Analysts: Electric Cars Will Trail Behind Hybrids

December 4, 2009

Production of low-emission electric drive vehicles is no longer an interesting sideline for global automakers. It’s becoming the big show. Industry analysts—as well as consumers considering their next purchase—are now wondering which technology holds the most promise: Hybrids or Electric Cars?

“Hybrids are the only vehicles that can address both fuel efficiency and cost issues while maintaining driving performance,” Toyota President Akio Toyoda said at this year’s Tokyo Motor Show. Nissan’s reply is that only all-electric cars, like the Nissan Leaf expected next year, gives you zero emissions at the tailpipe. Meanwhile, General Motors, Toyota and others have plug-in hybrids in the works, which operate (to varying degrees) like an electric car, but rely much more heavily on electric motors and rechargeable batteries.

As reported on MarketWatch today, Tokyo-based Macquarie Securities recently raised its 2020 global market-share estimate of all alternative vehicles to 12.0 percent of total drivetrains, from 10.6 percent in its previous estimate. Hybrid electric vehicles account for 7.1 percent of the total, up from 5.6 percent previously.

“We assume, then, that pure EVs will account for just under 2 percent of total volumes in 2020,” said Macquarie analyst Clive Wiggins in a report. “Our assumption that sales of hybrid electric vehicles will outpace those of pure EVs is more favorable for Toyota and Honda than Nissan,” he said.

“The fact that [Toyota] is so far ahead may lead to a situation where its peers contrive to steer the market away from hybrid cars to avoid losing out,” said Wiggins.

Peugeot Citroën is another company moving ahead with electric cars in order to not be left out. The UK’s Times, among others, is reporting the company is ready to spend about US $3.3 billion to purchase a large share of Mitsubishi, in order to create an alliance for producing electric vehicles. The French group’s investment would also allow Mitsubishi to continue developing its i-MiEV electric vehicle. In September, Mitsubishi and Peugeot agreed to develop a vehicle based on Mitsubishi’s i-MiEV electric car, to be sold in Europe by the end of 2010 under the Peugeot and Citroën brands.

The i-MiEV went on sale in July, but, considering the purchase price near $40,000, sales have been disappointing. Cost is a major concern.

GM Vice-Chairman Bob Lutz, speaking at the Los Angeles Auto Show earlier this week, said most Americans would not be willing to spend the premium of thousands of dollars for an electric car. He pegged the total market for plug-in vehicles by 2015 at 250,000 to 300,000 units. That’s approximately 3 percent of the new car market, roughly the size of today’s market for gas-electric hybrid cars—10 years after the first hybrids were introduced in the United States.

As carmakers race to figure out their respective places in the new world of electrified vehicles, consumers wanting to drive a hybrid that uses less petroleum—or a pure electric car that uses none at all—will soon have an unprecedented number of options.


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  • Christof

    Hybrids might win out for awhile, because most people are afraid of trying something new. But eventually, EVs, bio-fueled vehicles, and — if they can figure out how to make it without using outrageous amounts of fossil fuel — hydrogen will have to win out.

    Why?

    Because the world’s oil supply is going to run dry, almost certainly within the next 100 years.

    No one’s talking about this looming reality. The best we can get in mainstream discourse is a few references to “Peak Oil” (which essentially is right now) and 20- or 30-year oil supply forecasts.

    No surprise there, really. Modern society’s too blinded by short-term economics to see the long-term picture…

  • greenbean

    Yeah, I agree with you. Most people I speak to think that this ‘peak oil’ is the same as one decades ago when the North American continent ran out. This time around though I think that’s it. If hydrogen vehicles can be produced, manufactured and sold at a marginal price, the first world consumer will be very happy and it’ll take off.

    Alternative energy is like politics. Why worry about 50 or 100 years from now? We’ll be dead by then. This ignorant attitude will impend fossil fuel alternative car “evolution”.

