Plug-Ins Likely to Outpace Electric Vehicles Until 2015


fisker-karma.jpgIn advance of the Frankfurt Auto Show next week, details are leaking out about the plug-in hybrid and all-electric (or battery electric if you prefer) vehicles that will be showcased there. Automakers from Asia to Europe to North America are busy trying to outdo each other with promises of fuel efficiency and reduced emissions.

Hyundai, Mercedes, Fisker, Peugot and others will be in Germany, touting electric vehicles due to go on sale within the next few years. Most automakers are hedging their bets by promising both PHEVs and EVs at some point in the future.

But the hype around plug-ins so far has been greater than EVs for good reason — there will be a wider selection of models, and they are likely to sell in far greater quantities through the first half of the 2010′s than battery-electrics. PHEVs will sell because they will sufficiently address consumer expectations in the key areas of performance at a substantially reduced cost.

The key metrics for consumers considering shifting to electrified transportation are greatly reducing gasoline consumption as protection against price spikes, cutting CO2 emissions, and eliminating trips to the gas station. While EVs are better at all three of these, PHEVs should be good enough to make potential customers happy enough to make a purchase.

For example, Fisker says its Karma will meet the low emissions requirements of tough European cities such as London, and at 67 miles per gallon, it’s more than double the fuel economy of many of “fuel efficient” cars in its class.

According to a new Pike Research survey of more than 1,000 consumers, 82 percent of drivers travel less than 40 miles per day, which is about the projected range that many of the PHEVs can go before touching the gas tank. This would enable many consumers to refuel once a month or less, enabling them to claim “energy independence.”

Nearly half (48 percent) of all consumers polled were either very or extremely interested in PHEVs, which are superior to EVs in two “go-no-go” characteristics — driving range and (in most cases) cost. On average consumers were willing to pay about 12 percent more for a PHEV. (18 percent weren’t interested in a PHEV regardless of any price premium.)

Even with government incentives, the first PHEV models to arrive won’t likely to be close to that, so the initial two years will be limited to less price-sensitive early adopters. But the universe of people willing and able to pay $40,000-$50,000 for a much greener vehicle is larger than the number of people who can go to six figures for an all electric vehicle. Similarly, the sub 100-mile driving range of most EVs will limit it to being a secondary car for most consumers, at least until the charging infrastructure is in place.

But the preference for PHEVs will only last as long as the cost differential between the ICE/drive train and the larger battery packs remains significant. Once batteries that enable vehicles to travel 200 miles on a charge can be had for a few thousand dollars, then the advantages of having an ICE range extender dissolve.

That’s why Pike Research believes that 600,000 PHEVs will be sold in the U.S. between 2010-2015, while EVs will remain niche vehicles. But with sufficient improvements in battery technology and cost, the tables may quickly turn in the following years.

Appearing courtesy of Matter Network.

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  • Audit

    High cost of electric vehicles should essentially will decrease, when their mass production will be adjusted. I hope, we will live till that time when they will be an everyday occurrence on roads.

  • Edouard Stenger

    Interesting post, thanks John

    To me electric cars are the way to go. Of course there is still the question of range and cost. But one could be solved with mass transit – high speed rail – and the cost will go down thanks to economies of scale and scope. I am currently preparing two posts on EVs as I have a lot of data that finished to convince me… :)

    Hybrids are seating between to chairs and still need oil. Electric cars will benefit immensely from higher oil prices (sooner or later, a barrel will cost again $100. Perhaps as early as 2010)