Who Will Lead the Electric Car Market?

zenn electric car

The outlook for the electric car couldn’t have looked brighter when oil was priced at $140 a barrel, consumer confidence was high, and offers of credit were plentiful. Now that a variety of electric vehicles are nearly ready to hit the market in larger quantities, the world is a different place. The leading manufacturers of the electric car and its ability to compete with evolving hybrid technology have yet to be determined.

Electric vehicle sales will surely benefit from higher fossil fuel costs and governmental incentives. A large upfront investment must be made to produce the volume of vehicles needed to reduce manufacturing costs and create a vehicle-charging infrastructure. Geography and culture will impact which countries can accept the smaller range of most electric vehicles and who can afford to purchase one.  Technology advancements will dictate the range of vehicles in the future and the speed at which they can charge.

tesla electric-carUnited States
Last winter, China surpassed the U.S. as the largest global market in car sales. The U.S. still remains the leading global market for hybrid vehicles and president Barack Obama has set a goal to have 1 million plug-in electric vehicles on U.S. roads by 2015. This is promoted by a federal tax credit of $7,500 for the purchase of plug-in electric vehicles.

Although the U.S. lags behind China and Japan in battery technology, President Obama wants the US to be at the forefront of electric vehicle production. “Even as our American automakers are undergoing a painful recalibration, they are retooling and reimagining themselves into an industry that can compete and win, because millions of jobs depend on it,” says Obama.

Obama’s vision is backed by $2 billion from the American Recovery and Reinvestment Act, with $1.5 billion earmarked for U.S. battery manufacturing. In addition, the Department of Energy is providing $400 million to create an electric vehicle infrastructure.  Despite lagging behind in hybrid technology, Ford and General Motors both have electric vehicles due to hit the market in the next 2 years.

europe electric carEurope
Due to higher gas prices, high environmental awareness, and a smaller average driving range, Europe seems like a natural fit for the electric car.  Efficient vehicles already dominate the market, yet hybrid vehicles were not efficient enough to woo many buyers.

The Israeli-American venture capital project, Better Place, is making Denmark an appealing place to market electric vehicles by creating 50,000 charging spots by 2011 using wind energy.  Denmark also has a tax policy that benefits electric cars, while England offers an incentive of $3,000 for the purchase of electric vehicles.

This represents the second largest hybrid vehicle market globally and the leading manufacturer of hybrid vehicles. If this is an indicator for the electric vehicle market, then the future looks promising. The next generation of hybrid cars however may present fierce competition for all-electric vehicles.

This is now the largest global auto market. A recent McKinsey & Co study predicts the Chinese electric vehicle market to be worth up to $220 billion by 2030.  The government is adding fuel to the fire by offering local governments and taxi fleets up to $8,800 in subsidies for every electric or hybrid vehicle.  Electric charging stations will soon be constructed in Beijing, Shanghai, and Tianjin.

Even if powered by electricity generated from coal, electric cars will decrease carbon emissions by 19% and reduce urban air pollution.  First time car owners comprise a whopping 80% of the market — perhaps they can more easily adapt to the smaller range of electric cars because many are accustomed to electric motorbikes and scooters.

To capture a large share of the U.S. and European market, Chinese automakers will have to meet rigorous safety standards and advance technologically.  “You have the battery, the motor. You need the control systems to make them work together. Control systems are very difficult. The Chinese makers really don’t have them,” says Yale Zhang, a Shanghai-based analyst for CSM Worldwide.

Electric vehicles however provide an opportunity for Chinese automakers to excel in an industry where they have long lagged behind.  The founder of BYD Company stated at an unveiling ceremony in Shenzhen, China, “The development of electric-powered vehicles is the best way for the Chinese auto industry to surpass other leading countries.”

Sarah Lozanova is a green copywriter and communications professional specializing in renewable energy and clean technology. She is a consultant for Sustainable Solutions Group and a regular contributor to environmental and energy publications and websites, including Mother Earth Living, Home Power, Earth911, and Green Builder. Her experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and she resides in Belfast Cohousing & Ecovillage in Midcoast Maine.

8 responses

    1. For profit is the capitalistic way which sadly does often leave ethics a concept theme. However an enormous industry such as the auto industry competing on the basis of environmental efficiency (granted because of multiple reasons ranging from profit to environmental laws) brings sustainable purchasing and living into more people’s lives. The key is keeping the public’s interested in these “flashy, new” sustainable products enough that the corporations continue to compete for consumers. The electric car is a great example of how a sustainable product is affecting the world market as demonstrated by Ms. Lozanova’s article.

    2. Profit will always be on the bottom line, that’s just the way the world works. The question is, can the bottom line be expanded to incorporate some long term thought, and can the government act sensibly to encourage the new technology.

  1. The comment about Denmark and BetterPlace is not correct. There has been no notable deployment of chargespots in Denmark 2011, nor is any of it connected to wind energy. Nice marketing campaigns though – lots of fresh air presentations, little substance in reality. Grotesque spending of money on hopeless battery swap technology. Who believes this sham?

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