The research firm Frost & Sullivan is out with a new electric vehicle market report that demonstrates "huge progress" in the global market in recent years, and it adds an interesting twist: EV buyers are beginning to shift in favor of plug-in hybrids, which run on both gas and electricity to provide for longer range.
That's great news for EV manufacturers like General Motors, which has banked a lot of bucks on the gas-electric hybrid Chevy Volt. However, the growing preference for long-range EVs also underscores a somewhat disturbing trend occurring in the U.S.
Frost & Sullivan provides a handy summary in its press materials. And for those of you on the go, we'll boil it down to a few relevant details.
The report puts total EV sales at 304,683 in 2014, and estimates that number will reach 466,407 this year. Of particular interest is North America, which the report predicts will continue to lead at a 36 percent share.
The other two of the top three markets are Europe (27 percent) and China (24 percent).
"Although the EV market is growing in all regions, overall sales have not met the expectations of automakers. Automakers in Europe and North America have not managed to achieve sales targets mainly due to end users' reluctance to adopt new technologies, the long charging time for vehicles, and the lack of awareness on the benefits of EVs," the report's authors wrote.
The auto research firm Edmunds has taken note of the lag between aspiration and actuality in the U.S. electric vehicle market, and earlier this week it released findings that confirm the Frost & Sullivan report:
"Car buyers are trading in hybrid and electric cars for SUVs at a higher rate than ever before ... today's gas prices are drawing hybrid and EV owners toward gas-guzzling vehicles at a much more accelerated pace than in recent years," Edmunds reported.
According to Edmunds, total EV sales in the U.S. are sliding in tandem with the SUV trend:
"EVs and hybrids accounted for just 2.7 percent of all new car sales in the first quarter of 2015, down from 3.3 percent during that same period last year. The share of SUVs, meanwhile, has increased from 31.8 percent in Q1 2014 to 34.2 percent in Q1 2015."
That's also bad news for companies that are looking to burnish their green cred by investing in EV fleet vehicles -- and encouraging their employees to purchase EVs.
However, when you look at the big picture, the current trend seems more like a temporary glitch than the shape of things to come.
As far as range and costs go, new improvements in battery technology are already resulting in longer range and lower costs, and more advances are gradually working their way out of the laboratory. Gasoline prices will inevitably go on the uptick again, and when they do, EVs will be poised for a takeover.
Frost & Sullivan notes that expansion of public EV charging networks will add a strong element of convenience to the appeal of EVs. Also helping to give EVs a future edge on convenience is the fact that the gasoline retail market has been shifting into a model that involves larger, but far fewer, gas stations. Add home and workplace EV charging to the mix, and it's clear that fueling convenience will be a major factor in favor of future EV sales.
Hunger for big SUVs in the U.S. market and elsewhere translates into bigger batteries, and bigger costs, so you could be on safe ground assuming that the appeal of gasoline-powered SUVs will be rather clingy. However, some auto manufacturers -- notably Hyundai -- are beginning to address the SUV end of the market with EVs that run on fuel cells.
Though fuel cell technology is pricey now, fuel cells pack more power than conventional batteries, and they can propel larger vehicles over greater range. Just as the cost of EV batteries has been dropping, it's possible that fuel cell technology could achieve a cost-effective niche in the EV market of the future.
More to the point: In a classic case of good timing, the U.S. National Research council has just come out with a new report on how to overcome the barriers to EV adoption.
Sponsored by the Energy Department and required by a mandate from the U.S. Congress, the new EV report is aptly titled Overcoming Barriers to the Deployment of Plug-In Electric Vehicles. It identifies cost, battery technology and consumer education as three areas for improvement.
The report recommends a focus on expanding the EV charging network by streamlining local regulations, in order to speed up the permitting process for installing chargers at homes and workplaces.
Another recommendation is aimed at standardizing charging plugs and establishing a universal payment system for all charging systems. That won't elicit grins from our friends over at Tesla, which has been rapidly expanding its network of proprietary stations, but we're thinking that it's absolutely necessary for the EV market to grow. After all, when was the last time you pulled your gas-mobile into a gas station and couldn't get the pump nozzle to fit into your tank?
The report also eyeballs lowering the cost of EV charging by incentivizing off-peak use of charging stations.
Given the public benefit advantages of EVs in terms of greenhouse gas emissions, as well as local noise and air quality issues, the report makes the case for continuing government incentives for EV buyers in the form of tax credits and rebates, among others.
Image credit: Tina Casey
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.