During The Networked EV 2011, many speakers and attendees questioned the forecasts for electric vehicles in the market in the next three, five, and 10 years. Although the enthusiasm for electric vehicles is still palpable amongst those who work in the industry, it has been tempered now that the hard work has begun to get the cars, and related infrastructure, into the hands of every early adopter and then tackle the mass market.
To close out the conference, which took place at Pacific Gas & Electric in San Francisco, Travis Bradford, president and founder of the Prometheus Institute for Sustainable Development and co-author of the recent GTM Research report, Electric Vehicles 2011: Technology, Economics, and Market, offered six big thoughts on what will and won’t happen in the electric vehicle market in the coming years.
1) Forecasts Are Useless
Forecasts for EVs abound, and vary wildly. Instead of adding to that mixed bag, Bradford instead offered an analysis of what really to expect. “First blush suggests that demand outpaces supply by a wide margin,” said Bradford. But he noted that the demand figures are based on aspirations and not contracted sales. Aspirations, especially when it comes to car buying, change with time. Toyota is currently missing targets for Prius sales and forecasts are missed all the time. No one really knows what sort of demand is out there for EVs beyond early adopters.
2) EVs Are Already Relatively Cheap, but May Have Trouble Getting Cheaper
The report breaks down total cost of ownership for battery and plug-in vehicles compared to the good, old-fashioned internal combustion engine. Both the PHEV and BEV compare well to the internal combustion engine in terms of total cost of ownership, but it is really the plug-in, rather than the fully electric, that comes out on top. Why? “The real reason cost doesn’t get better is the internal combustion engine doesn’t stay the same,” said Bradford. He noted the increasing MPG standards coming to the U.S. as one example. “The electric vehicles will have to get better just to keep up,” he said.
3) EVs Will Be Delivered by Big Auto
Although there is a lot of lip service -- and venture capital -- given to new entrants in the electric vehicle space, it will be Detroit and its international counterparts that deliver EVs to the masses, said Bradford. Besides the necessary sales and service structure, Big Auto can gain customer trust, which is a major obstacle to adoption today, according to Bradford. And all those forecasts that might be missed? Big Auto can withstand that too.
4) BEVs Will Find Niche Markets; PHEV Will Win in Mass Markets
No surprise here: a car that still takes gas, but can also be plugged in will win in the market. Bradford noted an Ernst & Young study that looked at the behavioral issues that stop people from buying EVs and found the top three issues were access to charging, price, and battery range. Those issues become less of a concern with the PHEV. For the early enthusiasts, there are already forums where drivers compare how far they can go on their battery before the car switches to gasoline, and the idea of barely having to go to the gas station is appealing to everyone. In the short term, the PHEV might not just be an easier sell in the mass market, but could also be a gateway car for people to get comfortable with electric driving.
5) It’s Not About…
Charging Infrastructure
Bradford argued we don’t need to build it all out to get to one million cars on the road. And yet in Texas, where it’s a long drive between most places, he noted that most Texans wouldn’t even consider an all-electric EV. He said that chargers don’t have to be everywhere, as most of it is done at home, but they do need to be where people are parked for a long period of time, such as workplaces. “We don’t need to go build it all,” he argued, “we already have it, and it’s called the electrical grid.”
Batteries
Batteries will get cheaper, and prices will come down, but Bradford argued that that will not make or break adoption of EVs.
Vehicle-to-Grid
Nearly everyone at The Networked EV could agree that sometime in the future, V2G will happen, but currently there’s no value in it. Someone will eventually figure out that contractual relationship, and until then, it’s not really an issue.
6) EVs Provide Optionality to Change Transportation Forever
The appeal of cars has not inherently changed over time. It’s about freedom, said Bradford, and all of the other emotional issues that come with car ownership are not changing with the EV. However, “there’s great optionality at the personal level,” he said, not to mention “wild risks to traditional fossil fuels.” Although EVs may be slow out of the gate, they will provide an alternative to internal combustion engines. “The internal combustion engine industry has already been transformed by this,” he said. “There’s nothing better to sharpen the mind than someone who’s coming to take your business.”