Research company Frost & Sullivan (F&S) estimates that the European market for electric vehicles (EVs) could potentially grow to 480,000 units by 2015. However, it cautions that more government support is needed – on both the supply and demand side.
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F&S says that European governments ‘fall short’ in terms of offering EV-related subsidies to consumers. The German government, it says, offers no incentives to EV customers except for a car tax exemption for five years. F&S maintains that this is insufficient motivation for consumers to consider the purchase of an EV.
Countries such as France, Netherlands, Belgium and Austria offer subsidies on green vehicles but these are not clearly defined, it says.
In Italy, the tax exemptions and subsidies are limited to specific regions within the country. Some of these policies are old, others lack public awareness and haven’t been sufficiently advertised or detailed.
F&S cites Denmark as proactive in its support of EVs. Denmark is one of the highest auto tax collectors in Europe and, while it doesn’t offer direct purchase subsidies, the government does offer consumers the incentive of waiving the 180% tax on vehicle purchase for an EV.
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By GlobalDataF&S points out that governments have announced different forms of incentives. For instance, the UK government announced a subsidy of up to €5,600 (£ 5,000) for EV buyers – the first scheme that encourages consumers to such high levels. The US government offers a tax credit of up to €5,800 ($7,500) for EV consumers, and the Chinese government has proactively offered subsidies of up to €6,700 for taxi fleets and agencies for the purchase of an electric car.
But while consumer incentives have been offered, there are not enough vehicles on the road to utilise the benefits. Paralleling the latest subsidy in UK are problematic issues connected with the supply of EVs till 2012, F&S says.
It is expected that, with the exception of some niche manufacturers like G-Wiz, Tesla, and a few others, only Mitsubishi will have a market ready model available in 2011. Most OEMs including Nissan, BMW and Renault are expected to enter the market only in 2012 and therefore the total volume sales in the UK will be restricted to less than 20,000 units in 2011. If this is the case, then the government will be spending less than GBP100 million in 2011, assuming the full subsidy of £5,000 is used by all consumers.
Frost & Sullivan estimates that the European market for EVs is likely to be about 480,000 units by 2015. Most OEMs including BMW are currently in the testing phase of their vehicles and are at least three years away from mass roll out.
In the meantime, consumer subsidies should not only have well-detailed budgets and clarity, but, governments should also ensure that an adequate number of vehicles are available, F&S says.
The firm also says that to make the EV dream a reality, governments need to ensure the availability of at least four charging points per EV in the 1st year, thereafter reducing to 2.5 charging points per EV by the 5th year. A fast charging infrastructure is also required, possibly including battery swapping stations at a ratio of one per 100 EVs sold during the 1st year, followed by one per 1000 EVs post the 5th year of sales. This density of charging station networks will be able to meet the majority of EV owners’ charging needs, especially when battery technology is improved such that EVs can travel further on a single charge, F&S says.
A key opportunity for European governments with EVs is to take the lead in developing battery technology. Incentives could be provided to local manufacturers to encourage them to create and keep jobs in Western Europe instead of moving them to the Far East, as is currently the case.