  • Mr.Bear

    I think hybrids will win out in the short term because most people are worried abou running out of charge. When the bulk of the new EVs come out in in 2011, a driver will essentially be tied to a 25 – 150 mil radius of home. And that assumes warm weather, few hills, and moderate speeds. Sure 90% of trips fall in that range. But what do you do for the other 10%?

    $40,000 for an EV would be acceptable if it has the same features of any other $40,000 car. Offer me a $40,000 economy car and I’ll say “no thanks”.

    I see a day when most families have one EV and one plugin hybrid: one car for around town and one for around town plus road trips. It will probably take 50 years to get there. But we will get there.

    The question for hybrids is: is an EM + ICE more efficient than an EM + generator.

  • crookmatt

    I think based on today’s battery technology coupled with today’s fuel prices this article has it right, you can’t justify pure-EV vehicles for most consumers based purely on economics.

    However what happens when oil prices jump significantly, while at the same time some significant battery technology breakthrough’s occur? The result will be that EV’s will eventually become more economically viable than hybrids or conventional cars.

    However until this point they will probably remain in the single digit percentage of total car sales, I don’t think the economic parity between EV’s and Hybrids will occur for 1-2 decades, so again, the article is probably right.

  • Charlie C

    It’s important to consider this from the global point of view. Soon, China will be buying more autos than the U.S. China is quite capable of devising and executing a long-range strategy. They have already targeted hybrid and all-electric vehicle technology as being crucial to their survival and they have begun manufacturing such vehicles. Of course, the quality is still low, but unless you have lived there you can’t appreciate how very, very quickly the Chinese are moving on all fronts. They are currently moving about 4 times faster than we are in everything from education to manufacturing to infrastructure growth to housing. Just look back 10-15 years at how China used to be; now think ahead 10-15 years, taking into account that this growth is not linear, but closer to being exponential. In 15 years, China may well be the major competitor against Japan for the auto market. And of course this is much bigger than just the auto market. We have three choices: lead, follow, or get out of the way. There is little indication that we are qualified to lead any more. I hope I am wrong.

  • AC

    I agree. The progression to EV(100+ miles) cars will be a gradual one where people will keep the older gasoline powered car that’s paid for and buy an EV.

    Or sell the gasoline car and buy a Hybrid(10-50 miles electric) as the only car.

    EVs will be the second car for a while until distance is improved and the price of the vehicle comes down to match the gasoline or hybrid cost with equal available distance.

    With many more manufacturers offering Hybrid versions of their best selling gasoline powered vehicles, the price for going Hybrid will continue to balance out.

  • Max Reid

    Its true, Hybrids will start gaining bigger market share, just like it captured 7 – 10% share in Japan.

    It will be followed by plugin hybrids. Plugin Prius with 13 mile range is going to be launched.

    We can charge it from our household main and run it in EV mode for the first 13 miles with gas engine taking thereafter.

    Everyday if we drive even 10 miles / day and 300 days /year, we will end up driving 3,000 miles / year in EV mode and this will be some 25 % of the distance driven.

    As the battery prices go down, range can be extended to 20, 30, and even 50 miles. It does not make sense to make it 100 or 200 miles, since most people drive less than 50 miles / day.

    Ofcourse, the taxis and buses can have even 100-300 mile range, since they drive so many miles / day.

    Important thing is to make the vehicle affordable to many and to get the return on investment on the battery.

  • Max Reid

    Yes, China is the #1 seller of vehicles.

    They are using around 8 millions barrels of oil / day and have around 80 million vehicles in their roads. At the current rate of selling 13 million new vehicles / year and increasing at the rate of 20 %, they may have 160 million vehicles in next 6-7 years which means they will be using 16 million barrels of oil / day.

    So where is the extra 8 millions barrels of oil / day is going to come.
    If it does not, we can see the prices shooting up.

