Electric cars: Will Europe lead the way?

Posted on October 18, 2011


When it comes to electric cars, many have said that it is the emerging economies, not shackled by convention, that will lead the way in electric car uptake. But a recent report by Ernst & Young suggests that it is Europe that will become the first mass market for EVs (see story).

The report details research compiled from the responses of European automotive executives, so it is perhaps not surprising that they see their home market as the likely first stronghold for electric cars. But why Europe? What makes this continent the first to really take advantage of EVs?

Where in the world?

Firstly Europe has very strict environmental legislation compared to other parts of the world, designed to drive a move to clean tech solutions. But while emerging economies such as China and India are also trying to clean up their act, what gives Europe the edge is that its residents are already largely car-dependent and are comparatively wealthy, making them more able to make the switch.

green carHowever not everyone agrees. According to recent report by Pike Research called Plug-in Electric Vehicles, China will be the largest market for electric cars, with 888,000 battery electric and plug-in hybrids sold by 2015, representing 27 per cent of worldwide sales. Although the research includes in its forecast the sales of plug-in hybrids as well as fully electric cars, the forecasted lead is substantial. Including these rechargeable hybrids, the United States is predicted to offer the second biggest market with 841,000 vehicles sold by 2015 or 26 per cent of the market.

So just where in the world can we really expect to see electric cars greedily taken up? We’d like to think everywhere would see the advantage, but the forecasts provide a contradictory view.

Infrastructure key

Agreeing charging standards and installing infrastructure will be another major hurdle in encouraging motorists to switch to electric cars so the markets which best tackle these issues will likely see the biggest corresponding sales. With Europe expected to invest around €5 billion (US$6.5 billion) in EV infrastructure over the next seven years, it seems that European countries are seriously putting their weight behind EVs. However China is already expected to invest around US$15 billion in building EV infrastrucuture, which makes Europe’s plans and the United States’ $100 million investments look pitiful.

charge pointAnother report, this time from PRTM Management Consultants suggests that indeed, this investment will give China a lead in the EV market, but that won’t mean that Chinese consumers will be more likely to buy EVs than American consumers. If fact, the firm’s Electrification Roadmap, published in April this year, suggests that China will lead for a time thanks to its investment focused around encouraging EV uptake in business fleets and the public sector, but the US’ system of consumer tax rebates will encourage the ordinary member of the public to plug in too, eventually allowing the United States to become the leader in consumer EV sales.

Of course one of the most significant points to bear in mind when assessing the advancement of electric cars and their supporting infrastructure is that sometimes governments talk big numbers and then fail to deliver on these promises. We’ve already seen this in London, when there was some talk from the Mayor Boris Johnson of installing 7,500 electric car charging points across the city by 2013, now that is just 1,300 by 2013.

Our Vedict: EV market will be widespread but patchy

The success in electric car market is dependant on many factors, and while China is certainly throwing significant investment that way as part of it continued efforts to encourage economic growth in a sustainable way, consumers in the US and Europe are already established car owners.

China’s economic clout might be growing, but the benefit of that takes to filter down to the ordinary working person. The ordinary bicycle is still a very prevalent mode of transport in the country. If you thought an electric cars was too expensive for you, imagine what you would think if you lived in a country where the average monthly wage was around US$12,000 (£7,620) a year.

Electric cars taking part in a parade in California over the weekend; one of the micro markets where EVs will sell strongly

In fact, electric bicycles are more popular than cars in China.

We honestly wouldn’t expect that any one country or continent will truly lead in the uptake of EVs; instead, uptake will be evident around the world but patchy; with some cities and states getting into the EV revolution more than others.

As local authorities create micro markets by adding their own incentives and charging facilities, you’ll see certain areas grow the presence of EVs more than other places, particularly in congested cities. We can already see evidence of this happening in London, UK, California in the US and Amsterdam in the Netherlands. While America celebrated National Plug-in Day over the weekend, it was Santa Monica in California which led the celebrations (see story). Expect micro markets to rule in whatever country, state or continent you live in.

via Electric cars: Will Europe lead the way? The Green Piece.

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