GHG Emissions, Industrial - November 3, 2017
Study: EVs, hybrids to share half of market by 2030
As automakers continue to expand their hybrid and fully electric vehicle offerings worldwide, a new study indicates those fleets will cut the global market share of pure internal combustion engines in half by 2030.
The research, released Nov. 2 by Boston Consulting Group, shows that internal combustion engines will continue to play a major but shifting role in the industry as over time, most electrified vehicles will be hybrids. The global management consulting firm named three factors — technology, regulatory mandates and consumer cost of ownership — that will shape the changeover, which BCG expects to play out over three phases and about a dozen years.
The firm predicts that internal combustion engines will continue to be the dominant powertrain at least through 2020, "as the prices of electrified vehicles will remain high, even with incentives, and the payback period based on total cost of ownership for consumers will be too long to be attractive." In addition, the firm said manufacturers will readily meet current emissions regulations with advances in internal combustion engine technology.
On the topic of U.S. incentives, sweeping tax reform legislation proposed by House Republicans on Nov. 2 would eliminate the current $7,500 per vehicle tax credit that has helped drive early adopters of EVs, according to Bloomberg News.
"That will stop any electric vehicle market in the U.S., apart from sales of the highly expensive Tesla Model S," the news agency quoted Xavier Mosquet, senior partner at Boston Consulting Group and the report's lead author, as saying. "There's no Tesla 3, no Bolt, no Leaf in a market without incentives."
That said, the global market for EVs is expected to continue to accelerate steadily, as countries such as China and a number of global cities continue to pass regulations to completely phase out gasoline-powered vehicles.
"As the industry moves into the next phase, from approximately 2020 to 2025, electrified vehicles—a mix of full hybrids (HEVs), mild hybrids or 48-volt hybrids (MHEVs), plug-in hybrids (PHEVs), and battery-powered electric vehicles (BEVs)—will increase their share of market as OEMs are forced to meet tightening fleet-wide efficiency and emissions standards, principally by incentivizing sales of non-ICEs," the firm said in a release announcing the report. "After 2025, falling battery prices and rising consumer demand based on TCO will drive rapidly increasing sales of all electrified vehicles, and especially BEVs. The adoption of electrified vehicles for shared mobility vehicles will accelerate because their higher mileage will result in more rapid payback of the investment."
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