Electrified Vehicles Will Make Up Nearly 10 Percent of Global Vehicle Sales By 2025, Study Says

Electrified vehicles will triple their percentage of overall global new vehicle sales by 2025, according to a new report.

Navigant Research predicts that sales of hybrid, plug-in hybrid, and all-electric light-duty vehicles will go from 3 percent in 2016 to 9 percent of worldwide sales in 2025. For all of what the firm calls “EV” sales that consists of all three electrified vehicle powertrain types, Navigant forecasts plug-in hybrids will make up 72 percent of the total.

The trend toward plug-in hybrid electric vehicles (PHEVs) making the lion’s share of EV sales started this year as the Chevy Volt sales have been leading the U.S. market and the Mitsubishi Outlander PHEV has done so recently in Europe. In 2017, Navigant expects PHEVs will make up more than 36 percent of EV sales. More of that market dominance should come from expanding automaker applications of the powertrain, into new, larger vehicle body types. BEVs aren’t typically designed for these vehicle types as much as PHEVs, according to the Navigant study.

Affordable battery electric vehicles (BEVs) with the ability to travel farther than 200 miles will play a significant part of EV market growth as the 238-mile Chevy Volt rolls out to dealer lots and Tesla prepares to launch the Model 3 about a year from now. Pre-sale orders of about 400,000 Model 3s grabbed enough attention from a few automakers to move them toward ambitious targets for selling more electric car models in the next decade, according to the study.

The research firm did issue a caveat about BEV sales growth depending on the Model 3 and its well-publicized down payments.

“Alternatively, these numbers could be a response to the company’s hype machine – and they may overstate the long-range BEV opportunity,” according to the study.

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PHEVs would be changing places in market share with hybrid electric vehicles (HEVs) in the global market. Navigant forecasts that HEVs will make up 73 percent of the 2.6 million EVs it expects to be sold by the end of this year.

Long-range BEVs, expanding availability of PHEVs, and growth in HEV sales in Europe and China, should take the total up to 3 million EVs next year. For 2018, longer-range BEVs like the Model 3 should drive growth, and about half of EV sales will go to PHEVs as the market reaches 3.7 million.

Decline in HEV sales started last year, according to the study. That’s being driven by increasing popularity of PEVs taking some of hybrid sales away; automakers adopting fuel efficient technologies besides hybrid systems; sales leaning toward utility vehicles over cars; and petroleum prices staying down. As for now, hybrid sales are seeing a bit of uptick in Europe in the wake of the Volkswagen “dirty diesel” scandal.

The study also points to the role autonomous and connected vehicle technologies, and shared vehicles, will play in global sales of light-duty vehicles (LDVs). Shared rides, provided by companies such as Uber and Lyft, will increase usage of LDVs over alternative or public transportation modes, the study said. Navigant also thinks that autonomous mobility systems could lead to opportunities or threats to LDV powertrains, including EVs.

Navigant Research