Commentary: Tesla’s carrot sells more electric cars than California’s stickCommentary: Tesla’s carrot sells more electric cars than California’s stick

If you build them, they will come—as long as what you build is attractive.
That’s the message of Tesla’s dominant sales reports and awards this month. Buyers seem to be clamoring for the Model 3.
There was a time when electric cars seemed unattractive to a lot of drivers. Even with reports of global warming multiplying in the 1990s, gas was cheap, SUVs were on the rise, and electric cars had batteries the size of pickup beds, took overnight to recharge, and could go about 40 miles.
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In light of this, the California Air Resources Board, tasked with keeping California cities’ air quality within federally acceptable levels, announced in 1990 that 2 percent of all cars sold by large automakers in the state must be zero-emissions electric or fuel-cell cars by 1998. The automakers didn’t meet that deadline and the state modified the regulation, going back to the drawing board several times.
By the time the first modern electric car, the Nissan Leaf, went on sale in late 2010 as a 2011 model, Green Car Reports was in full swing covering developments toward making the U.S. auto fleet cleaner and more efficient. We dubbed cars developed to meet the California mandate “compliance cars,” as opposed to more serious efforts by a few automakers, including Nissan, to sell more electric cars than the mandate required, and to sell them even outside California.
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At the time, the landscape was awash in startup automakers hoping to capitalize on demand for electric cars to meet the mandate. Tesla was one of a dozen or more that had viable-looking new models on the drawing boards after it produced a couple of thousand Roadsters. It was not clear then why one startup might be more successful at building a functioning manufacturing and sales operation than others. Virtually all were deep in debt, dependent on government financing, and had never built a car before. 
Many observers and electric car advocates wondered whether the strategy of luxury startup automakers such as Tesla and Fisker—to follow the established technology business model of introducing technology breakthroughs first in expensive luxury products where costs can be amortized and then let it trickle down to more affordable products—would be more successful than the approach favored by California and the federal government to make electric cars affordable at the outset.
What was clear was that what was needed were products that would ignite passion in the hearts of buyers, not just appeal to cold logic, budget spreadsheets, and regulators. Few people aspired to buy such cars.

National Plug-In Day, Oct 2011, Davis, California – photo by George Parrott
That’s exactly what Tesla proved in 2018: It sold more Model 3s than any other luxury car and more than all but five mainstream cars in the U.S. (not counting SUVs and pickups). It recorded its first profit on its highest volume product, the Model 3, which is promising for the company’s future. And it took home Green Car Reports’ Best Car To Buy award for 2019. Next up, it looks likely to surpass the Nissan Leaf in all-time electric car sales in the U.S. (As a whole, the company already has, counting the Model S and Model X.)
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True, Teslas have benefited from the same tax credits and other incentives as other electric cars, and time will tell if sales continue apace once those credits diminish next year and vanish a year later. 
In the meantime, it’s hard to argue with the enthusiasm the company has inspired for electric cars, turning buyers into evangelists, and getting significant volumes of electric cars on the road faster than other automakers. Now investments in electric-car batteries by Tesla and other automakers look set to pay off with more affordable electric models. 
Teslas now have some viable long-range electric competitors, the Chevy Bolt EV, the upcoming Hyundai Kona Electric, and a flood of luxury SUVs, among others. Volkswagen last week announced a commitment to build 50 million electric cars, a figure Tesla will be hard-pressed to match.
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Meanwhile, California’s mandates are ramping up—along with those in China and Europe—to a point that will be impossible for automakers to meet without mounting a serious effort to build and sell electric cars.
With the expiration of the travel provision of California’s mandates last year, experts agree the time is approaching when automakers can no longer get away with only selling certain electric models in only one or two states. The electric cars they sell will have to be available to almost half of U.S. buyers who live in 13 populous states, and that should add to their sales momentum.
As Tesla reaches volume production of a relatively affordable electric car, and GM, Nissan, Hyundai, Kia, and VW expand offerings of more affordable electric models, maybe it’s time to declare victory, retire the derisive “compliance-car” moniker, and agree: Electric cars can be more than competitive with gasoline cars. They’re here to stay. And they’d better be good!

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