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J.D. Power forecasts hybrid- and battery-electric vehicles will represent 7.3% of global auto sales in 2020

28 October 2010

Jdpower2
J.D. Power forecast of hybrid-, plug-in hybrid- and battery-electric vehicle global sales through 2020. Click to enlarge.

A new report from J.D. Power and Associates estimates combined global sales of hybrid-electric vehicles (HEVs), plug-in hybrid-electric vehicles (PHEVs) and battery-electric vehicles (BEVs) will total 5.2 million units in 2020, or some 7.3% of the 70.9 million passenger vehicles forecasted to be sold worldwide by that year. Global HEV, PHEV and BEV sales in 2010 are forecasted to total 954,500 vehicles, or 2.2% of the 44.7 million vehicles projected to be sold through the end of 2010.

The report, titled “Drive Green 2020: More Hope than Reality” considers various factors affecting the future potential for “green” vehicles in the world’s largest automotive markets. These factors include market trends, regulatory environment, consumer sentiment and technology development in these markets.

Interest in HEVs and BEVs is driven by a dramatic reduction in or elimination of tailpipe emissions, and the increased fuel economy of these vehicle types helps reduce the world’s dependence on oil. The drawback to these technologies is that fossil fuels (principally oil and coal) are still used to produce the electricity that powers these vehicles, thereby eliminating some of the potential gains. Therefore, it is not clear whether there would be a substantial reduction in emissions by switching to these new powertrain technologies. In addition to questions about dependence on oil and reduction in emissions, battery packs are prohibitively expensive to manufacture on a large scale, and the disposal of depleted battery packs presents yet another environmental challenge. Perhaps most importantly, there are major hurdles that must be overcome regarding battery-based vehicles to ensure consumer acceptance.

—“Drive Green 2020: More Hope than Reality”

According to the report, it will be difficult to convince large numbers of consumers to switch from conventionally powered passenger vehicles to HEVs and BEVs. A consumer migration to alternative powertrain technologies will most likely require either one of the following scenarios, or some combination of these scenarios:

  • A significant increase in the global price of petroleum-based fuels by 2020;
  • A substantial breakthrough in green technologies that would reduce costs and improve consumer confidence; and/or
  • A coordinated government policy to encourage consumers to purchase these vehicles.

Based on currently available information, J.D. Power concluded that none of these scenarios are likely during the next 10 years.

While considerable interest exists among governments, media and environmentalists in promoting HEVs and BEVs, consumers will ultimately decide whether these vehicles are commercially successful or not. Based on our research of consumer attitudes toward these technologies—and barring significant changes to public policy, including tax incentives and higher fuel economy standards—we don’t anticipate a mass migration to green vehicles in the coming decade.

—John Humphrey, senior vice president of automotive operations at J.D. Power and Associates

A different take
Oliver Hazimeh, partner and head of the global e-Mobility practice at PRTM, a global management consulting firm, has a different perspective on the prospects for electrified transportation.
PRTM believes that it’s not a matter of if—but how fast and to what extent—different electrified vehicles will be adopted as we approach an electrification tipping point.
PRTM estimates that there are different degrees of electrification with different penetration rates, i.e. by 2020 PRTM estimates that EVs will have a 4-5% adoption rate; plug in hybrid electric vehicles will be at 5-6%; and hybrid electric vehicles will reach 20%.

Breakdown of Global HEV and BEV Sales by 2020. Of the 5.2 million HEVs, PHEVs and BEVs forecasted to be sold worldwide in 2020, some 3.9 million units (about 5.5% of the market) are expected to be HEVs and PHEVs according to the J.D. Power and Associates global forecast numbers for the third-quarter of 2010. The leading markets are the United States (1.7 million units), Europe (977,000 units), and Japan (875,000 units). China is expected to sell fewer than 100,000 HEVs in 2020.

Of the 1.3 million BEVs projected to be sold worldwide in 2020 (about 1.8% of the market), sales in Europe will account for 742,000 units; sales in China will account for 332,000 units; and the United States and Japan should each account for sales of approximately 100,000 BEVs in 2020.

Jdpower
Consumer interest in alternative powertrains, pre- and post introduction of price premium. Click to enlarge.

Consumers. While consumers have a variety of concerns about HEVs and BEVs, J.D. Power said, more important are the personal financial implications of deciding to purchase an alternative-energy vehicle. While many consumers around the world say they are interested in HEVs and BEVs for the expected fuel savings and positive environmental impact they provide, their interest declines significantly when they learn of the price premium that comes with purchasing these vehicles.

While most consumers say they want to create a smaller personal carbon footprint, research shows this consideration carries relatively low weight in the vehicle purchase decision.

