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Where Will Electric Cars be in 2020?

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author photo by Autotrader November 2010

Electric cars are all the buzz now, but that could be attributed high-voltage propaganda, according to a new report from J.D. Power and Associates. The research group predicts that by 2020, sales of battery electric vehicles won't quite equal today's paltry hybrid electric vehicles' 2.2 percent market share. Combined sales of battery and hybrid electrics will total only 7.3 percent by that time.

What's the hold up? Price. Seems everyone is happy to jump on the electric green bandwagon in theory, but they balk when they are asked to actually pay for a lithium ion battery pack large enough to propel a car beyond the end of their street.

"Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably," reported John Humphrey, senior vice president of automotive operations at J.D. Power. "For example, among consumers who initially say they are interested in buying a hybrid vehicles, the number declines by some 50 percent when they learn of the extra $5,000, on average, it would cost to acquire the vehicle."

That higher price is even tougher for consumers to accept in the absence of a clear business case outlining the exact costs of ownership of electric cars compared to those powered by conventional internal combustion engines, as well as the cost of replacing battery packs when the time comes, the report said.

Interest in electric vehicles is significantly an artifact of the much-publicized "New Elite" demographic, says J.D. Power:

"It is clear from research in the world's largest automotive markets that buyers of hybrid and electric vehicles occupy a unique demographic niche. Buyers of HEVs and BEVs are generally older, more highly educated (possessing a post-graduate degree), high-income individuals who have a deep interest in technology or who like to be among the early adopters of any new technology product. As a result, it is not clear that HEVs and BEVs will appeal to the general population."

Some factors that could skew consumers' calculations of the value of electric vehicles would be a large increase in the price of gas, a large decrease in the cost of batteries or a large government subsidy for electric vehicles, the study notes. Another unpredictable factor is Chinese government policy. Because that country's government can arbitrarily dictate propulsion technology, fuel economy or emissions, it could move a very large vehicle market in the direction of EVs, which could have the effect of making such cars more competitive in the rest of the world.

The bottom line from Humphrey; "We don't anticipate a mass migration to green vehicles in the coming decade."

But global management consulting firm PRTM disagrees, predicting much higher EV sales by the end of the decade. "PRTM believes that it's not a matter of if – but how fast and to what extent – different electrified vehicles will be adopted as we approach an electrification tipping point," said Oliver Hazimeh, PRTM partner.

His company predicts hybrid sales will reach 20 percent of the market, plug-in hybrids will account for another 5-6 percent and battery electrics will account for 4-5 percent of vehicle sales.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Where Will Electric Cars be in 2020? - Autotrader