By on April 2, 2011

One of the toughest challenges facing industry analysts right now involves determining what the market for electric vehicles actually looks like, what kind of volumes it will support and for how long. It’s a problem that I’ve hashed over at length with an old college buddy who now works at a cleantech investment firm, and let me be the first to say that it’s not an easy problem to pick apart. The number of unknown quantities and moving parts explains why opinions among money managers can vary so wildly even about relatively marginal firms like Tesla.

Luckily, Thilo Koslowski of Gartner Research [and celebrated coiner of the term "the trough of disappointment"] has dedicated himself more thoroughly to the problem, and has some startling findings to report. For example, despite the relentless pro-EV hype present in all levels of the media, Koslowski’s research shows that more consumers are actually considering buying a natural gas-powered vehicle. Looks like Edmunds’ Jeremy Anwyl was on to something when he called for an end to EV tax credits in favor of greater support for natural gas cars.

But even those raw consideration numbers don’t tell the whole story. Koslowski notes

EVs primarily face a market adoption problem, not an infrastructure challenge, to move from early adopters to mainstream buyers. The ideal EV does not exist yet in today’s automotive market and will likely require another technology generation before it arrives. Consumer sentiment regarding EVs is still positive, but is beginning to show areas of concerns for automotive manufacturers when compared to 2010. EVs must provide better cost-value ratios and convince consumers that no significant behavioral changes are needed before becoming a large-scale, consumer alternative for traditional internal-combustion engine (ICE) and hybrid powertrain technologies.

This is sobering news for even the “end-to-end” EV business model, as championed by Project Better Place. The infrastructure-based approach to EV marketing may help eliminate range and depreciation issues (which addresses the behavioral change issue), but the cost-value ratio that Koslowski highlights is still an issue for concern, thanks to high upfront costs. Not that Koslowski writes off infrastructure completely, saying

Infrastructure and service providers are likely the primary beneficiaries of the current EV evolution. Utility companies, in particular, have the opportunity to play a more dominant role in the emerging e-mobility future, because U.S. consumers prefer to have their utilities address their potential EV infrastructure needs.

But the research shows, the nascent EV market is extremely price sensitive. Though 21 percent of consumers say they are considering an EV (more than are considering a new diesel car), Koslowski’s data shows that

nearly one-third of U.S. drivers interested in EVs are not willing to pay a premium price for an electric car, and only 5 percent are willing to pay $10,000 more.

You hearing this Chrysler? As a result of this study,

Gartner maintains its 2009 prediction that in industrialized automotive markets, the number of battery-powered vehicles (plug-in full-electric and plug-in hybrid EVs) as a percentage of all vehicles sold using various types of propulsion technologies will range from 5 percent to 8 percent of all vehicle sales by 2020, and from 15 percent to 20 percent of all vehicle sales by 2030.

Which leads back to the lesson that we seem to be learning over and over again, namely that, a Koslowski puts it

EVs will become one of the design elements in addressing our future transportation needs. Future mobility concepts will consist of diverse powertrain choices and business models that will leverage technology to satisfy consumers’ transportation needs while challenging traditional car ownership

Also,

Governments will need to increase funding of consumer purchase programs in order to achieve substantial EV sales in the short term. If the goal is to reduce dependency on oil and address environmental issues, then governments must broaden their policies and funding to include other powertrain technologies that offer reduced energy consumption or consider encouraging the use of public transportation and alternative mobility solutions, such as car sharing.

In short, EVs are not a silver bullet. Koslowski seems to imply (though doesn’t explicitly say) that government investments in infrastructure could help in the long term, but he definitely seems to think Vs will need consumer-end subsidies in the short term. And this need for subsidies coming and going makes alternatives like hybrids and natural gas vehicles (not to mention public transportation and car sharing) more attractive.

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39 Comments on “A Dangerously Dispassionate Look At The EV Market...”


  • avatar

    All this “would consider” stuff is worthless, because people routinely lie to such question. Only actual sales matter.

