The Changing American Motorist
Posted October 21, 2009 at 8:08 am 
Filed in: Are American motorists ready for something new? Some signs suggest yes.
American drivers used to be loyal to a brand – in 1986, nearly 80% of new car owners bought the brand their household previously owned. Families would retain allegiance to Ford or GM over generations, never considering another dealer. In 2009, only 20% of car buyers were repeat brand owners.
Consumers now comparison shop based on the economics, rather than brand mystique. They are looking for fuel economy, safety, and luxury extras. According to Jeremy Anwyl, president of the car-research Web site Edmunds.com, “Today, people are very focused on value…Hyundai took a unique position to address that.”
Meanwhile, hybrid electric and fully electric vehicles are dominating the Tokyo Motor Show, which started today. Nissan is banking on its solely electric Leaf, 
while Toyota has continued to rely on Hybrids. Honda’s plug-in EV-N concept car, with a lithium-ion battery, is based on the 1960s N360 hatchback. That should be a clue that many of these cars don’t look like the cars to which America has become accustomed.
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↑ The Honda EV-N
↓ The Nissan Leaf
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Then there is the Reva, produced by the eponymous Bangalore-based electric car 
company that is now selling cars in twenty countries outside its home market of India. The 2009 Reva L-ion is more powerful, has a longer range, and even features a solar panel on the roof. Reva recently announced plans to open a new manufacturing facility in New York State, with hopes of selling the Reva here in the United States.
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If you thought that looked funny, check out the GM-Reva joint venture vehicle, 
the Chevy Spark, initially for sale only in India:
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And then there’s the Chevy Volt, which though it has a long way to go in order to 
become cost-competitive with conventional ICE vehicles, is scheduled to go on sale right here in the U.S. next year:
The point here is not just about looks; these cars represent a fundamental overhaul of our existing light duty transport system. They require new infrastructure, both in your garage and in public areas, for charging. They also require an overhaul of the way Americans go about buying cars. Today, dealers do everything they can to minimize the up-front cost of a vehicle, amortizing the payment over multiple years. Plus, while the engine is relatively inexpensive (it has benefited from eighty years of tweaking), the operating cost is around seven times as high as an electric vehicle, depending on the price of gas. For example, a Chevy Silverado starts at MSRP $19,375, but after all the “cash bonuses” you end up at $15,870. Your down payment is as little as $1,158, and then you pay around $233 a month thereafter. At a “real” mileage rate of 17 mpg, driving only thirty miles a day at $3.00 per gallon leaves you spending an additional $159 a month. Americans prefer to pay less now, but pay more over time.
As the recession and the dollar’s plummet force Americans to reconsider their financial strategies, and as carbon constraints and peak oil come to the fore of public debate (real or imaginary though they may be), perhaps drivers will change their cost-benefit analysis. As electric vehicles come on the market, and battery costs drop, drivers with low discount rates will be able to exchange ultimately higher costs over time for a lower up-front cost of an electric vehicle. Electric vehicle deployment will test the extent to which American motorists are changing their approach to buying cars.
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