So, How Many Electric Cars Will There be in 2020? Analysts are All Over the Place

Short answer: anywhere from 2-10% of new car sales will be plug-ins by 2020, but it seems there is not a single analyst who can agree on that number without caveats. Real answer: nobody knows, but they like to make a lot of noise about it and project confidence that they do. I could do that. Maybe I should be an analyst? Seems they make a lot of money and they’re always in demand.

Anyway, Nissan says that number will be 10% and Tesla also thinks it will be in that range. Another analysis, done by Deloitte Consulting, was released today that says EVs will only be between 2% and 5% of the market by 2020.

But what is Deloitte basing their analysis on? Mostly the fact that they think batteries will cost too much and ranges will be limited. Really? Sometimes I wonder if these analysts are using data from last decade. Nissan already says it will have a battery out by 2015 with double the energy density and reports say that they have already broken the $500 per kWh barrier for battery pack costs. Once we get down to sub $400 per kWh, the battery will be on par with the cost of an engine and associated emissions controls.

Global consulting firm PRTM — which helped write the Electrification Coalition’s ‘Electrification Roadmap’ along with Nissan and other industry representatives — has a different take that kind of splits the difference.

“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,” said Oliver Hazimeh, Director and head of the global e-Mobility practice at PRTM. “We estimate 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%.”

And the cost of batteries, the issue most often sited by analysts as being the number one impediment to adoption, also appears to be coming down much faster than expected.

“The cost of hybrid/electric vehicles will come down significantly during the next 10 years, primarily by reducing the lithium-ion battery cost,” Mr. Hazimeh went on to say. “Specifically, the commercial cost of lithium-ion batteries will see a 50% decline from today’s $650 per KWh to about $300 per kWh by 2020.  This will be achieved through a mix of scale, operational efficiencies and technology advances. This price reduction, coupled with rising energy costs, will create the economic incentive to appeal to a broader consumer base. PRTM expects that HEV, PHEVs and BEVs will reach total cost of ownership parity by 2010, 2016 and 2018 respectively.”

So you can see there are widely diverging viewpoints on this topic. But even if Deloitte is right — which I highly doubt — I did an analysis that shows 3% of the new car market share in 2020 is still 3.5 million cars. That doesn’t sound too bad now, does it?

Source: Reuters

Nick Chambers

Not your traditional car guy.