  • avatar

    that 21% considering EVs sounds really suspicious to me. That’s probably nearly half of all people who consider themselves Democrats or to the left thereof. Now, if the poll methodology said that subjects were presented with some numbers–the cost of an EV and the savings on gasoline, I might believe such a figure. But it’s too easy to consider something when you don’t have much information.
    Of course, a major, permanent spike in gas prices, or a major improvement in battery tech that would make electrics as flexible as internal combustion would begin to make a huge difference, but until either happens, EVs are going to be a tiny niche.

    • 0 avatar
      aspade

      These are the same kinds of polls which said 40 million people were definitely going to participate in cash for clunkers and another 30 million would consider it.  And 70% of car buyers want a 60 mpg CAFE standard while 1% of them actually buy the 50 mpg cars offered now.  And 80% of Americans want to balance the budget and cut spending as a general principle while 80% also oppose every specific step towards that end.
       
      All symptoms of the same problem, which is that the public is a carefully cultivated moron.

  • avatar
    Jerome10

    Yeah, but the government has already decided for us that electric cars are where we’re gonna go.
     
    I’ll say it again, I find it really really ridiculous that there is this massive EV push, with insane tax credits (don’t get me started), while diesel is available RIGHT NOW, and natural gas vehicles also likely require far less infrastructure investment and are far less complicated.
     
     

    • 0 avatar

      Diesel doesn’t REALLY pollute less, and isn’t REALLY more efficient.
       
      Really, diesel is just more gas. Gasoline. Still the same thing. And what’s your problem with tax credits?

    • 0 avatar

      Probably the biggest reason that the government doesn’t go for diesels is because statistics of today indicate most people dislike diesels even more than EVs, for whatever reason.
       
      (This chart shows that dislike specifically.)
       
      Right now, it seems like the government is less about “using less fuel” then “creating less pollution.” CO2 emissions are the big thing right now. And even though diesel produces less CO2 than gas, it’s still more expensive than gas, both in engines and in fuel costs, and can’t produce that magic zero emissions number that everybody gets orgasmic about.

    • 0 avatar
      MikeAR

      Cole, my problem with tax credits is that I don’t want to pay for your car. I don’t ask you to pay for mine, you owe me the same consideration. Also basing investments or purchases based on tax credits distorts the marketplace.

    • 0 avatar
      charly

      Problem with diesel is that it saves oil, but not a lot. Adding a $2 tax on gasoline would save more oil.
      NG has an infrastructure problem. Whole areas of the US don’t have it and it is to costly to build it for fuelling cars. It also don’t need infancy support because all the technology for it is tried and tested which makes subsidies a harder sell. It also increases home heating bills which makes increasing the gas tax look political easy.

  • avatar
    Syke

    Looking at that chart, the point I find most interesting is the 2% who absolutely will not consider a gasoline powered automobile. These would be the truly fist-in-the-air, die-hard environmentalist types. Now, is that a good guess as to the percentage of those in the general population? If so, then it means that 2% of the country is determined to tell the other 98% how we’re going to live.

    • 0 avatar

      You seem to assume that that two percent is looking to get an EV or bike, will absolutely not consider any car that uses fossil fuels, and is militant simply because they choose to not drive a gas-powered-only automobile, and won’t consider one at all.
       
      The 2% is an interesting group. I would like to see what that 2% had to say about the other technologies shown on the page. Does that group want to tell the other 98% to buy something more along the lines of hybrids, or EVs, or diesels, or something else entirely?

    • 0 avatar
      CJinSD

      This comment makes you a member of the .2% of the population that actually possesses ‘common’ sense.

    • 0 avatar
      Chicago Dude

      If so, then it means that 2% of the country is determined to tell the other 98% how we’re going to live.
      First of all, this is a survey that probably has a margin of error greater than 2%.  Second, the number of US residents that live in urban areas where there is absolutely no need to own a car regardless of its method of motivation is far, far greater than 2%.
      While it’s always fun to set up straw men, especially socialist straw men, perhaps the truth is that there is some small percentage of the population that is not interested in buying a car.
      In New York City – which is, you know, the biggest city in the US (and has more than 2% of the US population all by itself) – if you gave a person a free car it would cost them upwards of $400 per month just to park it, insure it, and put plates on it.  That buys a LOT of taxi rides.

