Bloomberg New Energy Finance forecasts plug-in electric vehicles could account for up to 9% of US auto sales in 2020 and 22% in 2030
02 November 2010
Plug-in electric vehicles, including plug-in hybrids and battery electric vehicles, have the potential to make up 9% of US auto sales in 2020 and 22% in 2030 (1.6 million and 4 million vehicle sales respectively), according to research company Bloomberg New Energy Finance (BNEF). However, achieving such growth level will be dependent on two key factors: aggressive reductions in battery costs and rising gasoline prices.
In the short term, price will be the most significant limitation to the uptake of both plug-in hybrid vehicles like the GM Volt and fully electric vehicles such as the Nissan Leaf, BNEF said. The median base price of autos sold between July 2009 and June 2010 in the US was $21,800. By comparison, the Nissan Leaf will cost $26,280 after federal subsidies (including an allowance for charger installation), which is a higher price point than three quarters of all new auto sales.
The BNEF forecast is based on first identifying the addressable market for plug-in vehicles—i.e., those consumer segments which can afford the vehicle, have suitable range requirements and have access to an appropriate location for charging.
The second step models the proportion of consumers within the addressable market that might actually purchase such a vehicle.
Bloomberg New Energy Finance estimates that in 2011, the GM Volt will be targeting an addressable market of 7% of total US auto sales, and the Nissan Leaf 11%. However, actual sales will be much lower and limited by vehicle availability.
The model also forecasts sensitivity to gas prices, which will have a considerable effect on uptake. Rises in electricity prices do not affect sales as severely, Bloomberg New Energy Finance concludes, as fuel costs are a lower proportion of the total cost of ownership for electric vehicles.
Once we’ve seen the launch of mainstream plug-in electric vehicles, we’ll have much more empirical data on consumer reactions, which will be vital in future forecasts.
—Glen Walker, lead transportation analyst at Bloomberg New Energy Finance
Last week, J.D. Power released a forecast projecting combined global sales of hybrid-electric vehicles (HEVs), plug-in hybrid-electric vehicles (PHEVs) and battery-electric vehicles (BEVs) will total 5.2 million units in 2020, or some 7.3% of the 70.9 million passenger vehicles forecasted to be sold worldwide by that year. (Earlier post.) Of those, J.D. Power projected 1.3 million would be battery-electric vehicles (about 1.8% of the market).
More bullish, PRTM estimates that by 2020 EVs will have a 4-5% adoption rate; plug in hybrid electric vehicles will be at 5-6%; and hybrid electric vehicles will reach 20%.
.. These 2020 EV forecasts vary from 2 to 20 percent of sales.
During the first 14 years, through mass production, the Model T price roughly halved every seven years (Wiki). With such a trend the 2025 gasless Leaf would be $8,195, besides the 2015/80% battery range improvement Nissan has already put in writing.
Suppose a Bush terrorist blew a key refinery or ship channel or - 70 virgins forbid - a Saudi king's favorite wife and gasoline prices tripled as OPEC did in late 1973.
At a US $9/gal, it might be ICE cars with 2 to 20 percent of sales.
Posted by: kelly | 02 November 2010 at 05:42 AM
The much faster growing Asian market may set future trend. If China + India, with a potential of about 40% of world sales by 2020-2025, go for electrified vehicles, the above forecast would not apply.
China has recently announced a 10-year electrified vehicles plan that could change current forecast. By 2020-25, China may be producing many times more electrified vehicles than USA.
By 2020-2025, South-Korea and Japan may produce more electrified vehicles than USA.
Nobody knows how many electrified vehicles India may be producing 10 to 15 years from today.
USA, being in a long term downward economic trend, could and probably will follow this lower growth for electrified vehicles.
Posted by: HarveyD | 02 November 2010 at 08:13 AM
kelly, agree (except not sure what a Bush terrorist is).
Don't forget about natural disaster disruptions, like hurricanes.
Remember how fast CD's replaced LP's? One day i went into a record store and they didn't sell albums any longer. In ten years we'll see a lot of change.
Posted by: danm | 02 November 2010 at 08:51 AM
This idea that china is going to go electric massively overnight is just ridiculous. And the reason is simple, battery are way too expensive and for quite some time...
Posted by: Treehugger | 02 November 2010 at 09:54 AM
Since 70% of oil is used for transportation, how will oil prices react with 10% market penetration of EVs? If demand for oil drops, prices may drop, reducing demand for EVs.
Posted by: Zhukova | 02 November 2010 at 10:17 AM
Tree... Spare lithium camera batteries cost $50+ 6 years go. Superior made in China replacement are selling at about $3.95 today. A 12:1 drop in price in 6 years is beyond imagination but it happened.