—“Drive Green 2020: More Hope than Reality”

The overall cost of ownership of HEVs and BEVs over the life of the vehicle is also not entirely clear to consumers, and there is still much confusion about how long one would have to own such a vehicle to realize cost savings on fuel, compared with a vehicle powered by a conventional internal combustion engine (ICE). The resale value of HEVs and BEVs, as well as the cost of replacing depleted battery packs, are other financial considerations that weigh heavily on consumers’ minds.

Finally, the report says, it is clear from research in the world’s largest automotive markets that buyers of hybrid and electric vehicles occupy a unique demographic niche. Buyers of HEVs and BEVs are generally older, more highly educated (possessing a postgraduate degree), high-income individuals who have a deep interest in technology, or who like to be among the early adopters of any new technology product. As a result, it is not clear that HEVs and BEVs will appeal to the general population.

Government Regulations. While the governments of the world’s largest automotive-producing nations have schedules in place for improving fuel economy and reducing exhaust emissions, there is little consensus about the timing or manner in which these objectives are to be achieved. Some governments are promoting HEVs, others are focusing on BEVs, and still others are considering additional options.

According to Humphrey, the lack of consistency in regulations across markets is causing global automakers to hedge their options by seeking alliances and technology-sharing agreements. The heavy fixed costs associated with developing multiple powertrain options simultaneously are prohibitively expensive. When combined with the projected lower sales volumes of these products, collaboration between auto companies is almost a necessity to control costs and remain competitive.

One unpredictable aspect of the 2020 outlook is how markets would be affected if more stringent and consistent legislation is adopted that supports specific technologies. In particular, China has the ability to move quickly, invest heavily in the development of one specific propulsion technology, and mandate fuel economy or emissions standards that could favor a particular technology or require a minimum sales penetration level for vehicles with a designated technology. Given the size and growth rate of the Chinese auto market, such a coordinated regulatory environment might allow Chinese companies to achieve economies of scale and drive down the cost of alternative-energy vehicles.

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October 28, 2010 in Electric (Battery), Forecasts, Hybrids, Market Background, Plug-ins | Permalink | Comments (39) | TrackBack (0)

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The drawback to these technologies is that fossil fuels (principally oil and coal) are still used to produce the electricity that powers these vehicles

That should read: natural gas and coal. There are very few powerplants still running on oil these days.

battery packs are prohibitively expensive to manufacture on a large scale, and the disposal of depleted battery packs presents yet another environmental challenge

As it is worded, it seems like they are saying that batteries become more expensive as they are produced on a larger scale. Don't mass production advantages apply to batteries too?

Wrt the recycling of batteries, that it poses an environmental challenge is complete bunk. It poses an economic challenge, but the technoloy is all there to safely recycle lithium batteries. Lithium batteries are not considered toxic anyway. It's a pity they choose to continue the myth that batteries are bad for the environment. It all depends on the type of battery and how you choose to produce and dispose of them.

Umicore has developed a closed loop recycling process in which no toxic substances whatsoever have to be discharged into the environment. It is just a choice whether we use such technology or not.

"it is not clear whether there would be a substantial reduction in emissions by switching to these new powertrain technologies."

How much clarity do they need? The studies I've seen, coming from MIT, UC, Imperial College, Triax, and many many more academic, government and consultant sources, all point to significant reductions in CO2 emissions by HEVs, PHEVs and BEVs. Can someone, anyone, show me a study that concludes the opposite.

We don't have to wait for decarbonized electricity - there's no point waiting for a silver bullet solution; we are just at the start of a long-run evolutionary process that, with strong government support, could electrify and decarbonize most if not all vehicle-kilometres travelled by 2050.

No kidding. Battery packs are expensive because they are low-volume items with little automation applied to their construction (not unlike hand-soldered PV panels). Slash those costs with volume and the price drops. The rule of thumb for the experience curve is that cost drops 20% with each cumulative doubling of production. This suggests that full-scale production (millions/year) would cut costs by more than half within the first year.

These 2020 EV forecasts vary from 2 to 20 percent of sales.

During the first 14 years, through mass production, the Model T price roughly halved every seven years (Wiki). With such a trend the 2025 gasless Leaf would be $5,203, including the 2015/80% battery range improvement Nissan has already put in writing.

Would EV sales improve?

Suppose a Bush terrorist blew a key refinery or ship channel or - 70 virgins forbid - a Saudi king's favorite wife and gasoline prices tripled as OPEC did in late 1973.

At a US $9/gal, it might be ICE cars with 2 to 20 percent of sales.

Beancounter,

"Can someone, anyone, show me a study that concludes the opposite."

