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Electric vehicles haven't been generating much green for carmakers.

General Motors, Honda, Ford and Toyota have relied heavily on leases and fleet sales to push their new, expensive electric vehicles -- base price of an electric Ford Ranger compact pickup, for example, is $32,795 -- and tepid sales have been accompanied by limited ad support.

General Motors Corp., which in late 1996 became the first major carmaker to sell an electric vehicle to the public, spent $10 million last year advertising its EV1 in Los Angeles, Sacramento and San Diego, Calif.; and Phoenix and Tucson, Ariz., said a GM insider. The launch of a conventional, gasoline-fueled car would likely receive at least $25 million in ad support.

GM has only leased a little more than 400 of the lease-only EV1 models so far.

American Honda Motor Co., which also does lease-only deals, said it hoped to lease 300 of its EV Plus cars during the first few years following its May 1997 debut in California. Honda leased about 80 last year.

Honda's electric car debuts in metropolitan New York in July, handled by a single dealer. Honda expects to repeat its California experience of one to two leases per month per dealer, meaning a maximum of 10 leases in New York through the rest of the year.


Auto executives attributed slow sales of electric cars to high prices, limited driving range, 3-to-6-hour battery recharging times and scarcity of public charging stations. The cars are being sold and leased in California and New York because of state laws mandating their sales in efforts to curb air pollution.

"There's a long way to go before we see consumer acceptance," said a marketing executive who asked not to be named.

Such small sales volumes don't support huge ad investments.

For Honda's New York launch, it will slightly alter print ads developed for the California debut by Rubin Postaer & Associates, Santa Monica, Calif., said Robert Bienenfeld, manager of alternative fuel vehicle sales at Honda.

RP Direct, Rubin's direct arm, handled direct mail targeted at environmentally concerned and technology-oriented consumers.

"We found we do need to advertise. We do need to get some awareness," said Mr. Bienenfeld, who declined to reveal ad spending.

The print-only buy is estimated at $8 million for this year.

GM has no plans to bring the EV1 to New York, but expanded the vehicle from its four original warm-weather markets to Sacramento late last year and San Francisco in March.

GM will increase its EV1 budget to $15 million this year, via Publicis Hal Riney & Partners, San Francisco. GM admitted the special effects-laden introductory commercial didn't offer information about EV1's technology and environmental benefits, so ads have been overhauled. TV was dropped this year, in favor of print primarily, plus a direct mail push.


Despite slow acceptance of EV1, GM "is very happy with our customers' devotion" to the vehicle, said a spokesman at the carmaker's Advanced Technology Vehicles unit.

But a 1996 America Online survey shows just how hard a sell the electric vehicles may be. AOL found 58% of the 9,081 members responding said they wouldn't be interested in leasing GM's EV1 if it were available where they lived.

Ford Motor Co., which started selling its Ford Ranger Electric Vehicle in January, was hoping for first-year sales of 1,000, but "sales are a bit slower than we had hoped for," said Sara Tatchio, assistant manager of environmental public affairs at the carmaker. "It's a very difficult market to nurture."

About 95% of those Ford sales are to so-called fleet customers, such as utilities and local governments, said Robert Rewey, group VP-marketing and sales at Ford.

"The retail market will develop," he said. "The value has to be there for the consumer."

Ranger EV gets very limited media support, about $2 million this year, via print ads by J. Walter Thompson USA, Detroit.


Toyota Motor Sales USA sells or leases its RAV4 EV sport-utility vehicle only to fleets. Southern California Edison has leased 131 of the 364 ordered to date, said Jeremy Barnes, environmental administrator at Toyota.

"We're not ready to go to retail sales," he said. "There's a lot of drawbacks to electric vehicles, like limited [mileage] range."

Toyota does very limited print advertising, only in trade magazines. Saatchi & Saatchi, Torrance, Calif., handles.

Ironically, even as the carmakers are using the electric vehicles to paint themselves "green," the companies are getting into hot water with their internal-combustion vehicles.

Honda recently agreed to pay $12.6 million in federal and state civil fines over clean-air compliance issues. Honda said some of its vehicles' on-board emission diagnostic systems stopped working under certain circumstances.

Ford also agreed to a $7.8 million settlement after federal authorities claimed its full-size vans had defective fuel-economy equipment. Ford said in a statement it cooperated fully to resolve the matter.

Contributing: Alice Z. Cuneo.

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