Tuesday, January 3, 2012

High Prices Will Limit Sales of Electric Vehicles in 2012

Many potential buyers will hold off on purchases of electric vehicles (EVs) during 2012 due to the premium pricing of the vehicles, according to a new white paper from Pike Research. Nissan raised the price of the Leaf for 2012, and while the 2012 Chevrolet Volt will sell for $1,000 less, the car comes without several features that were previously standard but are now options.  According to data from Pike Research’s annual Electric Vehicle Consumer Survey, the optimal price for a plug-in electric vehicle (PEV) to engage consumers is $23,750.  With the 2012 Toyota Prius PHEV ($32,000), the Honda Fit BEV ($36,625), and the Ford Focus EV ($39,995) all north of $30,000 (before federal incentives), consumers hoping for an affordable EV ride have been left wanting.  These relatively high selling prices will constrain the market for PEVs in 2012.  The white paper, which includes 10 predictions about the EV market in 2012, is available for free download on Pike Research’s website.

“Vehicles on sale in 2012 will not benefit from recent cost reductions in batteries,” says research director John Gartner.  “The batteries in these vehicles were ordered before 2012, so any flexibility in reducing vehicle pricing will not occur until 2013 or 2014 at the earliest.  Nevertheless, the global market for plug-in electric vehicles will grow to more than a quarter million vehicles in 2012 – a number sufficient to put an end to the ‘are they for real?’ speculation that has surrounded this market.”

Pike Research’s industry predictions for 2012 include the following:
  • Car-sharing services will expand the market for EVs and hybrids.
  • Battery production will outstrip vehicle production.
  • The Asia Pacific region will become the early leader in vehicle-to-grid (V2G) systems.
  • Third-party EV charging companies will dominate public charging sales.
  • Employers will begin to purchase EV chargers in large numbers.
  • EVs will begin to function as home appliances.
Pike Research’s white paper, “Electric Vehicles: 10 Predictions for 2012”, analyzes ten key trends that will influence the development of the electric vehicle market in 2012 and beyond.  Conclusions and predictions in this paper are drawn from the firm’s ongoing Smart Transportation research coverage, with forecasts included for key market sectors.  

During 2012, Pike Research estimates that global PEV sales will surpass 257,000 units.

The market for vehicles that can provide power to a building or the grid will be in its infancy in 2012 and will be driven primarily by fleets that can derive the most value from a vehicle’s battery. Asia Pacific (47% global share in 2012) will dominate this market because the higher penetration of PEVs in the region will create a sufficient amount of power potential for the grid.

A full copy of the white paper is available for free download on the firm’s website.

Pike Research www.PikeResearch.com
Press Release dated December 16, 2011

Another Pike release on December 19th at http://www.pikeresearch.com/newsroom/the-market-for-electric-vehicle-telematics-will-reach-1-4-billion-by-2017 entitled "The Market for Electric Vehicle Telematics Will Reach $1.4 Billion by 2017" noted that:

For early plug-in electric vehicles (PEVs), one of the key features for customers is not a component of the drivetrain, but rather, the telematics package.  Giving the driver the ability to check on the battery and the rate of charge, telematics serve as a lifeline of sorts to help alleviate concerns over the limited range of electric vehicles (range anxiety).  In addition, many manufacturers are developing applications that can provide details on where the closest charging stations are within range of the current battery level of charge.  According to a new report from Pike Research, nearly nine out of ten PEVs sold this year will include at least a basic telematics package, and that percentage will likely grow to 94% by 2017.  Annual revenue from worldwide sales of electric vehicle telematics will total $1.4 billion by 2017, the cleantech market intelligence firm forecasts.

A key group of players in the EV telematics supply chain will be wireless equipment manufacturers coming from outside the automotive industry, who are accustomed to more compressed product development timeframes than the carmakers use.

