In spite of Europe’s long tradition of promoting fuel efficiency and setting greenhouse gas emissions it is the US that is likely to lead the emergence of electric cars as a means of mass transportation, according to research by McKinsey and covered in a FT article. Indeed as Nissan and GM are about to launch their Leaf and Volt electric vehicles (EV) or in the case of the Volt a midway electric-hybrid, the US is already the largest market for hybrids. A report advises hybrid vehicle sales have doubled over four years to 3% of the US market. Nissan and Renault boss Carlos Ghosn predicted last year that by 2020, 10% of global car sales would be electric but not all agree. Daimler’s Dieter Zetsche, expects the figure to be more like 1-5% and Deloitte Consulting is equally pessimistic predicting the lack of range and home charging facilities for many potential consumers will result in just 3.1% of consumers switching by 2020.
Reported in the FT a somewhat more optimistic study published on Wednesday by JD Power predicted that global sales of electric and plug-in hybrid cars could reach 5.2m units in 2020, or 7.3% of an estimated 70.9m passenger vehicles. The research is based on surveying thousands of people in the US, Europe and China, resulting in the conclusion it will be a tough sell to convince large numbers of consumers to switch from conventional vehicles to electric and rechargeable hybrid petrol-electric cars because of issues surrounding their design, performance and price. Hybrid sales have been to a comparatively narrow niche of generally older, better-educated and wealthier buyers so to extrapolate the rise of hybrid sales to the potential EV market could be misleading. Would a young family living in the suburbs with school runs and a daily commute be willing to live with the lower range and higher purchase cost of an EV? Most think not, although expect a new excuse for arriving late to work in the years to come “the battery was flat! “Everybody thinks that everybody else should be driving an environmentally friendly vehicle, Dave Sargent, JD Power’s vice-president of global vehicle research is quoted as saying. “But when you talk to consumers about the actual economics of it, their altruism takes a nosedive very rapidly.
JD Power said barring significant changes to public policy, including tax incentives and higher fuel economy standards, “we don’t anticipate a mass migration to green vehicles in the coming decade. And therein lies the key. Sales could, and may, be skewed dramatically by changes to tax and/or emission standards. These will almost certainly play a role in more centralist Europe and over time the temptation to rig the market in the favor of electric vehicles may be hard for US lawmakers to resist when they are called upon to justify the billions of dollars of loans subsidies and incentives, and promises of thousands of green jobs made so far.