New Study Outlines What’s Needed For PEVs To Boom Past 1% Sales

A new study says key market dynamics are ready to lead electric car sales beyond their current 1 percent of total U.S. new light-duty vehicle sales.

The study, written by Brandon Schoettle and Michael Sivak of University of Michigan, has analyzed progress being made leading to wider acceptance of plug-in electrified vehicles.

One of the key indicators of market acceptance cited in the study has been looking at sales growth since the new technology was introduced to the U.S. market in late 2010. Sales of PEVs – including battery electric and plug-in hybrid electric vehicles – have increased more than 700 percent in the U.S. since 2011.

That’s been a much faster growth rate than U.S. hybrid vehicle sales witnessed in the early 2000s, and that new model segments in internal combustion engines typically see in their first years.

One market dynamic that’s expected to play a part in sales growth, in the study, is that PEV pricing is coming down in the market and becoming more competitive with conventional gasoline-powered cars.

For conservative consumers who study the numbers, fuel economy ratings are looking good for both PHEVs and BEVs. The study found PHEVs to be 3.5 times more fuel efficient than comparable gasoline-engine vehicles and BEVs at about 4.5 times better fuel economy than conventional ICE-powered cars.

For environmentally concerned consumers, the argument is easy to make on PEVs emitting much lower greenhouse gas than ICEs on a well-to-wheels comparison. Those numbers are starting to look even better as more renewable energy is making its way to electric power in the U.S., the study says.

Driving range is getting much better – and is a key selling point for BEVs coming to market. The study finds that some of the longest-range BEVs are now capable of traveling distances similar to some PHEV and ICE vehicles.

Charging times are still much longer than gasoline-powered cars. PHEVs are taking away some of the concern for car shoppers. On the BEV side, the good news is that energy density is increasing and battery cost is decreasing.

The charging infrastructure is seeking positive signs, which makes up a big slice of the market dynamics influencing public opinion on PEVs. The study poits to rapid growth in public charging stations in recent years – making it up to about 16,000 stations currently available in the U.S.; these stations are providing about 35,000 individual charger connections.

Electricity prices have remained relatively low and stable – and are projected to do so over the next several decades. That provides PEVs with a competitive edge as consumers remember periods of gasoline price volatility in recent years.

“Smart” charging is also helping ease concerns over using electricity as the car’s power source. These systems being adopted by utilities across the country are able to optimize balancing of charging prices versus demand.

Growth in fast charging also seems to be helping, where networks such as Tesla’s Supercharger ports are seeing widespread growth across the country.

SEE ALSO:  EV Owners Slapped With Hefty Charging Fees During Peak Demand

The study also sees hope for PEV growth coming through public opinion and government support.

Vehicle sales trends are showing that interest in PEVs in recent years. Car owners are becoming more willing to consider a PEV it were offered in their current vehicle type preference – such as car, SUV, pickup truck, van, etc. The study also finds that interest should increase if PEV variations of their current vehicles were to become available.

Government incentives are playing their part at all levels – including grants available for advanced battery R&D and coming through federal tax rebates.

State rebates for PEVs are playing a big part as well. The study found that all but three states offer some form of financial incenetive for owning a PEV.

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