While the pure electric vehicle (EV) may still be an important part of the car market of the future, EV sales so far have been disappointing as I’ve noted in earlier posts here at the Birmingham Post. A recent report, by PwC in its ‘Autofacts’ series, confirms this trend. It notes that Europe’s electric car market still hasn’t taken off, but rather that hybrids are seen as likely to help auto makers meet tough new environmental regulations.
While pure EVs are still seen as too expensive by many, hybrid cars are viewed as better value for money by consumers, the report argues. However, neither powertrain form will be mounting much of an assault on the ongoing dominance of the internal combustion engine (ICE) in the near future, PwC reckons, at least in the short term.
PwC surveyed 1,500 people planning to buy a new car within the next year across Germany, Britain and France. Those who were thinking about having a pure (battery only) EV amounted to just 1% of those sampled, although this reached a more creditable 2% in France. (Incidentally, PwC’s figures tally with those in a recent report by IHI which stated that by 2020 electric cars will still account for under 1% of the total vehicle market).
As the PwC report notes, this is “echoed in (2014) new car registration statistics, where a collective 17,500 pure EVs were sold across all three markets out of a total of seven million vehicles sold – that’s 0.25 per cent of all new car registrations,” the report said.
The survey found that the price of EVs was much higher than conventionally powered ICE cars. In Germany, for example, prices of EVs start at around 35,000 euros, the report states, and compete in sectors where ICE powered cars cost somewhere in the range 10,000 to 30,000 euros.
Meanwhile, another report - entitled “Electric car sales pace, far from growing, is slowing” Automotive Industry Data (AID) – found that EV sales in Western Europe in August in the first eight months of 2014 EV sales were actually up to 35,228 from 20,052 in the same period of 2013. However, the growth of sales slowed during the year, according to AID (although more recent figures show a late spurt in EV sales in France).
Overall, EV market share in Western Europe in the first eight months was 0.44 per cent compared with 0.26 per cent in the same period of 2013. The figures include pure EVs like the Nissan Leaf, Renault Zoe, Tesla Model S and BMWi3 as well as extended range EVs such as the Chevrolet Volt. But these numbers were inflated by Norway’s figures, where a raft of policy measures has stimulated an EV market take-off. Without Norway, the market share figures for Western Europe fall to a disappointing 0.28 per cent according to AID.
And in the United States, consumers aren’t yet that switched on either. There, the market penetration of electric only vehicles in the first nine months of 2014 was just 0.35 per cent, according to AID.
Much more positively, the survey by PwC found that 21% of respondents stated that they would consider a petrol-electric hybrid. And sales this year in Germany, Britain and France for hybrids added up to 102,500 – that’s a small – but growing - 1.5 per cent market share. It’s this latter figure which for manufacturers PwC suggests “bodes well… in Europe, given the demanding CO2 emission targets in coming years.”
Those tough EU targets on emissions and economy will mean that manufacturers not only have to work hard to get make engines more fuel efficient and to reduce the weight of cars but also to sell a mix of pure EVs, plug-in hybrids and hybrids to meet fleet emissions targets.
Firms like Toyota have been backing the ‘right’ technology, it seems. By 2013 it sold over 150,000 hybrids in Europe, almost 20% of all the cars it sold across Europe. Partly that’s because the firm hasn’t invested heavily in diesels as these don’t sell well outside of Europe. Rather, it has preferred to develop hybrids that it can sell all over the world. So if you want a car with better fuel economy than a petrol-powered car, then if you buy a VW Golf or a Ford Focus you buy diesel, whereas if you buy a Toyota you buy a hybrid.
What recent reports do suggest is that conventionally powered ICE cars will dominate for years to come. The recent sharp fall in the oil price is also likely to suppress take up of pure EVs, at least in the short term.
Don’t write off EVs completely. Ratings agency Standard & Poors, in a recent report on electric cars, said that improvements in battery technology could yet see EVs take market share from conventionally powered cars over the next five years, in the US at least, as price falls and range grows.
But what the PwC report suggests is that European consumers currently prefer ICE cars that return good fuel economy, but not pure EVs. That suggests more mileage for hybrids in Europe in the near future at least.
So we may see different markets playing out in different ways. And of course China is expected to become a big market for battery-powered EVs over the next few years, as the government pushes EV adoption to help tackle air pollution problems, especially in major cities.
But as I’ve stressed before, at the moment everyone seems to be waiting for a ‘game changer’ in terms of a big breakthrough in battery technology which could see consumers switch over in a big way. Given the uncertainty over if and when this might happen, though, no one really yet knows how much this market will take off and how quickly.
Hybrids, meanwhile, are set to take a bigger share of the market. And when even a ‘petrol head’ like Jeremy Clarkson says that a hybrid sports car – the BMW i8 – is ‘magnificent’ and represents the future of driving, as he did on BBC’s Top Gear show, then it’s perhaps time to take note.
But in terms of the mass market, Toyota seems to have made the best ‘bet’ so far in investing in hybrid technology.
* Professor David Bailey works at the Aston Business School. He drives a pure electric car and a hybrid.
