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Published on September 30th, 2013 | by Silvio Marcacci


Electric Vehicles Speeding Toward 7% Of All Global Sales By 2020

September 30th, 2013 by  

Hybrid vehicles may have had pole position so far in the race to a sustainable transportation future, but electric-only vehicles are about to pull even – and they’re both becoming a significant part of global vehicle sales.

Combined worldwide sales of hybrid and plug-in electric vehicles will reach 6.6 million annual units by 2020 and become almost 7% of the total light-duty vehicle market, according to Navigant Research’s 2013-2020 Electric Vehicle Market Forecast.

Several factors are fueling this growth, including consumer demand for less-expensive operational costs compared to gasoline-powered vehicles, consistent government policy, multiple new models from major automakers, and lower battery prices.

Annual global EV sales by type

Annual global EV sales by type via Navigant Research

Different Electric Vehicles, Similar Economic Outlooks

Three different types of electric vehicles (EVs) fall under Navigant’s forecast: hybrid electric vehicles (HEVs), those that generate all their own electric energy; plug-in electric vehicles (PHEVs), those that use electricity from the grid and gasoline; and battery-electric vehicles (BEVs), those that only use electricity from the grid.

While the three types of vehicles may have major differences in how they’re powered, a unique combination of factors means they all have one thing in common – they’re about to see a global sales boom.

Under Navigant’s outlook, HEVs will grow at a compound annual growth rate (CAGR) of 11.5%, while PHEVs will sell at a 31.9% CAGR, and BEVs increase at a 31.5% CAGR over the next seven years.

Better Prices And Government Policy Drive Consumer Demand

So what’s powering this surge? “Electric vehicles, including plug-in models, are becoming an increasingly important part of the global automotive market,” said Navigant’s Dave Hurst. “Growth is being driven not only by the inherent appeal of the vehicles, but also by consumer demand.”

As always, favorable economics are the prime ingredient for market expansion. Gasoline prices are projected to increase at a 7.2% CAGR between 2013 and 2020, while HEV and PHEV battery pack prices are expected to decrease 10% and 26% respectively by 2020 as advanced research unlocks battery innovations.

Considering battery packs can represent up to half of EV prices, while the cost to recharge a car with electricity is a fraction of the cost compared to refueling with gasoline, it’s clear why Navigant sees lower EV operational costs as such a major market driver.

But beyond better economics, electric-powered vehicles are becoming much more mainstream with more options available to consumers. From established models like the Chevy Volt, Nissan Leaf, and Tesla Model S to new options like the Chevy Spark EV and hybrids from most major automakers, EVs are available in almost every price and performance range.

Navigant also credits steady government policy support for the rise in EV fortunes, expecting currently available tax incentives worldwide to remain steady and provide financial support for consumers, while stricter fuel economy and emissions regulations encourage automakers to continue expanding low-carbon options.

Cleaner Cars = Green Growth Across America

Perhaps most promising, this pending EV boom could also boost the economic outlook for several states across the US. North America is expected to be the largest PHEV market in the world and the only market anticipated to have significantly higher PHEV sales compared to BEV sales, with a 1.5:1 sales ratio.

Annual EV sales by US state

Annual EV sales by US state via Navigant Research

These projections mean we’re about to see many more clean cars on US roads. Navigant forecasts over a million PHEVs will be sold in California, New York, Washington, and Florida alone between 2013 and 2022. California is expected to dominate overall sales, with more than 815,000 units, while Hawaii will see the highest concentration with more than 10% of total vehicle sales being PHEVs.

While President Obama’s expectation of one million EVs on the road by 2015 might have been a little bit ahead of its time, the underlying trends hold true. Navigant’s forecasts are just the latest confirmation that low-carbon transportation is accelerating – bringing with it cleaner air, less dependence on fossil fuels, and a greener economy.

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About the Author

Silvio is Principal at Marcacci Communications, a full-service clean energy and climate policy public relations company based in Oakland, CA.

  • disqus_Y2r7QXSTsR

    Adoption of 100% electric cars will accelerate at a nonlinear pace for a few reasons. Among others, here are a few of the bigger reasons I think:

    1. Many households have 2-3 cars, one of which a driving range of 80 miles is ok. Not replacing all of them, just 1.

    2. Batteries will get better and cheaper simultaneously. At some point Li-Ion will be supplanted by something as yet unknown, and that will spark a paradigm shift.

    3. The volatility of gas prices will drive people into electrics to have more predictable and lower monthly operating expenses, especially some businesses where managing cash flow is critical.

  • spec9

    I wonder if residential solar PV will start driving EV sales. Once you get those nice cheap clean solar PV electrons flowing, it is hard not to try to find other uses for them.

    • Bob_Wallace

      I think we’re in the very early days of a transformation that’s going to be on the scale (or larger) of computers, the internet, digital photography, cell phones and a bunch of other stuff.

      Tipping point has been reached. Change is accelerating but nowhere near what the rate will be going forward.

      Solar on your roof makes driving close to free.

      13,000 annual miles with 0.3 kWh/mile and 4.5 solar hours per day means that one needs less than 3 kW of panels. Installed solar prices will drop to no more than $2/watt (probably less). $6,000 max.

      Panels last 40+ years. $6,000 / 40 / 13,000 = $0.01/mile. Add in a bit to pay the grid to move your solar to where you park during the day.

  • Jouni Valkonen

    Elon Musk predicts that by 2025 50 % of all sold cars are fully electric.

    I think that to put a linear projection here, is just silly. Because electric vehicle sales are following exponential trajectory.

    This projection also assumes that all development in battery technology is halted from 2013 onwards.

    • Bob_Wallace

      50% by 2025?