  • avatar
    zeus01

    “Looking at that chart, the point I find most interesting is the 2% who absolutely will not consider a gasoline powered automobile. These would be the truly fist-in-the-air, die-hard environmentalist types. Now, is that a good guess as to the percentage of those in the general population? If so, then it means that 2% of the country is determined to tell the other 98% how we’re going to live.”

    In that case they will have out-smarted themselves. Most of those in this ultra-left flake category are socialists to the core, and their primary motivation isn’t saving the environment but rather, envy and an extreme hatred of anyone who appears to be more financially well-off than them.

    These losers would rather we all rode bicycles (they also hate fat folks, short guys, flat-chested girls and anyone with the gall to be “ugly”) or at the very least drove around in the same minimalist electric padded cells that they would be forced to own. Misery loves company.

    But as the Tesla Roadster has already proven, there IS such a thing as an all-electric status-mobile. I call already hear their shrieks and outrage: “How can we keep up with the Joneses if they won’t stand still???”

    I both feel sorry for these morons and hate them at the same time. I want to hug them— shortly after I’ve killed them…

    • 0 avatar
      CJinSD

      http://motors.shop.ebay.com/Cars-Trucks-/6001/i.html?_nkw=Tesla&_catref=1&_fln=1&_trksid=p4506.c0.m282

      Many Tesla types quickly see the error in thier ways. There is always a good selection of Tesla roadsters on ebay with less miles than would require an oil change for a real car, looking for buyers with conceded depreciation varying between $5 and $30 a mile.

    • 0 avatar
      Ubermensch

      Maybe those 2% would only consider a diesel, or maybe they don’t drive because they can’t (blind)?  Of course when someone has an axe to grind then subtleties like these don’t exist in their worldview.

    • 0 avatar
      Wheatridger

      So what would you say to an environmentalist who drives a turbodiesel. “Die, Lefty, ’cause you’re not just like me!” What a lonely world you must live in, or aspire to. Oh, and I dislike electric cars, too. Some of us think for ourselves, dittoheads. Try it, you might like it.

  • avatar
    savuporo

    >> a major improvement in battery tech that would make electrics as flexible as internal combustion
    People keep missing the fact that fast chargers exist, today, and do not require any “breakthroughs” in battery tech. Just a very high powered charger.
    I.e. its an infrastructure problem, not a technology problem.

    • 0 avatar
      MikeAR

      Can a fast charger charge an EV battery in about the same time as it takes to fill up your tank with gas? If not then it is of no practical use and neither is any EV on the market. Until that happens they are all toys.

    • 0 avatar
      psarhjinian

      I wouldn’t say they’re toys.  They’re in their infancy, and there’s a lot of issues yet to be sorted, but there’s potential for EVs to solve problems and work in niches that petroleum-powered cars aren’t suited for.  Note that EVs are making inroads in areas where small IC engines (or very long cords!) were the norm only a few years ago.
       
      A big step, I think, will be when battery swapping becomes an accepted reality.  All of our warehouses are equipped with electric forklifts and we manage the charge issue with a fast battery swap and charger that can fill those packs in less time than it takes the lifts to exhaust them.  There’s no reason, other than manufacturer reticence and issues of packaging/design, that packs couldn’t be universal. And you can swap a battery in the time it takes to fill a tank.
       

    • 0 avatar
      savuporo

      >>Can a fast charger charge an EV battery in about the same time as it takes to fill up your tank with gas?

      Yes.

      http://www.chademo.com/ reports that over 600 of such stations are now deployed, mostly in Japan.

      http://www.theevproject.com/ is looking to bring the infrastructure to US as well.

    • 0 avatar
      MikeAR

      Savapuro, I took a short look at the first link. Impressive except for one thing. They don’t say anything about how long their so-called fast charge will take. If it’s more than 5-10 minutes then it’s not fast enough. My standard is the time it will take to fill my tank, anything longer than that is too long. And there is another issue with fast charges, won’t they shorten battery life if overused?