If the same price trend is applied to batteries for EVs, price would go down from $1000/Kwh to as low as $83/Kwh by 2016-17. Something around $100/Kwh by 2020 is not impossible. At that price, many people could be driving BEVs in China and India.
Don't forget that many people in China and India are getting richer while we are getting poorer. Their average yearly per capita revenue is going up at about 5% while ours is going down at about the same rate. By 2020-2025 the difference may be much smaller than we think.
Posted by: HarveyD | 02 November 2010 at 11:00 AM
danm, some say a Bush terrorist is one created when the US occupys their country for oil, profiteering, no-bid contracts, and unending war. Or, it's said a Bush terrorist is one helpful when any "Patriot Act" needs to be passed for eventual control of the huddled masses and WMDs.
Or it's even said that a Bush terrorist is one who successfully attacks America, like no other terrorist, before or since "The Decider".
In short, the Bush terrorist definition varies - kind of like the price of oil, global financial meltdown, and derailing oil alternatives.
Posted by: kelly | 02 November 2010 at 11:22 AM
With the major global innovators firmly founded in the West - this prediction is likely short sighted. At almost any moment disruptive technology could enter the picture and utterly decimate the oil industry.
Energy in ubiquitous throughout the universe.
That said, electrification of transport will be led by entrepreneurial enterprises like Tesla. Next comes GM with a brilliant serial hybrid Volt, and after that the Nissan Leaf. I would look for a Korean entry EV soon followed by a couple EU contenders. Asia and India's poor quality manufacturing will retard those products in the face of cheap ICE.
Oilcos will attempt to hold bbl to $80-90 which keeps petrol the favored fuel. But batteries cost less, and a factor that no study has adequately addressed - the convenience of plug-in energy - will play a larger role. Never having to buy gas again will become the status symbol of the Prius set.
Expect a State sponsored escalating gas tax once there are adequate PHEV alternatives. Automakers will see increasing sales of enviro/economy-friendly EVs as domestic "clean cars" replace crippling foreign fuel.
Hey, it's all VR!!
Posted by: Reel$$ | 02 November 2010 at 12:03 PM
Reel
BS, energy transition are never fast, after 20 years of its introduction wind only produce 1% of the electricity made in the word, battery industry has the worst record in matter of pace of technological progress of any industry. Li-ion technology is not the right technology to get battery density above 200Whrs/Kg as well as reducing the cost drastically, solutions might surely come but it will takes decades
Posted by: Treehugger | 02 November 2010 at 01:45 PM
"..the battery industry has the worst record in matter of pace of technological progress of any industry.." is a sad truth for a basically 3 component storage device.
Posted by: kelly | 02 November 2010 at 04:38 PM
I'm not so sure. The very first commercial LiIon batteries only came out at the start of the 1990s, and since then specific energy has risen from around 60 Wh/kg to 250 Wh/kg for the latest Panasonic cells.
When we switch to lithium-air, with 11,600 Wh/kg theoretical and maybe 3,000 Wh/kg practical energy density, then things will really change.
Posted by: clett | 03 November 2010 at 02:41 AM
Clett has a very good point. Too many failed to admit that lithium batteries performance has progressed at a rather fast pace in the last 20 years or so with a 400+ % gain in energy density. Applying the same rate of change would give a battery with 1000+ Wh/Kg energy density by 2030. Since the R & D tempo is picking up, the next 400% gain could be done in less than 20 years or even a lot less.
Wouldn't be surprised to see it done in less than 15 years and even by 2020.
With what happened yesterday, the new higher performance batteries may very come from Asia or EU.
Posted by: HarveyD | 03 November 2010 at 07:45 AM
“Plug-in electric vehicles, including plug-in hybrids and battery electric vehicles, have the potential to make up 9% of US auto sales in 2020 and 22% in 2030 (1.6 million and 4 million vehicle sales respectively), according to research company Bloomberg New Energy Finance (BNEF). However, achieving such growth level will be dependent on two key factors: aggressive reductions in battery costs and rising gasoline prices.”
I think they have the right idea for the wrong reasons. The cost of the battery is almost immaterial. EV and E-REVs are far simpler mechanically than ICEVs. They are nowhere near the scale of production of ICEVs yet. As production levels increase the cost of these vehicles will "drop radically". Go ahead and tell me they will continue to remain expensive. I’d like to file such a nay-sayer comment for later.
GM’s EV1 in 1980s: $300,000 Tesla’s Roadster in 2000’s $100,000 Nissan’s Leaf in 2010’s $30,000 GM’s Volt in 2010’s $40,000
Trend is MORE CHOICES, BETTER CAPABILITIES, and CHEAPER.