See Figure 6.10 in the below link for the detail report done by DOE. You can not generalize electric mile to low emission. Depending on the state you live in, it varies greatly. On average (of all the US states), a plugin hybrid like the Volt would pollute more and consume more fossil fuel (but a lot less petroleum) than a standard Prius.

http://www.osti.gov/bridge/servlets/purl/982352-XonYa7/982352.pdf

This report does not include the Volt's exhaust pipe emission. CARB just certified it as ULEV short of SULEV or AT-PZEV. Therefore, Volt's emission will continue to emit more pollution (when running on gas engine) than a standard Prius.

usbseawolf2000,

Good reference, which takes a while to digest.

The cost differential between HEV and ICE equivalent has been grossly exaggerated at ($5K). It is down to ($2K) already and Toyota claims that it may be down to ($0.0K) by 2015.

The same can may said about PHEVs and specially BEVs. The progressive drop in batteries price + higher performance will make BEVs much cheaper before 2020. By 2020 BEVs may even be cheaper than their ICE equivalent.

As usual, electrified vehicles penetration in China and India by 2020 has been grossly under estimated.

J.D. Powers will have to change their forecast soon.

USB: note that the projection is for GHG emissions less than 80% of GV using the US average generation mix (Figure ES.1, page 21). The extreme is for Illinois.

The least-cost charging is more GHG-intensive because of the high fraction of coal-fired power in the base load. If this is replaced with nuclear and opportunistic wind (dynamic charging), GHGs go through the floor.

These reports read as though written by oilco researchers. We all know it is easy to skew findings and stats to meet a particular agenda.

Let's watch how people rise above their EV range anxiety and realize that never having to purchase gasoline again - and refueling is no more complex than charging a cell phone - are conveniences. Worthy of purchase.

Of course this report relies on the "green" car story. EVs will sell far more units based on their ability to displace destructive foreign oil - than on their greenness. Unfortunately, the green angle is a liability for some. JOBS, improved economy, and breaking the addiction to foreign energy - is a far more acceptable story. And ultimately the reason for EV sales success.

Prius' 2M sales already prove the market for gas economy is a driving factor. Leaf and Volt in EV mode consume ZERO gasoline.

The Argonne study seems to show what a lot of people say as a matter of cliche: electric cars will only move the pollution from one location, the tailpipe, to another, the power plant. However, figure 6.10 does show that emissions from BEVs and PHEVs are overall 30-40% less than ICE vehicles.

It also shows that in regions where coal is the biggest source of electric power, as in the midwest, PHEVs emit more GHGs than in California, which uses a lot of natural gas power. This is not unexpected, although it's surprizing to me that a Volt, considering only its electric operating range, would emit more GHG than the Prius.

Fortunately, we have cheap solar power coming that may replace coal eventually. In that case BEVs and PHEVs will use less coal and produce far less GHG.

It seems to me that a technology so heavily dependent on R&D would be very difficult to predict using standard consumer and market variables. Without looking at patent protection, government investment, mass production, BASF's new battery factory in Ohio, and other technology-related issues, J. D. Power is ignoring a lot in their analysis. I don't think they are qualified for this kind of report because they are principally a marketing information company.

it's surprizing to me that a Volt, considering only its electric operating range, would emit more GHG than the Prius.

Please note that the Volt is more tnan 700 lbs heavier AND less aerodynamicly efficient than the Prius. A fairer comparison (of plug-ins) would be between the Volt and a Prius with the same 40 mile all electric range - the Prius+ plug-in; http://www.calcars.org/priusplus.html

And a fairer comparison of GHG emissions would be between a standard Prius and a Prius+.

"5.2 million units in 2020" of BEV and PHEVs. But Sanyo is planning to produce 10 times its current volumn of Li-Ions in 2015. That would be enough for 125,000 vehicles per month or 1.5 million per year. They claim that would be 30% of the market, which would imply 4.5 million vehicles in 2015. Clearly Sanyo's forcast is a lot more optimistic than J. D. Power
http://reviews.cnet.com/8301-13746_7-20020601-48.html

Even IF 5 million out of 100 million cars on the road are HEV/PHEV getting 40% better mileage 10 years from now in 2020, that is about 1% less oil usage. We are on track to use 10% more in 10 years.

We can use 20% less oil with 100 million cars using cellulose ethanol and methanol, trucks and buses using CNG/DME. We have to go with what will work and quit hoping for something that will not do the job.

Moving most interstate freight from diesel trucks to electrified rail will cut about 20% of motor fuel use right there. Using engines like the split-cycles everyone's talking about, and not oversizing them or the vehicles, will probably save a third of the rest.

"While most consumers say they want to create a smaller personal carbon footprint, research shows this consideration carries relatively low weight in the vehicle purchase decision."