    Sooner, we jump into Hybrids, plugins, EVs (atleast for Taxis, Buses, Postal Vans etc), we can be safer.

    CNG and Ethanol are also other options. There are nearly 11 million CNG powered vehicles and 15 million flex-fuelled vehicles worldwide.

  • Max Reid

    http://www.greencarcongress.com/2009/12/prius-japan-nov-20091205.html#more

    Prius has 10% market share in Japan with Insight capturing another 3%. Because of battery shortage, they could not increase the Prius production, otherwise they could sell more in both Japan as well as USA.

    I saw few Prius Taxis in Chicago, since they vehicles give more mileage in city, it could be very ideal vehicles and the taxis all over the USA can start replacing their Crown Vic’s, Grand Marq’s and Towncar’s with Prius and Insight.

    I wish GM and Ford also launch a small Hybrid Hatchback to compete with Prius, this will bring down the price and make it a mass market car.

  • sean t

    Max,

    I’d keep Ford in and eliminate GM from the equation.

  • 10 of 9 of borg

    I think at the monent the Hybrids will do well over anything else. I am more interested to know if there would be a an energy solar car in the future?

  • David

    “When the North American continent ran out”?????

    What planet are you on? Depending on which report you believe, there are either 57, 70 or 210 *TRILLION* barrels of *proven* reserves in North America alone (the big difference comes from how they report on Canada – 2 reports say Canada has around 26 TRILLION barrels, and one says 178 TRILLION – and I believe it has to do with how they’re measuring the tar sands)

  • Joshua

    David, where are you getting those numbers from? Those are about 2 orders of magnitude higher reserves for oil than I have ever heard. As for tar sands, yes there are more expensive and more polluting ways to get energy. The current production of tar sands is very inefficient and is polluting huge areas of Canada. Last I heard there is a movement in Canadian to keep tar sands production from expanding just to mitigate the environmental damage.

  • Joshua

    David, where are you getting those numbers from? Those are about 2 orders of magnitude higher reserves for oil than I have ever heard. As for tar sands, yes there are more expensive and more polluting ways to get energy. The current production of tar sands is very inefficient and is polluting huge areas of Canada. Last I heard there is a movement in Canadian to keep tar sands production from expanding just to mitigate the environmental damage.

  • ex-EV1 driver

    . . . and if the oil companies get their way: Electric Vehicles will trail behind hybrids for a few thousand years.

  • ex-EV1 driver

    10 of 9 of borg,
    Solar powered cars are available today. They are called Electric Vehicles or EVs and you can plug them into PhotoVoltaic Cells (Solar Cells) on your roof.
    Cars are too small to produce enough electricity from solar power to be worth the effort but most house roofs are plenty big enough.

  • Shines

    Just read about silver nanotube batteries that will have 10 times the capacity of Lithium Ion and cost less.
    If these bacome available and expand electric vehicle range 3 times (300 miles) and size by 20 percent – midsized, then we will have a very viable alternative to hybrids.

  • sean t

    On another note, I found this on the net, re Bob Lutz:

    ” . . .
    Yes, this is the same bombastic quote machine who only last year embarrassingly called global warming “a crock of shit”. It’s a comment he now concedes wasn’t his smartest public utterance.

    Now he’s saying we can’t rely on oil to supply 98 per cent of the world’s automotive requirements, that we must develop alternative means of propulsion.
    . . .”

    Better late than never.

  • ex-EV1 driver

    Lutz and his toady, Dave Barthmus also told the world that nobody wanted the EV1, they weren’t crushing them, they were only able to sell about a thousand of them (they only made about a thousand of them and each one found a lessee – they refused to sell them), and they didn’t have a waiting list.
    You can tell when he is lying – his lips are moving.

  • tapra1

    said Macquarie analyst Clive Wiggins in a report. “Our assumption that sales of hybrid electric vehicles will outpace those of pure EVs is more favorable for Toyota and Honda than Nissan,” he said.Enter Technology