“The hardware manufacturers are experiencing a bit of a culture shock,” says senior research analyst Dave Hurst, “as automotive development generally targets an 8 to 10-year lifespan, compared to a 2 to 3-year lifespan for other wireless devices.  For this reason, despite the fact that much of the data being transferred in PEV telematics can be done easily with a slow GSM connection, most hardware manufacturers are targeting 3G services with their modems to ensure compatibility with the wireless network long term.”

In addition, while basic telematics packages that offer simple data connections for emergency services, breakdown calls, charging station locations, and diagnostics/vehicle monitoring will be standard features on most PEVs by 2017, many consumers will want more elaborate, connected vehicle telematics, which can provide live traffic, weather, streaming content, and cloud computing-based applications.  Pike Research’s analysis indicates that, by the end of the forecast period, 80% of PEVs will come with connected vehicle systems installed.  Those costlier packages will push average revenue per user (ARPU) for electric vehicle telematics to $13.27 by 2017, up from $10.65 today. 

Pike Research’s report, “Electric Vehicle Telematics”, analyzes the market opportunity for telematics in plug-in electric vehicles, including market forces, technology, government influence on the market, and key drivers of the growth and profiles of key market players.  The report includes plug-in electric vehicle sales, sales of basic and connected vehicle telematics, and global revenue forecasts through 2017, segmented by world region.  An Executive Summary of the report is available for free download on the firm’s website.

A Pike release on December 13th at http://www.pikeresearch.com/newsroom/electric-vehicle-charging-equipment-sales-to-reach-4-3-billion-worldwide-by-2017 entitled "Electric Vehicle Charging Equipment Sales to Reach $4.3 Billion Worldwide by 2017" noted that:

Sales of electric vehicles are expected to accelerate strongly over the next few years, and along with them will come rapid growth in deployment of charging equipment for the vehicles.  Two years from now, more than 80 different models of plug-in electric vehicles (PEVs) will be found on roadways across the globe, and by 2017, more than 5.1 million PEVs will be sold globally.  In many markets, the majority of customers who purchase a PEV will purchase charging equipment for their home.  At the same time, many cities and states are promoting the use of PEVs and installing EV charging systems as a means of reducing urban emissions.  According to a recent report from Pike Research, more than 1.5 million locations to charge vehicles will be available in the United States by 2017, with a total of 7.7 million locations worldwide.

This will translate into revenues of more than $4.3 billion for makers of electric vehicle charging equipment by 2017, the cleantech market intelligence firm forecasts, up from $400 million in 2011, representing a compound annual growth rate of 49%.

“Prices for EV charging equipment will fall by 37% through 2017 as costs are driven down by competition from large electronics companies as well as volume production,” says research director John Gartner.  “With each new electric vehicle model that gets launched, makers of charging equipment, city planners, and retailers gain an increased sense that EVs are here to stay.  This will encourage both the production and purchase of charging systems.”

The deployment of EV charging equipment will also have implications for electric utilities’ business models.  The impact of power delivered through EV charging units could shorten the lifespan of some neighborhood distribution equipment, such as transformers or power lines.  Some utilities are offering less expensive EV charging rates and time of use (TOU) pricing, with power purchased overnight costing a fraction of the peak power price.  The benefits of off-peak charging will encourage nearly all equipment purchases to be smart charging units that can be programmed remotely.  A number of pioneering utilities are beginning to invest in information technology (IT) and other smart grid equipment to accommodate the increased load.

Pike Research’s report, “Electric Vehicle Charging Equipment”, examines the growing global market for electric vehicle charging equipment and provides market analysis and forecasts for residential, workplace, public, and private charge points.  The study also analyzes the key emerging sectors of direct current (DC) charging equipment and wireless EV charging stations.  Key industry players are profiled and detailed charging equipment forecasts, segmented by world region and key countries, extend through 2017.  An Executive Summary of the report is available for free download on the firm’s website.

1 comment:

  1. I'm still eagerly anticipating developments for economic models. I think that the fact that it lessens oil consumption makes it worth the investment.
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