Market Monitoring

Market Penetration Forecast

Electric mobility refers not only to cars but also to vehicles of many kinds including bikes, scooters, powered-two-wheelers, delivery vans, and collective transport vehicles.

Drawing from a large scale review commissioned by the European Environment Agency (ETC/ACC, 2009), electric vehicles represent only a niche market in today's global fleet.

This niche has been dominated by relatively low performance light electric vehicles and converted plug-in hybrid electric vehicles, produced by small manufacturers on a small scale.

According to the European Automobile Manufacturers’ Association, mass-market introduction of electric automobiles will start in 2011 and 2012, and the market share for new electrically chargeable automobiles will be in the range of 3 to 10% by 2020 to 2025, or between 450,000 and 1,500,000 units, depending on how quickly outstanding challenges can be addressed. In the US, the consultancy company Deloitte (2010) foresees a 3.1% market penetration rate by 2020 equivalent to 456,000 units.

So electric vehicles will continue to have a small market share compared to ICE automobiles, while petrol and diesel – although increasingly in conventional hybrid powertrains - are likely to remain the dominant source of power for at least the next 20 years.

This reinforces the need to continue efforts and incentives to improve the environmental performance of conventional ICE vehicles, and to encourage and incentivise the continuing development and market adoption of Hybrid Electric Vehicles (HEV) - as well as maintaining basic research into alternative fuels.

Different Technologies Available

Large manufacturers are catching up quickly, however, and introducing plug-in hybrid vehicles or fully electric vehicles to the market. It is  not clear which version of these technologies (within the same area of lithium batteries) will dominate in the near future. Moreover, electric vehicles are only one option out of the wide range of alternative technologies which have the potential in the longer term to reduce emissions and increase fuel efficiency, not to mention the still wide margins that exist for improving technologies applied to internal combustion engines. The range of options available includes:

• Alternative fuels (LPG, methane, second-generation biofuels, hydrogen) which are particularly effective in reducing CO2 levels;
  
  
• Advanced technologies in internal combustion engines, which present themselves as the  most effective way to reduce CO2 emissions. These include engine downsizing, direct injection, turbo/supercharging, and variable valve control.

That is why FIA is supporting the Global Fuel Initiative through the “50by50 campaign”.  This initiative – which is a technology-neutral commitment - has the aim of making cars 50% more fuel efficient by 2050 worldwide, with some intermediate steps by 2020 (30% for new cars and 20% for stock of all cars) and 2030 (50% for new cars and 35% for stock of all cars).

This is to be achieved by improving the understanding of the fuel economy potential and providing guidelines and support on the development of policies to promote fuel efficient vehicles.

This brief explanation clearly introduces some complexity and uncertainty both for consumers when choosing a new vehicles, but also for policy makers when defining a set of measures to reduce CO2 emissions.  This complexity may generate confusion in the marketplace, which could affect the degree of  take-up and adoption by the market.

Mobility Patterns and New Trends

It is important to understand the different mobility needs and demands that EVs can help meet, and the alternative travel arrangements and performance they offer to households compared with conventional ICE cars. Putting aside for the moment any breakthroughs that will extend the range of BEVs, we should note that BEVs  offer a limited  range compared to conventional ICE cars, with no opportunity for ‘quick’ refuelling (except through battery exchange).

BEVs tend to be most appropriate for urban environments with short journey lengths.  This need not be a handicap provided consumers understand the difference between BEVs and conventional ICE vehicles, and the benefits BEVs can offer: zero tank to wheel emissions, affordable recharging costs, versatility in urban environments, etc. The point is that electric vehicles offer consumers a wider choice in identifying the vehicle that best meets their need. It is not the case then that one technology supersedes another one, but rather that different technologies help satisfy a wide range of demands. Therefore, the understanding that should drive policy is that what needs to be protected is the possibility for the market to meet a wide range of demands, through a workable mix of technologies. Meanwhile, the various hybrids on the market today – including plug-in hybrids - offer a range comparable to conventional ICE vehicles.

Alongside the diversity in demands for mobility, we also observe a number of shifts in the way consumers use the automobile. The current and foreseeable high battery costs associated with even a moderate range will continue to be a barrier to adoption of BEVs.  But this can be significantly mitigated if electric vehicles are made available through mechanisms such as car clubs and ‘car-to-go’ schemes, which can spread the ownership cost across a number of users, or indeed through  car sharing schemes and the increasing number of fleet and lease vehicles.

Observers – particularly of young people’s attitudes - are commenting on a perception change from the car as something that you have to ‘own’ to a mobility solution that can be ‘subscribed to’ or simply hired ‘instantly’.  We observe the same pattern in  bike-sharing programmes. It seems that EVs, as well as electric motorbikes or electric bicycles, may reinforce this new relationship between citizens and mobility. 

Evs sold in EU January-June 2011 figures