RESEARCH: Market projections for EVs and hybrids

Electrical propulsion for vehicles and the rate at which it could displace the burning of fossil fuels remains a question subject to large uncertainties. In a new report exclusively produced for just-auto, John Voelcker assesses the outlook for hybrids and electric-drive vehicles out to 2015. In this extract from the published report he considers the issues surrounding volume projections.

In a global market that saw more than 20% of its volume evaporate over the last year, making projections can be viewed as a fool's game. Most OEMs now hesitate to give projections for monthly vehicle sales, much less the numbers of electric-drive vehicles over the next five years. And the political sensitivity around vehiclemakers' intentions to comply with government policies that, in some cases, don't yet exist means their executives are hardly keen to go on the record.

More than many such reports, this effort includes material from discussions with those OEMs that is to be used "on background only". While just-auto spoke to GM, Ford, Chrysler, and Tesla, among others, some material in this report must go unattributed. We have fleshed out the context and filled in the blanks with the announced plans, anticipated actions, and a number of educated guesses and hints from vehiclemakers, suppliers and analysts.

Conventional hybrid-electric vehicles provide a good baseline. As the first passenger vehicles sold with large battery packs since roughly 1930, they were utterly exotic in 1997 and are still tiptoeing toward mass-market acceptance. It's taken them ten years to achieve 2.5% of the US market; at roughly 1% globally, their penetration is far lower in every other global region. 

Most industry analysts expect plug-in hybrids and battery-electric vehicles to follow a roughly similar growth curve, though aggressive government policies to subsidise plug-ins may increase consumer take-up by compensating for the high cost of the battery packs over the first few years.

While start-stop or micro-hybrid systems seem likely to grow rapidly over the next few years, we have not included projections for them in this report—because they do not use high-voltage battery packs.

So how fast will hybrids, plug-ins and electric vehicles increase their total share over the next few years? Taking a rough midpoint among the various projections we reviewed for 2020 - five years beyond the scope of this report - suggests that for the global market as a whole, conventional ('full' or power-split) hybrids such as the archtetypal Toyota Prius will represent approximately 20% of vehicle production. 

Plug-in vehicles, however, will take just 6%, approximately split among pure battery-electrics (with ranges of up to 200 miles), plug-in hybrids (PHEVs), and extended-range EVs ('series' hybrids). 

Parenthetically, it is likely that diesel's share of the world market will begin to fall, as it seems likely not to establish a footprint for light vehicles in Asia (particularly China) or North America. Finally, it's worth noting that natural-gas vehicles may take as much as 2% of the global market, with much greater numbers in specific regions where natural gas is suitable as a road fuel.

As for the closer period covered by this report - from now though model year 2015 - penetration rates will have only just begun to make a noticeable dent in gasoline dominance. Hybrids seem likely to grow from their current 1% of global production to 4%-5%, representing 3m vehicles of a total volume of 70m. Leaders here are likely to be Toyota and General Motors, followed by Honda, Ford, and Volkswagen.

But plug-ins, in both hybrid and pure electric varieties, will make up 1% or less of the global market - less than 1m units a year in 2015 - as the cost of high-capacity battery packs continues to require substantial government subsidies to be affordable by actual consumers. 
This conclusion is supported by Table 1 at the end of this chapter, based on just-auto's industry interviews and market analysis. It is worth noting that this data will likely be revised once we see when and how the current downturn stabilises.

It is this high battery cost that causes market predictions to vary over such a wide range. At one end of the spectrum are what we will call the 'electro-sceptics', who believe the IC engine will remain dominant - albeit with far lower fuel consumption - over the next half-century. At the other end are what we term 'green optimists', who see continuous technology advances, rising oil prices, and greater public awareness steadily increasing market demand for plug-in vehicles. 

In the end, two factors external to the automotive industry will determine the rate at which electric-drive vehicles can be built and sold: the cost of a barrel of oil, and the degree to which government policies—both regionally and globally—impose a cost on the emission of carbon. Yet, given the industry's long lead times, vehiclemakers all over the globe must place their bets on core technologies for the next decade before those issues have come clear. 

- John Voelcker

This article was extracted from the full just-auto report, 'Global market review of hybrids and electric-drive vehicles- forecasts to 2015'.

This is just-auto's first global market review of hybrids and electric drive technology. With these sectors set to dominate alternative propulsion and the drive for better fuel efficiency over the short-term future, this report provides a timely review of the latest technologies from the main players, our analysis of market take-up and a review of the different technologies and where they are heading....