Which is why for the sake of the environment AND energy independence - this must be replaced with a JOBS, ECONOMY, SECURITY message. Buying alternative fuel vehicles provides local JOBS, grows local ECONOMIES, and strengthens national SECURITY.

THIS is the message that will sell more PHEVs than any other. It also benefits the environment best.

Which is why for the sake of the environment AND energy independence - this must be replaced with a JOBS, ECONOMY, SECURITY message.
This it must.
Buying alternative fuel vehicles provides local JOBS, grows local ECONOMIES, and strengthens national SECURITY.
In practice, AFVs mean engines which are built to operate on up to E85, but almost never do so... and are grossly oversized and over-thirsty compared to what real economic and energy security demands. The ethanol is made from ammonia fertilizer which is either made from imported NG or imported itself, and has huge costs in lost topsoil and water.

We can't address our problems as long as we consider liquid fuels as solutions.

Fleet purchases (such as GE's decision) will get the ball rolling for EV's, as govt and corp's see the maintenance benefits of EV's. This knowledge will seep into consumer consciousness. But what would really get the ball rolling is a liquid fuel supply disruption, which is not unlikely (before 2020).

@danm: You are intimating a gas tax. It would be interesting to see how that would fly in a smaller State. For instance GE's home State of CT.

If they were to legislate a progressive gasoline tax while offering State tax credits for EV/PHEV/E85 purchase - how would that help?

@EP: I am considering the vast bulk of E85 to come from diverted corn crops. Diverted from animal feed. Which might just make the cost of a Big Mac higher. Oh well. We get lower cholesterol to boot!

Our addiction to over-powered, over-sized, heavy, noisy, inefficient gas guzzler runs very deep. We got accustomed to those monsters and are convinced that smaller, lighter, quieter more efficient electrified vehicles will make us look poor.

One way to get over our looking poor fear or phobia may be to pad e-car with light weight foam to make them look bigger than they are. Add artificial noise generators to satisfy the ever young (immature) crowd. These should automatically lock out between 19h and 8h and in residential areas.

"We can't address our problems as long as we consider liquid fuels as solutions."

Well there you have it, forget the Open Fuel Standard and solutions that will actually work. We will all hope for electric trains and electric cars that will suddenly appear real soon now, but if they don't they should have. If everyone had just listened to those visionaries everything would be fine by now.

HarveyD. As much as I would like to conserve energy, I don't want to drive a cracker box put-put. The main reasons to have a large car is to have a smooth ride and to protect the occupents from getting hit by a large truck. Getting the trucks off the road would solve that problem, but that will never happen. Small cars can't provide a smooth ride on a rough road because of Newton's 2nd law.

"that will never happen"

That is a key phrase, I try to never say never, but it is a set of probabilities. Which outcome is most likely to do the most good in the shortest time at the lowest cost with the fewest risks.

When you put all that together you start to see a more realistic picture of probable outcomes, instead of hoping that the whole world will change overnight to suit some grand vision that has all been worked out in a few minds.

"Never happen" is just a metaphor, but the problem with large trucks is that we really need them. Railroads can get products and materials only so far. So large vehicles will be needed to go from loading dock at the train staion to the distributer warehouse and from there to the retail store or factory. The trucks need to drive in cities and suburbs at high speed and low. Truck traffic comprises about 10% of the total. So they will be a concerne for using energy and danger for smaller vehicles.

The energy probelm could be solved by electrifying them and finding more clean energy, or reducing the human population. Since we have little hope of controlling our population growth, pretty soon some delivery trucks will disappear, like the ones delivering fish.

I am considering the vast bulk of E85 to come from diverted corn crops. Diverted from animal feed.
At a total harvest of 12.7 billion bushels and 3 gallons/bushel, the entire US crop could only produce 38.1 billion gallons of EtOH (the energy equivalent of about 25 billion gallons of gasoline). The US is still using about 140 billion gallons of gasoline per year (plus diesel).

Against this you have the energy demands of pumping water to expand production in dry areas like Nebraska, depletion of aquifers, massive nitrate pollution and topsoil loss, and the impossibility of using all the byproducts of fermentation as animal feed if there isn't about 2x as much grain to mix with it. Even before worrying about the natural gas required to fertilize and distill it all, it is clearly impossible for ethanol from corn to fill the energy gap from petroleum depletion. (Also, corn carryover is now down to about 1 billion bushels worldwide. We are literally burning our food supply and risking famine.)

Using direct-injected ethanol to provide on-demand octane boost for a downsized, highly turbocharged engine can cut total fuel needs by ~30% with 5-10% ethanol. THAT is something we could supply and would be completely worth it; E85 is not.

forget the Open Fuel Standard and solutions that will actually work.
If you define "actually work" as "keep the farm lobby happy"; as even the simple arithmetic above proves, it cannot do much else.

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