Consulting Firm: Slow Growth for Electric Cars

By · November 26, 2008

Electric cars have garnered a lot of media attention in recent months. Some consumers might get the impression that gas-free vehicles will be ready to take global roads by storm in the next year or two. But according to a new report from PricewaterhouseCoopers, production of all-electric vehicles will take another eight to 10 years before reaching the level of today’s hybrid cars—and that’s with significant government subsidies and incentives.

Speaking at the 2008 Los Angeles Auto Show last week, Carlos Ghosn, CEO of Nissan and Renault, promoted his company’s plans to become the leading mainstream manufacturer of electric cars. Ghosn predicted that there would be as many as 7 million pure electric vehicles being sold around the world by 2020. By contrast, the PWC “Analyst Report” published last week pinned the number of electric vehicles that could be produced (but not necessarily sold) at approximately 500,000 units in 2015—growing to 1 million by 2017 and 1.5 million by 2020.

In 2008, nearly 600,000 hybrid gas-electric cars will be sold worldwide. According to industry analysts, that number will exceed 1 million by 2010 or 2011.

The PWC report acknowledges that electricity is cheaper than existing automotive fuels, but identifies vehicle purchase price as the highest hurdle. The report warns, “Only when pilot programs encouraged at the state level become more widespread, will the full market potential for pure electric vehicles be unlocked for the next automotive generation, otherwise electric vehicles are destined to remain niche.”

Full performance batteries using lithium ion technology suitable for electric cars are expensive, ranging in cost between $9,000 and $13,000. PWC believes that the success of electric cars can be decoupled from government support only after battery technology reaches maturity.

PWC recommends that governments and automakers provide incentives and greater infrastructure—while automakers focus on extending driving range. Electric cars emerging in the market are expected to travel approximately 100 miles before requiring a recharge.

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