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With virtually every major automaker launching a plug-in hybrid electric vehicle (PHEV) or all-electric vehicle (EV) within the next three years, questions abound as to whether these cars will be successful relative to the current generation of hybrid electric vehicles (HEVs) – to say nothing about how they will compare to vehicles driven by internal-combusion engines (ICEs)
The final judge will be consumers, who will be voting with their wallets – and electric vehicle enthusiasts might not like the returns, according to our recent report “Unplugging the Hype around Electric Vehicles (client registration required).”
In preparing the report, Lux Research analysts developed a demand-driven market model that calculates how fuel savings could counterbalance the higher price tags on electric vehicles. It includes projections for how the costs of these vehicles could fall as auto and battery manufacturers scale up production, and figures in the impact of oil prices using three scenarios in which oil reaches $70/bbl, $140/bbl, or $200/bbl through 2020.
All told, the report found that while global electric vehicle sales will total several million units annually under all scenarios, these sales will be never more than 7.8% of the total automotive market in 2020 at the oil prices modeled, and may be as low as 3.1%.
More specifically, the report finds that HEVs will be the only winner if oil prices hold steady at around $70/bbl. But regardless of oil prices, sales of these vehicles should reach roughly 3 million units annually by 2020. PHEVs, by contrast, will require oil prices to increase to $200/bbl to achieve a similar level of success, and EV sales will be a factor of ten smaller, even at that price.
