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Can Weird Twizy Succeed As Over-Ambitious Electric Cars Stall?

RenaultTwizys


Trying To Make Electric Cars Match Traditional Ones Doomed
Twizy Has Limited Ambitions, But Keen Price

“Twizy has a huge future with our congested cities and small streets. But it won’t happen quickly because revolutionary concepts take time”

It might have a silly name and look ridiculous, but the Renault Twizy could be the first electric vehicle to sell on its merits and without taxpayer inducements.

Sales of battery-only electric vehicles like the Nissan Leaf barely register on both sides of the Atlantic as car buyers blanche at the prices – around twice as much as a similar-sized regular powered car – and the iffy and unimpressive range. Manufacturers trying to build electric cars pretending to be normal cars which just happen to have batteries, are going nowhere, at least until the technology halves the price and doubles the range.

If manufacturers had been a little less ambitious and tried to create a unique, affordable, little electric utility vehicle which could get you down to the shops or take the kids to school, but not much more  – think of the better golf cart  – might buyers embrace that with some enthusiasm?

The Renault Twizy might be that vehicle, and it’s on sale now in Europe.

The Franco-Japanese Renault-Nissan alliance has allocated about $5.5 billion for the development of battery-only cars. Renault has already launched the Kangoo Van and later this year will add the Fluence and Zoe sedans as well as the Twizy. The alliance reckons battery-only vehicles will account for 10 per cent of global sales by 2020, at least twice as much as many other automotive manufacturers. Some forecasts settle at around five per cent market share, but the majority range from two per cent to five per cent. Later this year Ford, Honda and Fiat will launch conventional looking electric vehicles. Next year BMW will parade its little carbon fiber i3 Mega City car, which looks less like a regular car, but which, being a BMW, will not be cheap.

Range anxiety
So far, electric car buyers have been stand-offish to say the least. Western Europeans only bought 11,563 electric cars in 2011 for a market share of 0.09 per cent, according to Peter Schmidt, editor of European newsletter Automotive Industry Data (AID). In January, market share inched up to 0.13 per cent. Schmidt said in the U.S. 1,660 electric cars were sold in February, and just over 1,000 weren’t even electric-only cars, because they were Chevrolet Volt extended range vehicles. That means the vehicle has a gasoline engine as well as an electric motor, which provides electricity to the battery when it runs dry, thus avoiding range anxiety. Schmidt doesn’t expect battery-only car sales to takeoff in 2012, although he says eventually this will happen.

Across Europe, each sale of an electric vehicle often attracts a government handout of roughly $6,600, similar to the U.S. government subsidy of $7,500. This has clearly not sparked demand in Europe, and news earlier this month that Peugeot and Citroen both cut the prices of their Mitsubishi-provided electric cars by about $11,000 just underlined how grotesquely overpriced the tiny vehicles were initially. Both models now cost almost $34,000 after the government grant, still an eye-watering price for a city car.

Rent battery
OK, so the Twizy doesn’t look much. It is really a four-wheeled, two-seat, semi-enclosed motorcycle. But as a sharp-handling and traffic friendly commuter vehicle it may have great appeal, with a range of up to 60 miles, a 50 mph top speed and a price of around $11,000 with no subsidy. A full charge takes 3-1/2 hours. The price sounds a bit less affordable when you factor in the $60 a month battery rental charge, but at least that means you can dump it back on to Renault when and if it dies. The Twizy has an automatic gearbox, disc brakes front and rear and airbags for the driver. My favourite option is “Doors – $868”.

The Twizy has no pretensions about being a proper car. It will do a limited job and although it receives no government subsidy, may well attract buyers on its merits.

Jacques de Selliers, managing director of Brussels-based lobbying organisation Going-Electric, thinks it will be a hit.

“The Twizy should have a huge future in the European market with our congested cities and small streets. But it won’t happen quickly because revolutionary concepts take time to impose themselves in the market,” de Selliers said.

De Selliers said that he didn’t accept that recent sales figures showed a lack of interest in electric cars, rather that lack of availability had constricted sales.

He pointed out that other less known manufacturers including Lumeneo of France with its Smera were also in the specialist urban transport market.

Futuristic? Odd?
At the Frankfurt Car Show last year, mainstream manufacturers like VW’s Audi and GM Europe’s Opel-Vauxhall also showed off electric motorbike-like enclosed commuter concept vehicles that looked futuristic or odd, depending on your point of view.

De Selliers said this urban vehicle market is going to be very important.

“Commuting accounts for between 80 and 90 per cent of mileage driven worldwide. I’m convinced urban vehicles will find great success, but I doubt if it will come overnight,” de Selliers said.

Dr Peter Wells of the Centre of Automotive Industry Research at the Cardiff Business School agreed that trying to produce an electric car that was the equivalent of a traditionally powered one with its heavy steel body was asking a lot. He said BMW’s i3 city car was designed from the ground up to be light-weight, with the use of carbon fiber, and a factory that was carbon neutral. He thought Renault’s decision to make the cheap and less ambitious Twizy had merit.

Glide path
Roger Thornton, Global Product Group Director for Hybrid and Electric Vehicles for automotive consultancy Ricardo, didn’t think there was much of a future in Twizy-like vehicles, and electric cars would gradually make an impact, but it could take up to 10 years.

“Electric cars are on a glide path to becoming more acceptable but they are not there yet on cost and range, and it will be some time before that happens, it will take a decade,” Thornton said.

“I don’t see the Twizy being a breakthrough car. Manufacturers need to make real cars for real people. They don’t want funny little cars, they buy real cars with four doors and a boot (trunk) and a real car for kids, dogs and shopping. They don’t want a few two-seater Twizys. Manufacturers want cars which sell in millions like the (VW) Golfs and Polos, they want volume cars. Making a few specialist cars doesn’t solve the (emissions) problem,” Thornton said.

Thornton said range extenders (like the Volt) are a more viable technology, not electric-only.

“Electric cars are too expensive, yes. The price, will it come down, yes. Are specialist low cost cars (like the Twizy) the way forward? I don’t think so,” Thornton said.

Gartner Group analyst Thilo Koslowski believes electric vehicles are not yet ready for prime time, while golf-cart like vehicles are too dull.

“Electric cars are a generation or two too early. They don’t get the range, prices are too high, all factors that average consumers may find too much of an obstacle. These kind of vehicles have a marketing challenge more than anything else,” Koslowski said by telephone from San Jose, California.

Wow factor required
“Manufacturers need to induce the “wow” factor to persuade consumers it’s the right thing to do. Tesla (electric sports car maker from California) has got the emotional wowing side to persuade buyers that it’s the right thing to do. For the rich that’s probably enough. For regular vehicles, the price has to be right too,” Koslowski said.

Golf-cart like vehicles are not exciting enough.

“For higher sales (to the young) you need smaller electric vehicles. Golf-cart like vehicles are too much away from the traditional automobile even for younger ones. You still need the wow factor for the iPod generation, and a car that doesn’t remind you of a golf-cart but looks cool. The Audi Urban concept and the Opel concept are much more in line with what I’m talking about for those on smaller budgets,” Koslowski said.

Going-Electric’s de Selliers says the success of the Twizy or the Audi and Opel concepts, depends on their perception in the market, more than price.

Status
“Most people buy cars that are far too expensive (and exceed requirements) and reflect their need for status. So the key factor for the Twizy will be, will it give me social status or enhance my reputation as someone revolutionary and ahead of their time, or be rejected because its seen as some silly little small car,” de Selliers said.


Neil Winton – April 2, 2012

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