      Psar, you’re right, there are plenty of applications like in warehouse where electric is probably the best solution or at least as good as the others.

    • 0 avatar
      savuporo

      “How  long” depends on the size of the battery, CHAdeMO charger allows up to 62KW charge. SAE is looking at J1772 followup standard that would allow up to 120KW and perhaps even higher.

      LFP batteries are capable of < 10 mins charge to 80% SoC.

      i-MiEV can be charged up to 80% SoC in 20 minutes on CHAdeMO chargers, see http://www.popularmechanics.com/cars/reviews/hybrid-electric/2011-mitsubishi-i-miev-test-drive

      Another report : http://www.roadandtrack.com/auto-news/tech/mitsubishi-i-miev-quick-charges-through-california

      The tech is here, and mind you, this is only the very first generation of it.

  • avatar

    OK, I’m making at least one more comment on this.
     
    I’m a sustainability studies minor at a major university (major architecture, I’m not a complete failure). Anyway, this thread has reminded me of the people in sustainability studies, because I think it gets to something very interesting (and perhaps even encouraging) about cars.
     
    Namely, even sustainability studies people don’t agree on the right alternative fuel to gas.
     
    I remember one guy giving our class a demonstration on his waste-vegetable-oil powered Mercedes Benz (one of the old ones). He stated, quite emphatically, that he believed that “if everybody drove waste vegetable oil powered cars, I think we could solve the problem.”
     
    Then, for another event, I was asked to help out, and drove with a teacher to this … well, yoga place or whatever where she got tables for the event, and she was commenting on how great her Prius is, and she told me how, if everyone in America got a hybrid, that we could get very far in solving the problem. I’ve heard this one many times, from many different people.
     
    Haven’t heard anybody in the class talk about CNG or EVs yet, but I figure it’s only a matter of time. As they go to buy the first EVs, I expect to hear a lot of chatter about how great their new Leaf is (I doubt many of these people would buy American.)
     
    Anyway, I think that’s encouraging. It means that there’s a variety of opinions on the situation, and a plethora of possibilities. What it also means is that there’s a future for gasoline-powered autos, as part of a much bigger picture with many options for everyone.
     
    If you’re a hardcore greenie, like some of the people I just mentioned, go right ahead and buy an EV or whatever and power it using the solar panels on your roof.
     
    If you want more HP and torque, go for diesel, or even biodiesel or WVO for the more “environmentalist” out there.
     
    CNG already powers Albuquerque buses, and I figure it’ll work for a lot of people so long as they have a relatively flat commute.
     
    If you want your V8, own a vintage car, that’s fine too.
     
    See, the thing is, if we used a variety of fuel sources, we wouldn’t have to worry about overloading the power grid, running out of gasoline or diesel or CNG, and, most important, if any of those actually did run out manufacturers could simply switch their production to another. A variety of fuel sources mean that we don’t get tied to any particular one.
     
    I think that this chart shows a growing interest in all kinds of fuel sources and just as the author says EVs aren’t the only way to go. I think realistically, everybody, including greenies, intuitively understand this.

  • avatar
    chaparral

    Or they could be the happy 2% that have already converted to natural-gas, or run all diesels.

    NG at your home tap is 70 cents per 115000 BTU.

    • 0 avatar

      True, but the appliance to be able to take your low pressure NG and fill a pressurized tank with it costs about $4K. Don’t get me wrong, I’m a big fan of using CNG for transportation purposes but there are, as with any fuel, drawbacks. You can often find low mileage dual fuel cars and trucks that have been owned by gov’t agencies.

  • avatar
    frozenman

    I still think that the greatest immediate potential for EV use is in the commercial sector. When you are strictly using full EV as a tool to get a job done, and fluctuating fuel costs can be mitigated, they can make a lot of sense going forward. Increasing range and durability that comes from commercial use should make EV for personal use more viable as time goes on.

