Updated: Electric car firms downplay sales "blip"

Electric car firm Nice Car Company has reportedly entered into administration as new figures from the Society of Motor Manufacturers and Traders (SMMT) showed that sales of electric vehicles during the year to November slumped 56 per cent to just 168 cars.

However, industry insiders insisted that the drop in sales was to be expected given the tough economic climate and falling sales across the auto market. They also argued that the long-term outlook for the emerging sector remained upbeat, with a growing number of manufacturers looking to bring higher-performance electric vehicles to market over the next two years.

Nice Car Company was founded in 2006 by ex-Lotus colleagues Julian Wilford and Evert Geurtsen and had been selling an all-electric version of the French-made Aixam Mega.

However, with the vehicle priced at more than £11,000 sales had slowed and according to reports in The Times the company was yesterday forced to call in administrators.

The company was unavailable for comment at the time of going to press.

A spokeswoman for GoinGreen, which sells the rival G-Wiz electric car, confirmed that it too had seen a fall in sales, but insisted that the company was well positioned to weather the effects of the economic slowdown.

The SMMT said that demand for electric cars had been particularly badly affected by the economic slowdown. "A lot of the purchases of electric cars are second cars for people to drive in the city," said a spokeswoman for the trade body. "In the current economic climate, spending on additional second cars was always going to be cut."

However, she added that the emerging market had also been poorly served by politicians failing to back up vocal support for electric cars with the policy measures needed to stimulate the market.

For example, the City of London scrapped free parking for electric cars in the summer, while proposals by Mayor Ken Livingstone to extend the exemption from the congestion charge to small petrol and diesel vehicles are also believed to have hit demand for electric vehicles, despite Boris Johnson's subsequent decision to scrap the proposals.

"Some of the policies that supported electric cars have been removed," said the GoinGreen spokeswoman. "There is a sense that the government has to put its money where its mouth is."

However, experts insist that with the recent report from the government's Climate Change Committee signaling plans for a huge expansion in electric car ownership, the longer-term outlook for the sector remains remarkably positive.

"The economy is a major factor in the slowdown in sales," said SMMT's spokeswoman. "Manufacturers are still investing a huge amount in improving low-carbon vehicles and in the long term, electric cars will have a big role to play as part of a portfolio of low-carbon cars."

Richard Bremner, editor of the Clean Green Cars website, agreed the prospects for electric cars remained strong despite the recent fall in sales.

"The current electric cars on the market are not recognisably in the style of conventional cars," he said. "But there are plenty of other models in the pipeline from manufacturers... that will address many of the performance issues. This story does not prove that there is not latent demand out there for electric cars."

Underlining the long-term confidence in the electric car concept, BMW this week debuted an electric version of its iconic Mini, while the high-profile Project Better Place yesterday added Hawaii to the growing number of regions looking to deploy its innovative electric car recharging network.

Following hot on the heels of the announcement that the company is to install an electric car network in San Francisco, it has revealed plans to have a recharging network in place in Hawaii by 2010.