Finally, after years of starts and stops, various types of electric vehicles are out in the market and have won early adopters. To convert this "trial" niche audience into a broader mass market, though, a number of other factors have to come into play in the next few years.
A big issue keeping would-be buyers on the sidelines is price. As I mentioned last week, EV prices range from $30,000 to $96,000. Those numbers are way out of line for consumers, who think the EV value-price tradeoff should be somewhere around $23,750, as John Gartner, research director at Pike Research, mentioned during a webinar.
Some of this sentiment was reflected in a recent Pike survey on consumer interest in EVs, particularly plug-in electric vehicles. The percentage of respondents saying they would be "extremely" or "very" interested in purchasing a PEV slipped from 48 percent in 2009 to 40 percent in 2011. Price is one of the major reasons for the decline. Gartner explained in a press release:
Price is the most significant barrier to consumer interest in electric vehicles. About two-thirds of our survey respondents who stated they would not be interested in purchasing a PEV said that they felt such a vehicle would be too expensive. Others said that they would want to wait a few years until the technology is more proven, and almost half said that a PEV would not have sufficient driving range for their needs. These are all key issues, both real and perceived, that automakers will need to address if PEVs are to move successfully out of the early adopter phase.
We know where some of this pricing conversation leads, right? Most definitely, it ties into the cost of the lithium-ion battery, a significant part of the EV's bill of materials.
Pike expects the worldwide Li-ion battery market to boom from $2 billion in 2011 to more than $14.6 billion by 2017. However, Gartner says a significant drop in battery costs is essential if the market is to undergo this kind of increase.
Battery prices -- and thus car prices -- are not likely to budge much this year, even though battery production is likely to outpace EV production. Nevertheless, "as manufacturing efficiencies improve and access to lithium expands, the cost of Li-ion batteries will fall by more than half by the end of the forecast period (2017)," according to Pike. And Gartner said during the webinar that consumers should start seeing the impact on list prices in 2013.
Despite uncertainty about where prices will go, manufacturers and suppliers aren't shying away from EVs' long-term potential. In fact, Gartner said many manufacturers are "beyond the point of no return" in terms of investment, because they view EVs as "critical to their future growth and development."
You don't have to look far to see that's true. Fisker Karma showed off one of its snazzy electric cars at last week's Consumer Electronics Show in Las Vegas. This week, the Wall Street Journal reported that ABB Ltd. expects "exponential growth in demand for fast-charging technology for battery-powered vehicles in the next three years."
If nothing else, it will be interesting to see whether these cars deliver on the promises being made.
@ JADEN well, that is what it seems to be like right now but I think we will start to see more people changing their cars this year to EV. At the end of 2012, Let run a survey on how far the EV has gone.
Good point Jaden, I,M not sure if my country is putting the charging stuff into consideration for now. I guess this may likely be one the challenges this cars will face.The Government is only seeing electronic aspect as the advantage for now which is really is but the charging aspect is yet to be looked into
I think the rising cost of electricity is greatly influenced by the fact that most of this electricity is generated from petroleum considering that oil rise in oil price will directly influence electricity prices. I think key to the success of EV as the future of car transportation is the decarbonosation of electricity.
Jaden, as I mentioned in a previous post, electric vehicle batteries are simply too large and heavy to be swapping out. By the time batteries advance to a state where they can be smaller and lighter, it would be more beneficial to just add more batteries to vehicles so they have longer range.
The idea of electric vehicle is good but I don't see it winning in the market for now as a result of the charging issue. Charging stations like we have gas stations all over seem like most sensible solution. Also, If the cars and the batteries could be designed to make it easy to remove a flat battery and replace it with a charge one, that would've been a good idea too. I think if the manufacturers of electric vehicle can meet a standard in battery design, along with a method of swapping the battery, instead of having to stop for hours to charge while traveling, one could just pulled into a service station and get the battery swapped and be on the road again. We are already familiar with this model and would make the transition to electric vehicle much easier.
Natural disasters wreak havoc to the tune of $100 billion in annual damages, says a UN report. To cope, companies need improved risk management strategies.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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