Wired said:Another day, another study of the potential market for cars with cords. This one is from IHS Global Insight, which says plug-in hybrids and battery electric vehicles will comprise nearly 20 percent of the global market by 2030.
There’s no doubt the cars will be here. Most of the major automakers are pouring hundreds of millions of dollars into the development of plug-in hybrids and electric vehicles, and at least two of them — the Chevrolet Volt and Nissan Leaf — could be on the road in some areas by year’s end. The question is how well these cars will sell. The Global Insight analysts peering into their crystal balls see an 8.6 percent market share for plug-in hybrids and a 9.9 percent share for electrics within two decades.
“The advantages of electric vehicles are numerous — the multiplicity of energy sources, reduced emissions, reduced noise, the possibility of reduced operating costs — but so too are the challenges,” said Philip Gott, director of the team that compiled the report, “Battery Electric and Plug-In Hybrid Vehicles: The Definitive Assessment of the Business Case.”
Ah, the challenges.
The Achilles’ heels of the technology are well-known: relatively limited range and the high cost of batteries. Range is only an issue for battery electric vehicles, and most on the horizon top out at 100 miles. Although that’s more than adequate for the vast majority of people, consumers still worry about getting stuck with a dead battery.
Cost is a bigger issue. Batteries are expensive, with estimates ranging from $500 to $1,250 a kilowatt-hour for lithium-ion packs. It adds up quickly considering the Volt plug-in hybrid has a 16-kilowatt-hour pack and the Leaf EV has a 24-kilowatt-hour pack. Neither company has said what their cars will cost, but word is GM wants to keep the Volt under $40,000 and Nissan is shooting for something between $26,000 and $34,000.
Volvo plans to have a test fleet of C30 Electrics on the road next year.
Because batteries remain so pricey, a recent report by Boston Consulting Group concludes, electric vehicles will remain expensive and a small fraction of the market for the foreseeable future. But automakers and most EV advocates expect battery costs to come down sharply as the technology advances and the cars catch on. Automakers point to the consumer electronics industry when they say battery costs could fall to as little as $250 a kilowatt-hour.
The feds are betting heavily on the technology as well. The Obama administration has set aside $2.4 billion to spur development of next-generation batteries and electric vehicles, and it is loaning money to companies like Tesla Motors, Fisker Automotive and Nissan to develop EVs. The Department of Energy gave General Motors $106 million in grants to refurbish an old factory to produce batteries for the Volt. And let’s not forget the $7,500 federal tax credit for EVs.
Still, the consulting firm PTRM says battery costs will have to fall 50 percent before the total cost of owning an EV approaches that of a conventional automobile.
The analysts at IHS Global insight say there are other issues that could hinder the acceptance of EVs and plug-in hybrids. They include consumers’ questions about operating costs and safety, and questions about whether the nation’s electrical grid can handle the influx of vehicles.
Mark Duvall, director Electric Power Research Institute, has said 10 million electric vehicles would need less than 1 percent of the juice generated in the United States. Each of those cars would draw about 700 watts. “Three plasma TVs, in one year, use about as much power as a Ford Escape plug-in hybrid,” he said.
Still, the grid may need improvements at the local level — new transformers, for example, or overhauled substations — to handle the influx. Duvall argues cars with cords require a near-term investment but yield long-term benefits. They include a more efficient generation system with greater integration of renewable energy sources and reduced need for new peaker plants, which run only at times of high demand.
The analysts at IHS Global insight say ensuring the grid is up to snuff will require automakers, car dealerships, municipalities and utilities to work together. But that’s already happening to some degree as automakers like Ford and General Motors forge partnerships with utilities.
Looking at the bottom line, the analysts say plug-in hybrids will comprise 8.6 percent of the global auto market by 2030 and battery electrics will comprise 9.9 percent. Those figures are more or less in line with other studies we’ve seen recently. The seers at Boston Consulting predict 26 percent of the 54.5 million cars sold in China, Japan, the United States and Western Europe in 2020 will have an electric drivetrain of some kind, but they’re including conventional hybrids like the Toyota Prius in the mix. Just 6 percent of those cars will be electrics, the firm says.
The guys at PRTM are a little more bullish when they say 10 percent of all cars sold in 2020 will be electric. That’s the same figure Nissan CEO Carlos Ghosn expects, citing Nissan’s findings that 8 percent of Americans and 9 percent of Europeans are “hand-raisers” who say their next car will be electric.
As for where we’ll see all these cars, Global Insight says the electrics will be found largely in urban areas where range isn’t a big concern. Plug-in hybrids will find more homes in the suburbs, where people drive longer distances and range anxiety is a real concern.