with a twist.

Opower found that EV owners did respond to the incentives to charge during off-peak hours, using three times as much power as the typical household between midnight and 7 a.m. It’s notoriously tough to get consumers to adjust their behavior, even when it’s in their financial interest, so that’s good news. At first glance, the data from the rest of the day looks like bad news: from 7 a.m. until midnight, EV owners still used 21% more power than the typical household. But this was mainly because they’re richer than the typical household; their houses were bigger and more likely to have a swimming pool. They clearly did the bulk of their vehicle charging after midnight when power was cheap.

The most striking data was from EV owners who also had solar panels. From 7 a.m. to midnight, they used about one-fourth as much power from the grid as the typical household, because they were getting power from their rooftops and often selling power back to the grid. In other words, they took very little from the grid when demand was high — at times even helping to increase supply — and took much more from the grid when demand was low. They helped smooth out demand.

That’s very good news, not only because smoothing out demand is a kind of holy grail for utilities, but because EV owners were 6.6 times more likely to have solar panels than the typical household. Nancy Pfund, a venture capitalist who invested early in Tesla Motors, the hottest EV firm, and Solar City, the leading solar installer, calls EVs “the gateway drug to solar.” Once you stop using hydrocarbons to fuel your car, she says, you want to stop using hydrocarbons, period. “Together, they can be a huge tool for managing our energy load,” Pfund says. “And they’re both taking off.”

Before 2009, when President Obama poured $90 billion into clean energy through his stimulus bill, the U.S. had no EV or solar industry to speak of. It now has nearly 250,000 EVs and nearly 500,000 solar rooftops, and both industries are still growing exponentially; Tesla and Solar City, both Elon Musk ventures, have both enjoyed soaring stock prices since going public. EV battery prices are not yet truly competitive with gasoline, although they’ve dropped 50% in five years, but retail solar prices, which have plunged 80%, are now competitive with fossil fuels in half the country. And the more they’re deployed, the cheaper they’ll get.

EVs are still less than 1% of the U.S. auto fleet, and solar still provides less than 1% of U.S. electricity. In terms of reducing emissions, they are still less significant than hybrid vehicles or wind power or energy-efficient appliances. But they are what the Silicon Valley types like to call “disruptive.” When you put a solar panel on your roof, your home becomes a mini-power plant. When you buy an electric vehicle, you suddenly control an automobile-shaped energy-storage device. It won’t be long before homeowners with both can be mini-utilities, buying power from the grid when it’s cheap and selling power to the grid when it’s expensive. Willett Kempton, a University of Delaware professor, has created electric vehicles that communicate and interact with the grid in real time; they earn about $150 per car per month by storing excess power when the grid gets temporarily overloaded.

That would make the economics of EVs more attractive, accelerating the route to mass adoption. “Net metering” will be similarly important for solar, allowing homeowners to sell power to the grid at attractive prices; as the Opower study demonstrated, time-of-use pricing can also help shape electricity demand. All of this will help create a more flexible, less centralized energy system, incorporating more renewable power without sacrificing reliability when the sun isn’t shining or the wind isn’t blowing, adapting instantaneously to changes in demand and supply with the help of modern information technology and Opower-style Big Data. Our cars (as well as other smart appliances) will optimize their power needs with our utilities, and we can intervene at any time over our iPhones.

You could imagine a future where solar panels and EVs (perhaps with additional backup storage, like the wall-mounted batteries Solar City and Tesla recently launched) help Americans declare independence from the grid, the way mobile phones have set us free from landlines. More likely, though, the clean-energy revolution will just change our relationship to the grid. Our utilities will be as dependent on us as we are dependent on them. And we’ll have power over our power.

TIME

Tesla Opens Its Patents to Everyone

Now any company can use Tesla's technology "in good faith"

Tesla wants to share its secret sauce with everyone.

Telsa CEO Elon Musk said in a blog post Thursday the automaker will not initiate patent lawsuits against anyone using the company’s technology “in good faith.”