Please stop quoting $1,000/kWh. I doubt any manufacture is putting a Li-ion battery in their E-REV or EV with a cost close to this. It's preposterous to propose this when AA Li-ion batteries can cost less than $400/kWh and some prismatic Li-ion cells already cost less than $400/kWh. (No, I don't care what the DOE says.) The $1,000/kWh has to be coming from prototype or first item type production. Certainly, current technology can already deliver Li-ion batteries for EVs at less than $500/kWh when better competition is in place and production levels are sufficient.
Treehugger thinks he’s a critical optimist, but he’s really a nay-saying pessimist. Just ask yourself: Sales of what are increasing faster in China, fuel assisted or battery assisted bikes? Gasoline fuel is more expensive and less available than electricity. What is a three-wheeled bike with a roof against the rain and a plastic wind-shield? I say it’s a car in China. EV transport is not going to happen in China and India. It is already happening there. Look at the most likely cost trend for electricity from: coal, wind, nuclear, solar, hydro, waves, currents, natural gas, and geothermal. Lots of sources are going to bring reduced cost electricity. Solar in particular will continue to decline in cost this decade, see the price trend graph included here:
http://www.renewableenergyworld.com/rea/news/article/2010/08/test10 - August 2010
“Welcome to the Revolution: Emanuel Sachs and Frank van Mierlo”
The popular new ice cream flavor is “yes pecan”. Figure it out Oilhugger.
Posted by: mds | 06 November 2010 at 04:05 PM
Even with all the sales projections over the next 10 years, we will have about 1% of the cars behing HEV/PHEV/EV by 2020. That is NO where near enough to reduce OPEC oil imports, by that time we will be using 10% more oil than now.
The Open Fuel Standard can put 100 million true FFV cars on the road by 2020. They can run ethanol, gasoline or methanol and reduce OPEC imports significantly. Each car costs only $200 to make true FFV and has more options for the fuel it runs on. This is the best result for the money spent.
Posted by: SJC | 08 November 2010 at 10:33 AM
You are quite correct.
Using 2007 numbers from wikipedia:
71.9 million vehicles produced per year.
809 million vehicles on the road.
9% of 71.9 = 6.5 million. 100*(6.5/809) = 0.8%
...BUT there is not an either/or, one-size-fits-all, solution for the short term. Alternative fuels (as you point out), better HEVs, higher mpg ICEVs, and Natural Gas vehicles, will all be part of the picture along with EVs and E-REVs, particularly in the short term (next 10 to 20 years). We could cut corporate welfare subsidies to the well developed and already profitable fossil fuel industry and have enough money to support all of these without increasing taxes. (Maybe we could get rid of corporate welfare to other large businesses and financial speculators and banks while we're at it.)
Long term (20 to 30 years) EVs and maybe E-REVs are most likely to be the answer to limited fossil fuels and CO2. This is because they will cost less (fewer parts) and because solar-electricity is the most cost effective fuel you can grow on land. Further, PV requires no water and is best grown on rooftops and in the desert. It does not compete with our food supplies. The only likely alternative fuel competitor to EVs is algae. This is not ready for prime time yet and will also take time to scale. Even then it is difficult for me to see how it will compete with PV supplied EVs, given the cost reduction curves PV and EVs are both on.
One more point, part of the predictions above are overly conservative, imho. Do any of you really believe EVs and E-REVs will only have 22% by 2030 if 9% is achieved by 2020? No way, we’ll be past the point of “economic obviousness” to steal a phrase Travis Bradford used about PV. The 22% is a product of the human tendency toward linear thinking. The growth will be exponential and will reach something more on the order of 50% by 2030. This will mean 5% per year replacement rate and still increasing, not to mention the effect on the larger problem of new vehicles in China and India where this transition to electric will happen faster. It is my belief we’ve started into a fundamental technical and economic transition, a disruptive growth transition, for EVs, solar, and LED lights. They’re not independent and will each assist the other.
Posted by: mds | 09 November 2010 at 09:10 AM
Go all out on HEV/PHEV/EV the next 10 years. I can not see limiting FFVs in favor of electric so everyone has no other choice. For only $200 per new car we can have 100 million on the road by 2020. This allows the driver MORE options not less.
HEV/PHEV/EV will sell on their own merits. This is letting the market decide because they have more options, not less. We could say ban all gasoline cars to force everyone into electric, because that is THE vision. I do not think that would work very well at all.
Posted by: SJC | 15 November 2010 at 11:08 AM