PriceWaterhouseCoopers Projects Growth of Electric Car Market

Consulting firm projects potential sales of 500,000 units by 2015, though ways will have to be found to 'temper' battery costs.

Published: 30-Nov-2008

London -- Due to the progress of enabling technologies and a host of positive drivers, pure electric vehicles (PEVs) are garnering plenty of attention from manufacturers and suppliers. The auto sector is now attracting strong venture capital interest in nascent companies providing this technology. To make it into the mainstream globally, however, further technological and infrastructural barriers need to be overcome first.

Calum MacRae, automotive analyst, PricewaterhouseCoopers, said:

“Pure electric vehicles are not a new phenomenon in the auto industry. In the early 20th Century they were produced in greater numbers than internal combustion engine powered vehicles. Until recently, the lack of suitable battery technology has prevented manufacturers investing in them. While technological issues move closer to solutions, the lack of infrastructure for electric vehicles usage has stunted growth.”

There is no doubt that the current discussions around climate change are indicative of an ever increasing receptive business environment for electric vehicles. Advancing battery development in this area will however, compete with the industry’s already over-burdened R&D needs while current high battery costs dictate the level of consumer demand.

Calum MacRae, automotive analyst, PricewaterhouseCoopers, said

“While electricity is cheaper than existing automotive fuels, and running an electric car costs less, acquisition costs are the main hurdle. Incentivising, subsidising and promoting electric vehicles are all contributing factors to their success while letting the auto manufacturers concentrate on expanding their mobility.”

Further incentives such as those recently announced by the US government in the form of a maximum US$7,500 tax credit depending on the kWh capacity of the vehicle’s battery would help.

Battery costs vary significantly depending on the technology so tempering these costs will be crucial. The sustainability of electric vehicles is heavily dependent on the energy mix of a country’s electricity. Using non-renewable resources to generate electricity is unlikely to achieve net reductions in CO2 emissions.

PEV Forecast Scenarios
Assembly volume (k units)

Calum MacRae, automotive analyst, PricewaterhouseCoopers, said:

“Only when pilot programmes sponsored at state level become more widespread will the full market potential for electric cars be unlocked for the next auto generation.

 

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