Musk said in the post that while Tesla never wanted patents, he originally felt they were necessary to protect Tesla’s technology from misuse by rival car companies. But he’s now come around, and says this theory is wrong.

“The unfortunate reality is the opposite: electric car programs (or programs for any vehicle that doesn’t burn hydrocarbons) at the major manufacturers are small to non-existent, constituting an average of far less than 1% of their total vehicle sales,” he said.

Musk framed the new open source policy as an attempt to speed up efforts to address climate change.

“Given that annual new vehicle production is approaching 100 million per year and the global fleet is approximately 2 billion cars, it is impossible for Tesla to build electric cars fast enough to address the carbon crisis,” Musk said.

He believes that Tesla allowing others to use its technology will increase innovation, and that “the world would all benefit from a common, rapidly-evolving technology platform.” This could also benefit Tesla itself if other companies build charging stations or other products that support Tesla vehicles.

Tesla’s patent policy reversal comes as a surprise, as Tesla has been developing its $5 billion battery factory in recent months and many have thought the company would make much of its money on its battery technology intellectual property.

TIME Autos

BMW’s Latest Is a Drop-Dead Stunner With a Huge Surprise

BMW i8
BMW i8 UWE FISCHER/BMW

fortunelogo-blue
This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

BMW’s new $135,000 i8 sports car, which will begin appearing on the streets of Beverly Hills and Greenwich in a few weeks, defies easy categorization. It is fast. It is light. It is exceptionally fuel-efficient and eye-catching.

Think of i8 as a Porsche Carrera behaving from time to time like a Toyota Prius or Nissan Leaf.

As stunning and original as the i8 is from an automotive engineering standpoint, it represents an important philosophical statement for the German automaker, known until now for powerful, sporty machines more than environmental righteousness. Tougher regulations regarding carbon emissions threaten BMW and other makers of high-performing models unless they can develop and master advanced energy-efficient technologies, such as those embodied in i8.

One such breakthrough technology exemplified in the i8, as well as for BMW’s smaller, less expensive i3 city car, is extensive use of carbon fiber instead of steel. The cockpits of both cars are fabricated from the material, which has never before been used for the mass manufacture of a high-volume vehicle due to prohibitive cost and complication.

“What makes carbon fiber feasible for these new models is the way in which we have learned to manufacture the substance so that the process can be more highly automated, quicker and less wasteful,” said Andreas Wuellner, managing director of SGL Automotive Carbon Fibers LLC, in Moses Lake, Washington.

MORE: Tesla’s big gamble in China

SGL, a joint venture partner with BMW, on Friday announced a new $200 million investment to triple the capacity of its Moses Lake factory, making it the largest such installation in the world. The location of the plant was chosen, in part, because the electricity could be furnished by hydroelectric generators, which produce little or no carbon dioxide compared to fossil-fuel plants

The gas-electric plug-in hybrid i8, weighing 3,274 pounds (about 1,000 pounds less than an aluminum-bodied Tesla Model S electric), can accelerate to 60 miles per hour from 0 in about 4.4 seconds. Though the U.S. federal fuel efficiency rating hasn’t yet been released, BMW engineers calculate it will be about 90 miles per gallon.

i8 can be driven in five different modes, each of which optimizes some combination of range, power, fuel efficiency or battery charge. Under ideal conditions, the car can be driven as far as 375 miles before it needs a fill-up or a charge. But it can also be driven up to 23 miles in battery-only mode.

As if the i8’s lowslung body wasn’t sexy enough, its gullwing doors deliver a heart-fluttering caress. (BMW calls them “scissor” doors to avoid the gullwing designation first made famous by archrival Mercedes-Benz.)

BMW’s $41,400 i3 already appears to be a hit. The automaker said on April that it was increasing the rate of production to 100 cars per day, in the face of strong initial demand. Both models are built at BMW’s factory in Leipzig, Germany, which is powered in part by wind turbines.