      That would be tough, but not impossible. I assume (safely) that Elon has much better information about what is ‘soon coming’ in the battery field.
      Give us a 200 mile EV for $25k or less by ~2017 and I can see 50% by 2025.
      And, if that happens, ICEVs a small niche product by 2030. Mostly PHEVs for people who do drive well beyond the normal “wired” routes.

      • Jouni Valkonen

        Elon and Tesla just assumes that there will be c. 8% annual cost reductions in batteries. This is based on same economic principles as Swanson’s Law. Therefore this is very sound estimate.

        • adam

          Nope, they are expecting to %40 (at least) reduction on cost. That’s why they built gigafactory. I’m waiting surprises from Tesla soon.

          • Jouni Valkonen

            At least 40 % by 2020 was the prediction and probably more. But they assume that the cost of technology is getting down about 8 % per year.

            But that was year ago. Now it seems that the cost of batteries is getting down about 20 % annually and that means that by 2020, the cost of batteries is pushed about 60 to 70 % down. The cost of EV batteries will be below 100 dollars per kWh by 2020.

          • Bob_Wallace

            8% is the number I’ve seen for average annual capacity increase. Any chance you’ve confused price and capacity?

            My guess is that we will have inexpensive batteries fairly soon. The Navigant Research paper stated that material costs for the Panasonic lithium-ion batteries that Tesla uses are about $70/kWh. That would mean batteries could be manufactured an sold at a reasonable profit for $100/kWh.

            With multiple companies getting into the EV battery business competition is likely to push prices down fairly rapidly. The only thing that would keep them high is if demand for EVs exceeded battery manufacturing capacity.

            EV demand is likely to lag behind manufacturing capacity. Lower battery prices will be the driver for higher EV sales rates. And companies are likely to build more capacity ahead of time, anticipating increases in demand.

          • Jouni Valkonen

            Energy storage markets will grow even faster than electric car markets. That is my crystal balling for the next 10 years.

  • Shiggity

    Once trucks and SUV’s get electrified, (battery tech is almost there), the % will be significantly higher. So far there hasn’t been one good plug-in, battery, or hybrid truck or SUV. That will change by 2015.

  • This is the first time I have seen ordinary hybrids, which use nothing but petrol, being promoted as EV’s. I protest.

    • Bob_Wallace

      I’m open to counterargument but I see value in inclusion.

      7% are now driving electrics. Not a puny 0.1%/whatever.

      “Hey! Electrics are taking over market share.”

      And calling traditional hybrids “electrics” might get more people thinking about why their electric car can’t take advantage of cheaper grid energy, but must generate all its electricity with expensive fuel.

      “Hey! Where’s my damn plug?”

      • It’s the input that counts, not what is under the hood. A conventional hybrid uses 100% petrol and 0% electricity. That does not count as electrification,

        • Bob_Wallace

          I understand what you are saying.

          I’m not sure you understand what I said.

  • Bob_Wallace

    I can’t predict the future but when I see someone use a ruler to draw a straight line for new technology adoption as is done in Chart 1.1 I’m willing to bet they can’t either.

    That’s some foolishness there.

    Between now and 2020 it almost certain that battery prices and vehicle prices will continue to drop. That ranges will increase. That more charging stations will be installed. That range anxiety and neo-phobia will decline. That car buyers will become more aware of the lower operating costs of EVs/PHEVs. That a wider variety of EVs/PHEVs will become available so that people will find it easier to pick one that is “pretty” to them. That more people will experience the fun of driving a really responsive and quiet EV. That wireless/inductive charging will become better known and cheaper.

    All of these are uptake accelerators. Each of them will bend the curve upward from a straight line to an exponential curve.

    If you’ve lived through the transition from typewriters to computers. the transition from film to digital, or any other major technology shifts you know there’s something amiss with that straight line.

    • Jouni Valkonen

      I would add that also the uncertainty toward the near future oil price will continue to climb, and this will give governments clear economic incentive to subsidy electric vehicles and tax gas mobiles in order to get rid of oil dependency. It is always more profitable to export oil than to burn it in the gasoline or diesel engines.

    • Ivor O’Connor

      I did not know it was possible to have telephones without electricity but that is clearly what the above shows…

      And that more people had radios than electricity. Perhaps they owned radios so they could be popular when they went to their friends that had electricity?

      • Bob_Wallace

        You can have telephones without having a working grid. The phone exchange puts power in its system – runs separate from building power.

        • Ivor O’Connor

          POTS had some advantages over VOIP.

    • Adam Grant

      The runup in gas prices over the last five years appears to have reduced car ownership among younger North American consumers. As EV’s have the potential to be cheaper-to-produce than ICEV’s once battery prices come down, it’s likely that more people will be able to afford a car.
      On the other hand, once self-driving cars enable a wider range of ownership models, the total number of cars may decline again.

  • beernotwar

    I would bet the number is bigger than 7% by 2020. I expect a surge in a couple of years when the next generation of storage becomes broadly available to consumers. We saw a surge this year when the price and range values moved significantly in consumers’ favor. I believe there will be another big jump once range reaches the 200 mile mark and/or recharge times get reduced to 15 minutes or less. Whether by better batteries or standardized fast charging stations being made available, people will put up with shorter ranges if recharge is fast enough. The other advantages of EV’s are going to become more widely known as well, driving more sales.

    But I’m concerned about the manufacturing side keeping up with demand. Will the big companies build enough EV’s to fuel demand if it goes over the 10% mark?

    • Adam Grant

      It’s also reasonable to expect the balance to tip from hybrids toward pure electric vehicles as batteries improve. Once battery prices come down, a pure electric vehicles should be cheaper to manufacture and maintain than one containing all the subsystems necessary to support an internal combustion engine.

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