Interacting EV market driver variables will include installed production capacity (currently about 0.5 million units/year); the availability of subsidies and incentives; the availability of an extensive and expensive recharging infrastructure and adequate energy supplies; the future cost of oil; and the cost of meeting transport emissions legislation through means other than EV production.

The report notes that the lead-in time for new automotive powertrain technologies is forecast to be about 20 years—supported by the slow advance of hybrids to date. There is also considerable inertia built into the car market due to the longevity of vehicles. Allowing for this, the report concludes, to effectively electrify the global car market by 2050—by which time the exhaustion of oil reserves may make electrification an urgent necessity—EV production would need to increase by an average 2 million units/year over 23 years.

The 30-million unit figure is considerably more conservative that some cited within the report, which Trend Tracker calls“apparently less forecasts than statements of intent or pious hope”.

We would argue that EVs represent such game-changing technology in respect of vehicle performance and price that any assumptions that capacity for substantially expanded EV production will be absorbed by markets in the same way as conventional vehicle capacity are liable to be unsafe.

Demand already supplied by EV manufacturers is from ‘early adopters’ and fleets, and the motivations and behaviour of these buyers are substantially different from the behaviours of the majority of new and used car buyers, in mature and emerging markets alike.

The evolution of demand cannot safely be mapped for products which are not yet available, products which do not match the criteria consumers apply to the products that EVs are intended to replace. The most reliable market drivers, then, will be production capacity, the subsidies available to incentivise consumers to purchase EVs, and the cost of oil, or emissions legislation, which may or may not prove persuasive. However, both these market drivers are essentially contingent on the willingness and ability of governments to use tax revenues to fund EV purchase incentives and associated infrastructure investments.

—“Electric Vehicles: Energy, infrastructure and the mobility market in the real world, 2011”

Without “decisive action”to implement ambitious fiscal and investment policies on a global scale to support a rapidly accelerated market penetration of electric cars, the great majority of cars in circulation by 2025, even 2050, will still be dependent on fossil fuels, according to the report. And without a major shift away from fossil fuels, transport’s absolute volume and share of greenhouse gas emissions will continue to rise as personal mobility increases in the growth markets in Asia.

The 242-page report comprises assessments of a number of aspects of the EV industry and market, including EV and alternative powertrain technologies; battery technologies; electric vehicles and power generation; recharging infrastructure; critical resources; market forecasts; fiscal policies and electrification; business models and strategic issues for electric mobility providers; and profiles of EV and battery manufacturers.

Challenges and issues discussed in this report include:

• To compete with advancing gasoline/diesel engines, EV traction batteries have to be much more than twice as energy dense as lithium-ion ever will be, at least three times cheaper, and last much longer before replacement.

• For EVs to take off, conventional cars have to become less and less attractive—but in fact they’re still getting better, cheaper to buy, and cheaper to run, thanks to the same emissions legislation that seeks to privilege EVs.

• Privately-owned EVs will need both standard voltage sockets for domestic, off-peak overnight recharging, and recharging points at work and other destinations and en route, where time and demand constraints may require access to fast-charging facilities. The report explores the potential of battery exchange as an alternative to multiple public EV recharging points as a case study of Better Place, with the conclusion that it is incompatible with present battery unit costs, and with competitive energy markets.

• Massive petroleum tax revenues need to be replaced if mobility goes electric.

• Without decisive implementation of effective fiscal and investment policies on a global scale, which few governments may consider affordable, private road transport’s absolute volume and share of greenhouse gas emissions will continue to rise.

• Smart grids and more storage will be essential to managing more intermittent renewable energy supply and extra power demand from EVs. Can EVs truly contribute to grid balancing?

• With radically reduced parts consumption and probable high depreciation, EVs represent a strategic threat to the standard automotive industry business model. Meanwhile, alternative new powertrain technologies are fragmenting vehicle production and markets.

Trend Tracker Ltd was formed in the UK in 2003 by experienced specialists as a company dedicated to providing accurate and informed automotive industry research. It undertakes bespoke client studies and publishes its own reports.