Sales of Electric Vehicles to Approach 1 Million Units by 2010

Riding on a crest of growing environmental concerns as a result of deteriorating air quality and emphasis towards increased alternative fuel consumption to minimize heavy dependence on oil imports, the global market for electric vehicles is all set to cross the 963 thousand unit mark by 2010.

Published: 19-Jul-2007

San Jose, California (PRWEB) July 18, 2007 -- Worldwide www.strategyR.com/MCP-1045.asp [Electric Vehicles market is expected to cross 963.23 thousand vehicles by 2010, growing from an estimated 381.13 thousand vehicles in 2006. Major factors driving the market include growing environmental concerns as a result of deteriorating air quality, and emphasis towards increased alternative fuel consumption to minimize heavy dependence on oil imports. North America, Japan and Europe are expected to continue dominating the global electric vehicle market through 2010.

The global vehicle population has undergone profound growth over the past few decades. Global new car sales have grown close to 60 million units per annum. This upsurge in vehicle population during the twentieth century paved the foundation for several economical and environmental concerns. These predicaments have in turn compelled governments to impose regulations on emission levels and seek alternative fuel options. This led to the efforts to commercialize electric vehicles on a mass scale, though they have been in use since long. Today, charging up the demand for electric vehicles is the increasing concern for the environment, public health, national self-dependence for energy needs, and the non-sustainability of fossil fuels.

The global electric vehicle market is primarily driven by the Hybrid Electric Vehicles (HEVs) market sector. With almost all major vehicle manufacturers entering the HEV market, the sector is expected to surge ahead in the future. On the other hand, Battery Powered Electric Vehicles (BPEVs) market represents a slowly developing sector, plagued by several constraints. Fuel Cell Electric Vehicles (FCEVs) market, the third class of electric vehicles, are still in the prototype stages with a majority of manufacturers slated to commercialize their models during the next decade.

One major concern that both vehicle manufacturers as well as consumers need to grapple with is as to which EV type would be ultimately accepted in the market. The economic repercussions of a rapid transition to FCEVs would be drastic. Vehicle manufacturers would be compelled to write off investments in conventional vehicles as well as in HEVs to switch over to mass scale FCEV production. Refueling and maintenance infrastructures have to be established, leading to a chicken-and-the-egg scenario. Further, the total new vehicle demand might decline during 2010-2015 with customers deferring vehicle purchases until improved and lower priced FCEVs are available. This deferred demand is expected to pick up during 2025-2030. However, widespread acceptance of HEVs is not expected to disrupt the market significantly, as this would not be much of a technological discontinuity. Transition to any new vehicular technologies would primarily depend on the extent of governmental support. Initial high costs of these emerging technologies have to be met through subsidies in order to induce customers.

Industry predicts that the fuel-cell vehicles would be available in the market not before 2015. Before the fuel cell technology hits the market, vehicle buyers are provided with other link technologies to bridge the gap between the current and the future vehicles. The link technologies make the vehicle users familiar with the future hydrogen-powered fuel cell technology. Automakers have set their own paths for this purpose. The introduction of gas-electric hybrid technology can be seen as a solution to it. A segment of the automobile industry supports the re-devised internal combustion and CNG engines capable of using hydrogen fuel. But, in their attempt, the automakers have increased the complications for drivers with the introduction of new devices.

According to Ford, a supporter of hybrid technology, hydrogen-powered internal combustion engines would be same as the current conventional engines in terms of design and generate zero-emissions. Moreover, BMW, in a bid to gain market advantage, has already introduced a racecar using the technology. Honda too promotes hybrid technology to fill the gap, but considers CNG engines better than hydrogen combustion engines. General Motors has also been making investments in the development of hydrogen-powered internal combustion and electric hybrid technologies. These alternative-fuel vehicles, to be successful in the market, have to be offered at affordable prices and should deliver performance equivalent to that of the vehicles driven by gas.

Though demand for electric vehicles has been increasing, the product mix has also been rapidly changing over the past few years. Growth in hybrid electric vehicle demand has outpaced battery electric vehicle demand. One of the major factors delineating the widespread acceptance of HEVs is improved vehicle performance. HEVs enable in achieving near zero emission standards and at the same time provide comparable performance levels to internal combustion engines. The BPEV market is still plagued by limited range, long recharging time, and limited top speeds, despite rapid technological developments.

Major players covered in the report include AB Volvo Group, BMW AG, DaimlerChrysler AG, Fiat S.p.A, Ford Motor Company, General Motors Corporation, Honda Motor Co., Ltd., Hyundai Motor Company, Isuzu Motors Limited, Mazda Motor Corporation, Mitsubishi Motors Corporation, Nissan Motor Co., Ltd., PSA Peugeot Citro├źn S.A, Renault SA, Suzuki Motor Corporation, Toyota Motor Corporation and Volkswagen AG.

For more details about this research report, please visit www.strategyR.com/MCP-1045.asp.

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