  • avatar
    joe_thousandaire

    Most of the new power plants being built run on natural gas, so you can take that gas convert it into electricity transfer it hundreds of miles then spend hours and hours charging up your EV, or you can cut out the middle-man and just hook your car right up to the gas, which most people already have at their homes. Its a no-brainer really. I just can’t see the logic behind EV’s, but it seems some people have an enormous emotional attachment to the idea of the electric car – I don’t get it.

  • avatar

    First…Start at the beginning. This is a survey of US “Consumers”. I take that to mean NO commercial use. And probably half the light vehicles on the roads are considered commercial. There is NO one, right solution. ALL are needed. There are so many different needs, drivers and distances involved that its crazed to apply some kind of vague democratic ouiga-board to it.

    One thing is certain…by and large, we all have too many pistons for our needs and with crude expected to get to $150 soon, it would be a good idea not to be bitten yet again by our lack of policy and flexibility. 

  • avatar
    grzydj

    Once a buff book who whomever tests a fully charged Leaf or some other full EV at night, in a blizzard running all the necessary accessories you would need to stay safe in such conditions, I’m sure EV consideration will go even lower in the parts of the US where half the year is out of said vehicles “optimal” range conditions.
     
    Motor Trend has already noted how poorly the Leaf performs in colder temperatures.
     
    http://www.motortrend.com/roadtests/alternative/1103_2011_nissan_leaf_vs_2011_chevrolet_volt/index.html

  • avatar
    ExPatBrit

    That motortrend test reminds me of that scene from Apollo 13 where they are trying to reduce power to a minimum, to save the batteries.
    The hype around EV’s seems similar to the so-called latest smartphones. Sure you can be connected all the time but good luck staying connected for more than a day with all the apps running.
    Just like the leaf it becomes a balancing act about what you need than what you want. Turn off everything except the phone part until you can make it to a charger.
     
     
     

    • 0 avatar
      psarhjinian

      For the record, under “normal” use, most smartphones will go a day quite easily.  You could, of course, double the size of the battery and get double the runtime, but then you’d have a very thick smartphone, and few people will use their phone like that.
       
      For those people who do (look at their screen nonstop for hours) there are tablets that do allow non-stop computing for a day.
       
      It’s all about compromise: you could equip EVs with more battery, but why do so when most people aren’t going to use it, and doing so only to alleviate range anxiety would be a detriment to performance and handling
       
       
       

  • avatar
    zeus01

    So what would you say to an environmentalist who drives a turbodiesel. “Die, Lefty, ’cause you’re not just like me!” What a lonely world you must live in, or aspire to. Oh, and I dislike electric cars, too. Some of us think for ourselves, dittoheads. Try it, you might like it.

    You didn’t indicate who this rebuttal was directed at, but I can only assume it was me and my anti-socialist rant. So I’ll try to answer your very polite and courteous questions/ jabs as best I can:

    If you’re an environmentalist who respects the rights of others to not follow your example (ie: if you’re not an enviro-NAZI) and you drive a turbodiesel, all the power to you. Especially if you’ve paid for it yourself with money you earned in an honest and ethical fashion. That’s what free enterprise is all about. But if you ARE the proverbial enviro-nazi who’s hell-bent on forcing others to “go green”, and your turbo-diesel gets less than 25 miles per gallon, you would then fall into the category of dictatorial hypocrate. I’m sure this is not you though, right? Uh… right?

    As for your next point, Lonely? Moi?? Let’s see now: I’m middle-aged, not rich, not tall, not particularly attractive (in spite of my wife’s opinion) and vote (gasp!) conservative. (And I drive a lowly Honda Fit, albeit a new one that I paid cash for). You’ve seen pics of Elizabeth Hurley, right? British supermodel, brunette, piercing blue eyes and beautiful beyond comprehension? Well, she’s almost as gorgeous as my wife, who is an ultra-monogamous nymphomaniac insomniac who detests enviro-nazis even more than I do. Gobs of wisdom, common sense and IQ as well. So no, lonely would not apply here, so don’t worry about me. Thanks for asking though.

