The Fuels Institute said that the emergence of electric vehicles (EVs) is
expected to have an impact on the global automobile industry globally in the
long run, but this development will be very slow at least for the next eight
years.
While car companies and even countries have recently pledged to go all-in on
EVs, market conditions will make it difficult for EVs to gain 2% share of
vehicles on the road by 2025, according to a new study released today by the
Fuels Institute.
Yet, projected consistent growth in sales indicate the potential for greater
market impact in the years that follow.
The Fuels Institute, founded by the National Association of Convenience Stores
(NACS) in 2013, is a non-profit research-oriented think tank that evaluates
market issues related to vehicles and the fuels that power them, incorporating
the perspective of diverse stakeholders to develop and publish peer-reviewed,
comprehensive, fact-based research projects. The Fuels Institute says it is a
non-biased organization that does not advocate.
Even using the most optimistic scenario for EV sales — assuming high oil and
low battery prices — EVs will comprise, at most, 5% of new car sales by 2025,
according to “Tomorrow’s Vehicles,” which uses analysis based on sales and
registration forecasts provided by Navigant Research. The report includes three
publications focusing individually on fuel consumption, light-duty vehicles and
medium- and heavy-duty vehicles, with projections for both the United States and
Canada.
Many recent announcements related to the future of EVs include pure electric,
plug-in hybrid and traditional hybrid vehicles. Yet, even when considering all
three forms of electrified powertrains, the share of vehicles sold in 2025 that
might be so equipped is projected to be less than 12%. Meanwhile, in terms of
vehicles on the road, electrified options will account for less than 6% of the
entire fleet, according to the Fuels Institute.
“There is significant growth expected for sales of electrified vehicles,” said
John Eichberger, executive director of the Fuels Institute. “But even when
adjusting the assumptions to create a more optimistic scenario for these
powertrains, Navigant Research projects their market penetration by 2025 will
remain extremely limited. It will not be until after 2025 that the impact on the
market will be felt. The compounded influence of consistent growth rates in new
vehicles sales is positioning electrified vehicles to have a greater influence
on the market in the 2030s.”
Through 2025, vehicles powered by liquid fuels (gasoline, diesel, flex-fuel
vehicles and traditional hybrids) will still account for more than 96% of
vehicles on the road in the United States, with the balance comprising battery
electric, plug-in hybrids and a mix of hydrogen, natural gas and propane powered
vehicles. While this represents a slight drop in overall market share, it
remains an overwhelmingly dominant share of consumer demand.
“The traditional transportation energy delivery system will continue to satisfy
consumer demand for decades to come,” Eichberger said. “Meanwhile, the systems
necessary to serve an emerging electric transportation market can be developed.
Consumers should be confident that their transportation needs will continue to
be met without interruption as the transportation market slowly transitions to
include a more diverse energy supply.”
“With more than 272 million light duty vehicles in North America — more than
one per licensed driver — the composition of the existing market will be slow
to change,” Eichberger said. “There is a lot of enthusiasm for growth in the
alternative vehicle market, and with good reason. But bringing these new
technologies to market and selling enough of them to influence a change will
take time. The seeds of growth have been planted and, if sales expansion rates
can be sustained, these alternatives will have a long-term impact on the
market.”
In “Tomorrow’s Vehicles,” the Fuels Institute analyzes sales and registration
forecasts for two potential market scenarios (Base and Aggressive, with the
latter assuming higher oil and lower battery costs).
For both the United States and Canada, for each category of vehicle (light-,
medium- and heavy-duty), the report evaluates sales and registrations for each
powertrain category: gasoline, diesel, flex fuel, hybrid, plug-in hybrid,
battery electric, natural gas, propane and hydrogen.
–Edgar Ang, eang@opisnet.com
Copyright, Oil Price Information Service
