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Electric cars: a numbers game

When it comes to predicting the rate of electric vehicle (EV) uptake, one thing is clear: there is little consensus.

With the most recent forecasts ranging from 1% to 15% of worldwide vehicle sales by 2020, why is it so difficult to predict? Because three things could make all the difference: charging infrastructure, costs, and China.

Part of the problem is chickens and eggs, or cars and charging posts. Who will buy a £25,000 car when there is nowhere to charge it? Who will pay the same amount for a few charging posts when there is no-one to use them?

The UK government is seeking to accelerate infrastructure deployment by subsidising publicly accessible posts in its selected ‘Plugged-in-Places’. But it is also relying on employers to install charging posts at workplaces. Why would an employer choose to do this? There is no practical way to recover the cost – and their employees don’t expect charging posts to be provided because they don’t have EVs. UK policy and strategy must be aligned, i.e. some form of financial incentive for employers to install charging infrastructure, perhaps via the carbon reduction commitment.

Another significant influence on uptake is cost – vehicle sticker price and total cost of ownership. Purchase price is expected to reduce slowly with battery costs predicted to fall from about US$1,000 per kWh to between $290 and $650 by 2020.

But relative ownership cost (compared to petrol or diesel vehicles) depends directly on oil prices, the price of carbon and tax policy. Who would like to predict any of those, let alone all of them, more than a year or so ahead?

What we do know is that in Europe, fuel taxes are higher, environmental legislation is stronger, and driving distances are shorter (compared to the US, at least). These factors, combined with strong government support, are likely to lead to a faster rate of take-up in Europe than elsewhere. Predictions for the UK and France, which both provide EV purchase subsidies, average out at about 14% of sales in 2020, nearly double the worldwide penetration.

So reducing costs can help increase uptake. But the great unknown is China. It overtook the US as the largest market for passenger cars in 2009 and a pro-EV policy in China could lead to huge local demand, most likely served by local manufacturers.

A few manufacturers have made billion dollar bets on EVs. Without government support the race will never start; even with it, they will have to wait a few years to find out if they have backed a winner. My own prediction is that charging infrastructure will be limited for the next ten years. Plug-in hybrids will become more prevalent (they are less infrastructure dependent) but fully battery electric vehicles will still be niche products for some time to come.

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