Published on June 29th, 2016 | by Roy L Hales11
A $10 Billion Per Anno EV Market
June 29th, 2016 by Roy L Hales
Originally published on the ECOreport.
Michel Langezaal believes that electric cars could replace gas cars, as the vehicle of choice, within a decade. The tipping point will come after they have more range and are competitively priced. He said, “History shows us that once you hit 5% or 6%, if the product is better, then the breakthrough comes much quicker.” The latest LUX Research report is more conservative and predicts a $10 billion per anno EV market by 2020.
$10 Billion Per Anno EV Market
“If we think about the next 20 years in the automotive industry, EV adoption will likely look like an exponential increase, and the rate at which we buy EVs will continually increase. The cost of batteries and EVs will decline, charging infrastructure will be more mature, and consumers will have more EV options to choose from – all resulting in increasing adoption. I’m not sure we will see any sort of jump or rapid increase once we reach 5% penetration, but the rate of adoption will continue to accelerate,” said Chris Robinson, lead author of the new Lux Research report, Segmenting the $10 Billion Battery Market for Plug-in Vehicles: Market Share Projections for OEMs, Individual Models, and Suppliers.
Availability Of Lithium
Will the availability of lithium put a damper on this expansion?
Elon Musk seemed to allude to this when he cut the ribbon for his Gigafactory in Nevada. “In order to produce a half million cars per year … we would basically need to absorb the entire world’s lithium-ion production,” he said.
But lithium is an extremely abundant element, and production capacity can be ramped up as needed.
“The Gigafactory won’t use up all the known lithium. The US Geological survey estimated there are 13.5 million metric tons of reserves of lithium – enough to produce batteries for around 350 years of batteries at our current usage rate. Certainly our lithium usage will increase as EV sales increase, but it’s still hard to imagine a scenario in which we use these lithium reserves in the next 30 years,” responded Robinson. Furthermore, lithium can be recovered once a battery is beyond its useful life, and then used again in a new battery.
Growth Of The EV Industry
The EV industry has already gone through a “false start” (2009–2014). Government mandates, designed to meet emissions compliance, drove the market.
According the Lux Report, “Fiat’s CEO even pleaded with the public not to buy the 500e, saying the company lost $14,000 on every car it sold.”
That has changed.
“Plug-in adoption is ultimately being fuelled by rapidly decreasing battery costs and the success of early EVs such as Tesla’s Model S and Nissan’s Leaf, which has forced a number of other OEMs to make more serious commitments to developing plug-in vehicles,” says Robinson.
7 Makes To Watch
Now that EVs are coming into their own, Lux has identified 7 manufacturers who will lead the world into greater adoption.
Toyota sold it’s 8 millionth hybrid in 2015. It unveiled the Prius Prime at the 2016 New York Auto Show. However, reading that it only has 22 miles of electric range, I’m reminded of Langezaal’s description of hybrids as “gas cars.”
“Toyota remains at risk in falling behind other companies, and has not announced any pure electric vehicles after discontinuing the RAV4 EV compliance car,” writes Lux.
BYD‘s new Tang SUV has already captured a large share of the Chinese market, holding the #1 spot in the country.
Outside of China, the Nissan-Leaf is currently the world’s best seller.
BMW’s i3 EV will have a range of 124 miles by 2017.
By that time, however, there will be affordable EVs with a range of 200 miles on the market. A revamped version of Volkswagen’s e-Golf is expected to provide a welcome diversion from “Dieselgate.” The first of these long-range EVs priced at less than $40,000 (before incentives), however, should be the Chevy-Bolt. But Tesla will soon push back with its low-priced Model 3, which should become “the best-selling EV sometime around 2019,” according to Lux Research. Presumably, it doesn’t see Tesla achieving the 2017/2018 ramp that Tesla targets.
The Lux Research report predicts, “Nearly 1.5 million plug-in vehicles will be sold in 2020, nearly quadruple the number sold in 2015.” Tesla’s 2020 aim, alone, is 1 million electric cars.