Consulting Firm: Slow Growth for Electric Cars

Electric cars have garnered a lot of media attention in recent months. Some consumers might get the impression that gas-free vehicles will be ready to take global roads by storm in the next year or two. But according to a new report from PricewaterhouseCoopers, production of all-electric vehicles will take another eight to 10 years before reaching the level of today’s hybrid cars—and that’s with significant government subsidies and incentives.

Speaking at the 2008 Los Angeles Auto Show last week, Carlos Ghosn, CEO of Nissan and Renault, promoted his company’s plans to become the leading mainstream manufacturer of electric cars. Ghosn predicted that there would be as many as 7 million pure electric vehicles being sold around the world by 2020. By contrast, the PWC “Analyst Report” published last week pinned the number of electric vehicles that could be produced (but not necessarily sold) at approximately 500,000 units in 2015—growing to 1 million by 2017 and 1.5 million by 2020.

In 2008, nearly 600,000 hybrid gas-electric cars will be sold worldwide. According to industry analysts, that number will exceed 1 million by 2010 or 2011.

The PWC report acknowledges that electricity is cheaper than existing automotive fuels, but identifies vehicle purchase price as the highest hurdle. The report warns, “Only when pilot programs encouraged at the state level become more widespread, will the full market potential for pure electric vehicles be unlocked for the next automotive generation, otherwise electric vehicles are destined to remain niche.”

Full performance batteries using lithium ion technology suitable for electric cars are expensive, ranging in cost between $9,000 and $13,000. PWC believes that the success of electric cars can be decoupled from government support only after battery technology reaches maturity.

PWC recommends that governments and automakers provide incentives and greater infrastructure—while automakers focus on extending driving range. Electric cars emerging in the market are expected to travel approximately 100 miles before requiring a recharge.

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  • barry

    Any major change will be slow. Better Place and California are setting the pace and a lot will depend on legislation and fed real tax incentives and backing etc. I think they are way ahead of graph. Hopefully Obama will follow through on his campaign promises to make America energy indepence. Our last stimulus package cost 168 BILLION. It didn’t do a thing to improve our economy. Not enough credit is being given to the role the record breaking cost of gas played in the downward spiral of our economy. We have so much available to us in the way of FREE energy sources such as wind and solar. We have modern technologies such as hybrid and electric plug in cars. Why don’t we invest in America becoming energy independent. 168 billion would go a LONG way towards getting some of these things set up plus would create millions of badly needed new jobs. Jeff Wilson has a new book out called The Manhattan Project of 2009 Energy Independence NOW. I highly recommend this book for anyone worried about our economy and our dependence on foreign oil.

  • 38mpg

    You have forgotten about a production electric car. The Reva manufactured in India.

  • nothanks

    Sorry, not crash-worthy and they have not announced any intention of doing so to enter the US market.

  • sean t

    like the nano, a brand new @ a few thousands $.
    Drive at your own risk.

  • Dave K.

    This is why the plug in hybrid makes so much sense, instead of a full electric car with a 100 mile range that has a $10,000 battery you build a PHEV W/a 40 mile range that has a $4,000 battery, reduces the cost by perhaps $5,000.
    That covers 80% of your driving and you still have unlimited range using the existing infrastructure.
    It also makes the product more acceptable to the consumer, no “range anxiety”.

  • Gerald Shields

    One thing to worry about is falling price of gas. It’s back down to the average cost in 2004.

  • RKRB

    I would suspect another problem relates to recharging times during longer trips, and lack of electricity outlets for people who would need to charge them overnight at a place other than the home. The plug-in hybrid would have a distinct advantage here, just as a lighter and cheaper “standard” hybrid would have an advantage over a plug-in for those who routinely take longer trips away from a charging outlet.

  • HereAndNow

    I’m sure once the electric car momentum gets going, we’ll see a lot of range-extender solutions come on the market. GM is planning a small engine for the Chevy Volt, but perhaps something like the stirling engine design that Dean Kamen unveiled recently, could be another option. See it here:

    We just need to get the ball rolling and the innovations will follow.

  • Sturz McGoo

    Easy there big guy. Gas has been affordable for over a month now and car sales have not gone up in the same exponential manner they did when gas prices were over $4.00. Except for Toyota, they continue to break new records for lack of sales. The rise in gas prices were a wake up call to America. We basically said: “What the heck are we doing? All those big cars were above our means both in sticker price, monthly payment and cost of travel.”

