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Electric vehicles: technology, markets and forecasts

Author:Samuel Fenwick
Source:GTForum15 Feb 2012
Electric VehiclesBarclays Capitaloil productsDemand
Assault and battery: should refiners fear the electric vehicle?


GTForum looks at the issues surrounding the electric car and what it might mean for the refining industry.

Electric vehicles (EVs) have the potential to work to reduce the long-term growth potential of the oil product market, particularly in the OECD, where high oil prices and relatively static wages are prompting consumers to consider alternatives in the search for lower running costs. In this article, GTForum takes a look at the current state of the EV market and recent forecasts regarding EV adoption.

The International Energy Agency expects sales of electric vehicles and hybrids, under its New Policies Scenario, to be well below the targets adopted by several countries for such vehicles to represent 2% of the global stock by 2020.

“Plans announced up to mid-2011 suggest that car manufacturers are likely to expand capacity in total to only 1.4 million electric vehicles per year by 2020, suggesting a wait-and-see strategy in a still nascent industry, which in turn could mean that countries would collectively achieve only 20% of their targets, with resulting oil savings of less than 80,000bpd,” the IEA says in its World Energy Outlook 2011. The targets, if achieved, would save up to 420,000bpd in 2020.

The agency notes that manufacturers would need to invest US$85 billion to 2020 to meet electric vehicle targets. Additional infrastructure costs to support recharging would cost around US$50 billion. “For electric vehicle adoption to become widespread, it is estimated that payback times will need to be reduced by a factor of about three to four, or mitigated by innovative manufacturer-consumer business models,” it says.

In its latest World Oil Outlook, Opec expects hybrids and plug-in vehicles to account for 15% and 20%, respectively, of new passenger car sales by 2035. “Their expansion will be spurred on by legislative targets imposed by regulators in a growing number of the world’s major consuming markets,” it says.

A Deutsche Bank report entitled Electromobility – falling costs are a must suggests that by 2020, battery electric vehicles could reach a share of new passenger car sales in the range of 6–8% in 2020, assuming high government subsidies and rapid technological progress. That figure drops to 3% if strong technical progress alone is the driving force behind EV adoption.

Barclays Capital is expecting the electric vehicle sector to grow at a CAGR of 45% over the 2012–2020 period, yielding 4.8 million units by 2020 globally, according to a research note dated November 2011.

In 2011, 43,000–44,000 electric vehicles were sold globally, says Anjan Hemanth Kumar, automotive and transportation team leader at Frost & Sullivan, in an interview with GTForum.

“It is niche today and we look at 2014–2015 as when electric vehicles will gain traction in terms of sales,” he says. Kumar predicts that in 2017, 2–2.5 million EVs will be sold commercially, constituting 2–3% of total global passenger cars and LCV (light commercial vehicle) sales. He believes that tighter CO2 tailpipe emission standards will require vehicle manufacturers to “drastically adopt EVs into their fleet” and that this will be one of the main drivers influencing the growth of hybrids and EVs. Kumar sees 2017–2018 as a critical point when widespread adoption of EVs will begin.



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