    Your next point: We’ll just have to agree to disagree on the electric car issue. I like them, but I’d like to see the range increase and infrastructure to support them in place before buying one. That’s me, just thinking for myself as usual. My above-mentioned bride would never have married an idiot.

    Finally: “dittoheads”?? Oh, come ON! I’m SO disappointed in you! Surely a well-spoken soul like you can come up with something a little more… cerebral than that. Sounds like a seventh-grade euphism. Thanks for coming out though. Cheers.

    • 0 avatar
      Wheatridger

      My TDI has averaged 40 mpg so far this year, so yes, I walk my talk. And I’m not interested in forcing you to do anything, but I’d love to see you and others pay closer to a fair market rate for oil and its products, making sure the myriad external costs (military, environmental, political) are factored in. Absent true-cost oil prices, I’d like to see high-MPG cars incentivized with tax breaks to equal the huge Hummer subsidy given during the Bush years. Vehicles above 6000 pounds were granted full first-yerar depreciation, laying a huge wad of cash on those useless dinosaurs.

      We’ll never agree on politics, but I may surprise you when I declare that government regulations have gone too far down the wrong path in the auto business. Safety and MPG regs are shaping auto design past the point of reasonable streamlining, giving us a fleet of workaday sedans with race-car-poor visibility. I’d rather gain economy by adding lightness and using smaller, smarter engines, but that doesn’t sell cars as well as boy-racer profiles.

      Meanwhile new rear-impact standards have pushed new cars’ headrests ever forward, to the point that I can’t find a comfortable driving position without hunching into a fetal position. At the new car show yesterday, I found only three models I could get comfortable in, and I already own two of them!
      That’s my rant, join in if you want.

  • avatar
    zeus01

    “We’ll never agree on politics…”

    Maybe not as far as the socialism vs. Capitalism ideology is concerned. But (surpisingly) there is much to agree with in your latest post. And here in Canada we are paying closer to market value for our auto fuel: about $1.26 per liter (around $5 per U.S gallon) for our gasoline, around a third of which is tax. Diesel is now actually a few cents MORE per liter, even though it costs much less to produce than gasoline.

    This has had an effect on the sales of gas guzzlers here in the last four years and as for me, I’ve mostly over the last 30 years owned economy cars— not because I couldn’t afford to put gas in an SUV but rather, by choice. They’re more fun to drive, available with a manual transmission and more maneuverable. On those rare ocasions that I need a truck I rent one for the day.

     I too would like to see viable incentives to buying economy cars, hybrids and (eventually) electrics. Building them lighter and less powerful (to end up with acceptable performance via better power-to-weight ratio rather than simply adding more horses) would be a much more effective way of reducing our dependence on oil. But to a degree this is already being done as best as technology can accomplish while still keeping cars affordable to the average Joe.

    And as for those too-far-forward “active” head rests? I hate ‘em too. In an accident they may reduce injuries. But my chiropractor would probably tell you that the forward posture of the human neck would ultimately cause chronic back spasms, long-term damage and loss of both productivity and enjoyment of life.  

    • 0 avatar
      Wheatridger

      That’s the darkest secret of most modern cars, IMHO– headrests that may work with crash dummies, but don’t respect regular human postures.

      Yesterday I test-sat a couple dozen cars at the Denver auto show, and I’d have to alter almost every headrest to achieve a comfortable driving stance. That can usually be done by removing the upholstery and carving the foam with a hot knife. Risky? Maybe, but not as daft as the advice of a VW salesman to simply turn the headrests around backwards. That would give about five inches of space behind the head, far too much for protection against whiplash. And the shape of the backwards headrests would be like a wood-splitting wedge aimed at my neck, if the worst were to happen.
       
      I have my own survival stash of old, pre-’08 VW headrests put away for future use. Do you?
       
      Fortunately, the implementation of these regs seems inconsistent. The best seat & headrest combo at the show was in the Subaru Forester, but one of the very the worst was in the Outback– go figure!


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