BMW has dabbled with carbon fiber previously: its extensive use in i3 and i8, like Ford Motor Company’s decision to manufacture its next-generation F Series pickup from aluminum, are signs that the environmental concerns are growing daily as a critical factor in vehicle design.

TIME Autos

3 Next-Gen Plug-In Cars That Could be Game Changers

Japan Nissan
Itsuo Inouye—AP

The biggest complaints about electric cars are that they’re too expensive or have limited driving range, or that don’t have enough space for hauling gear or a family.

In one way or another, all of these issues are being addressed in forthcoming new versions of the Nissan Leaf and Chevy Volt, and a new plug-in hybrid Chrysler Town & Country—yep, a minivan—planned to hit the marketplace in the near future.

The Next Nissan Leaf
The second version of the Nissan Leaf, introduced in early 2013, addressed the sticking point for a lot of drivers who weren’t yet convinced to bite on an EV: By dropping the Leaf’s base price by over $6,000, Nissan was able to make a purely electric-powered car affordable, starting at under $19,000 once incentives were factored in.

The third-generation Leaf, due to hit the marketplace sometime around 2017, as reported by Automotive News, is expected to have a dramatically improved battery and therefore, a dramatically improved driving range. The goal is for the next the Leaf to have a driving range of 186 miles before needing a charge, up from 73 miles originally and 84 miles on a full charge for the 2014 version. If and when that happens, Nissan will be able to make a much stronger argument that the Leaf is truly affordable and practical.

The Next Chevrolet Volt
Car and Driver offers a sneak peak of the new plug-in hybrid Volt, which is expected on the market for the 2016 model year—and which gives drivers improvements in electric driving range and a cheaper base price to boot. Not long ago, General Motors announced that the price of the next Volt would start at around $30,000 before incentives, around $10,000 less than the original model. The driving range when powered strictly by battery, meanwhile, is expected to jump from 38 miles today to 50 to 60 miles in the forthcoming Volt—though likely only for a 2016 Volt with an optional more powerful (and more expensive) battery.

The Plug-in Chrysler Town & Country
Bigger, heavier cars need more power to operate, which makes the prospect of a battery-powered large vehicle problematic. The lithium batteries now in use are exceptionally heavy, and bigger vehicles would require bigger, heavier batteries—which in turn would weigh the cars down further. At some point, the math doesn’t add up, with prices for larger hybrids and EVs getting so high as to become impractical. That’s why the vast majority of EVs (and hybrids for that matter) are on the small size, and why they employ as many technologies and strategies as possible to keep their weight down.

Nonetheless, Fiat Chrysler just announced plans for a plug-in hybrid minivan, a first-of-its-kind Town & Country model that’s expected to get an astounding 75 mpg (or rather, the equivalent with electric and gas power combined), available for purchase around 2016. Chrysler anticipates its lineup will include a full-size plug-in hybrid crossover SUV by that time as well.

What’s curious is that Chrysler’s announcement comes at a time that, as USA Today noted, many automakers are pulling the plug on fuel-efficient hybrid versions of big SUVs such as the Cadillac Escalade and Chevy Tahoe due to poor sales and lack of interest from buyers. The most common reason cited for the failure of such models is that they were just too expensive to justify the bonus of getting a few more miles to the gallon.

The takeaway for Chrysler is that the next-generation large hybrids it’s rolling out must be vastly more fuel efficient than their traditionally-powered counterparts (that looks to be the case, with the 75 mpge figure), and they must avoid being astronomically expensive (we’ll have to wait and see).

TIME Companies

Tesla Stock Takes a Tumble After Lower Profits

The company expects to deliver more than 10,000 more vehicles this year, but high costs rattled investors.

Tesla stock fell approximately 9% Thursday morning before partially recovering a day after the company announced a big drop in profits.

The maker of high-end electric cars said Wednesday that revenue rose in the first quarter but costs tapered profits. Tesla earned $17 million last quarter, down from $45.9 million in the previous quarter.

