Study: Global Plug-in Sales Could Pass Up Conventional Car Sales

Light-duty plug-in vehicles may become cost competitive enough to surpass conventional vehicles in sales, without needing incentives.

A new study by Navigant Research predicts that by 2025, more than 68 million light-duty electrified vehicles will be in use globally, made up of hybrids, plug-in hybrids, and battery electric vehicles. Of that total, more than 37 million should be plug-in electrified vehicles.

BEVs will see a surge in growth in the near future with the cost of batteries reducing and their driving range extending. Connected and autonomous vehicle systems will tap into electrified vehicles as well, spurring sales further. Fundamental technology and industry trends lead Navigant to believe PEVs will be a viable option for consumers when compared to conventional internal combustion engine vehicles.

“Battery cost reductions are having dramatic impacts on BEV cost and range, portending significant market growth in the years ahead,” says Scott Shepard, senior research analyst with Navigant Research. “Further battery innovations alongside vehicle automation promise to significantly disrupt the nature and business of transportation, although this process will take decades to come to full fruition.”

Launch of the Chevy Bolt and the new Renault Zoe, and pre-orders for the Tesla Model 3, will be drivers of market demand for the affordable, longer range electric cars. Major automakers that had been on the sidelines are making moves to launch competitive PEV platforms to the promising long-range BEV market before the end of the decade.

“Growing availability among leading OEMs will spur greater consumer awareness and education, hence encouraging greater market adoption,” Navigant said in the study.

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Hybrid vehicles are expected to continue seeing a softening in market demand, with plug-in hybrids filling some of that gap, according to the study. The contraction of hybrid sales in the past two years had had several drivers, including the growing popularity of PEVs such as the Mitsubishi Outlander PHEV and refreshed Chevy Volt; a market shift from cars to utility vehicles, and continued low petroleum prices. Hybrids have seen market demand grow in one market, Europe. Diesel emissions cheating software previously used by Volkswagen has increased demand for hybrid vehicles in that region.

Navigant sees the breakthroughs in connected and autonomous vehicles, and in shared vehicles, behind PEV sales growth. In what the research firm calls autonomous mobility systems (AMSs), greater use of electrified light-duty vehicles may partially come from declining use of alternative or public transportation modes.

While use of automated, shared rides will take decades to seen any real substantial presence in the world, use of passenger vehicles and “the pool of industries that support it will change dramatically.”

That sets the landscape for PEV purchases and usage to surge, according to Navigant.


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