    And it happened at a time when Americans travels the most…the summer. The trust is gone for a long time. It would be in America’s best interest to continue it’s research and development to own the hybrid, electric and alternative fuel auto production like it did for trucks the past 10 years.

  • mdensch

    Sturz: I would point out that even Toyota is suffering from lagging sales in the current economic climate. Overall sales for this year were down 10 per cent through September and some of its US built products such as the Tundra fared even worse — Tundra sales down 60 per cent, forcing the company to temporarily suspend production at its new plant in Texas.

    Toyota is, of course, in a better position to weather these difficulties, but it is not immune to them.

  • Haezei bllete

    Yes I read that toyota is way down.

    Everyone is down. Its funny people focus on GM in your country but that is your Americas auto maker.

    We drive a GM in india and like them a lot. We would never buy a toyota. We prefer the comfort of american cars.

  • Peter

    This is the gas-guzzlers´reaction.

    A Vectrix (all-electric motorcycle, high-way capable and with a 100 km. range), cost the half of a gasoline motorcycle (BMW 400 cc), including manteinance.

    The electricity cost 6 euros / month and the gasoline 6 euros / week. Who is going to pay MORE for a gasoline motorcycle ?. NOBODY.

    Transport electrification is unavodable.


  • Peter

    Toyota is NOT way down. Big Three are way down. Toyota Prius is way UP. It is a BIG SELLER. If GM, Ford or Chrysler would have cars as Toyota Prius, would not be in the bankrupcy.

    Toyota is going to be the king in the United States.

    The Goverment can TRY to save them, but they are not ready for this. They have no plans to sell electric cars in 2009 (really, that all the cars would be electric).


  • Peter

    Transport electrification is a success in small and affordable vehicles (i.e. the said Vectrix).

    GM would join to a motorcycle manufacturer and sell also electric motorcycles.

    Small cars as the Smart ForTwo Electric Vehicle has found new electric rivals: Toyota iQ and VW Chico.

    On the other hand, electric vehicles buyers recieves money (tax credits).

    Who is going to buy gas-guzzlers ? . As said, nobody. Everybody is buy or going to buy electric vehicles.

  • Peter

    You don´t need to buy the batteries with the car. Better Place is renting them to you. And you can replace discharged ones by charged ones in the Better Place exchange stations.

    You one need to pay the electricity, not the batteries.

  • Denis Lang

    What is a Neighborhood Electric Vehicle (NEV)

    It is critical that one understands what a NEV is and what it is not. Neighborhood Electric Vehicles (NEV) is not required to satisfy highway capable standards when that clearly is not the intention or legal requirement of the car.

    The NEV meets or exceeds all safety standards of its low-speed vehicle class, as defined by Transport Canada. In November 2007, Transport Canada granted the ZENN use of the National Safety Mark enabling the ZENN to begin selling in Canada. There is a deliberate attempt to confuse the issue by constantly comparing the NEV to highway capable passenger vehicles. The NEV was not designed to travel on 400 series highways and therefore does not have to meet the same high-speed collision requirements. Just as you would not expect a motorcycle, or scooter, bicycle or bus to meet the same safety standards as a passenger car, so too must a low-speed vehicle be held to the standards defined by its class.

    In terms of vehicle class, the low-speed vehicle (LSV) has an absolutely exemplary safety record. Approximately 40,000 LSVs have been operating on public roads in the United States for nearly ten years without any evidence of safety problems. In fact, data from the National Traffic Highway Institute (NHTSA) found that there have been no fatalities associated with the use of LSVs in mixed-use environments since 1996 (when the data started to be collected). The LSV is among the safest classes of vehicles in operation in the United States . The admirable LSV safety record can be attributed to such things as:

    – Better driver control and awareness at lower speeds
    – Increased reaction time due to lower operating speeds
    – Shorter braking distances
    – General use of LSVs in lower speed applications, and that drivers of LSVs are fully aware of their operating design and drive them appropriately

    The LSV also provides a significant increase in occupant protection when compared to other low speed transportation options in the marketplace such as bicycles and motorized scooters.

    The relative position of the LSV in terms of road safety must also be understood to include increased protection for cyclists and pedestrians in the event of a collision with a lighter weight, slower moving low speed vehicle.

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