Billionaire CEO Elon Musk said operating expenses, including research and development and sales and administration costs, will continue to grow in the next quarter. That growth will be partially fueled by development for Tesla’s new crossover-utility vehicle Model X, which is expected to go on sale next year, CNN Money reports. The company’s expansion into China and construction of a new battery factory also weighed down on profits.

The company aims to deliver 35,000 vehicles this year, up 55% from last year.

At 10:35 a.m. ET Thursday, Tesla stock was down $11.60, or 5.8%, to $189.75.

TIME

Better Fuel Efficiency Is Hurting the Most Efficient Cars of All

A Toyota Prius hybrid car.
Toyota Motors / AFP / Getty Images

Why aren’t sales higher for electric vehicles and hybrid plug-ins? A big reason has to do with the technology that EVs are supposed to replace, the internal combustion engine.

Last year, Nissan Leaf sales more than doubled the total from 2012. Sales for the entire plug-in category, which includes pure battery-powered vehicles like the Leaf and gas-electric hybrids such as the Chevy Volt, nearly doubled as well last year.

Even so, automakers have recently launched major incentives and price-cutting measures in order to win over potential buyers. And the reason they’re doing so is that sales, while on the rise, haven’t been as strong as many had hoped.

“EVs have been a disappointment, compared to what we expected,” Morgan Stanley analyst Ravi Shanker flatly said, according to Automotive News. “Their cost hasn’t come down enough. Batteries haven’t gotten better. And gas prices haven’t gone up like everyone expected. And at the same time, the automakers have done a great job of making the internal combustion engine better.”

Yes, some of the explanation for why electric vehicles aren’t selling better is directed squarely at plug-ins themselves. As skeptics have pointed out since EVs hit the marketplace, the limited driving range, high initial price, and/or slow and inconvenient charging procedure of plug-in cars are deal breakers for many drivers.

But as Shanker noted, underwhelming plug-in sales can also be partially explained by the other parts of the equation affecting consumer car-buying decisions. When gas prices are high, and the assumption is that they’ll keep on increasing, opting for an electrified car makes more and more sense as a long-term money saver. Likewise, when comparing the costs of commuting and running routine errands in a battery-powered car versus an old-fashioned gas guzzling SUV or sedan, the EV can seem like an especially savvy move for the household budget.

What’s hurting plug-in sales, however, is that gas prices aren’t sky high, and few experts today are forecasting the impending arrival of $5 per gallon like they were two years ago. The other factor is that gas guzzlers are disappearing, with new studies indicating that half of the new cars sold this year get 23 mpg or better, and new cars now averaging over 25 mpg thanks to improved efficiency in the internal combustion engine, as well as automakers (and buyers) generally embracing lighter, smaller cars.

Amazingly, car dealerships and sales staffers themselves often don’t seem sold on the wisdom of going electric. Secret shoppers from Consumer Reports just concluded a broad investigation of car dealerships and plug-ins, and during the course of visiting 85 dealerships, they found out that few dealership lots have decent selections of plug-ins, and that many sales employees aren’t knowledgeable about EV sales incentives and technology. Perhaps unsurprisingly, sales staffers who weren’t fully up to speed about plug-ins were particularly likely to try to steer customers away from EVs and toward traditional cars powered solely by internal combustion engines.

“Many seemed not to have a good understanding of electric-car tax breaks and other incentives or of charging needs and costs,” the CR report stated, referring to dealership sales staffers encountered by secret shoppers. “Many also didn’t seem to recognize that for people who intend to go with an electric car, the reasons for leasing are broader than for ordinary cars, including that you don’t have to wait until tax time to receive a generous tax incentive.”

If professional car sales employees don’t understand how all of this works, and can’t (or won’t) lay out a simple, sensible case for switching to a plug-in car, and can’t (or won’t) explain the smartest way to do so, imagine how the average consumer feels.

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