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A new J.D. Power report says that companies like Nissan are being overly bullish in their estimates of consumer electric vehicle demand.  (Source: Autoblog)
Report says that demand will be 7.3 percent by 2020, falling short of other estimates

Nissan-Renault Chief Executive Officer Carlos Ghosn recently made the prediction that electrified vehicles -- hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and battery electric vehicles (BEVs) -- would make up 10 percent of total vehicle sales by 2020.  Other EV supporters have released even higher numbers of what the electrified vehicle market share might be at the turn of the next decade.

Not so fast, says market research and analysis firm J.D. Power and Associates.  According to its new report, electrified vehicles will likely only amount to 7.3 percent of vehicles sold in 2020.  That would mean that 5.2 million of the 70.9 million passenger vehicles sold that year would be HEVs, PHEVs, or BEVs.

John Humphrey, senior vice president of automotive operations for J.D. Power remarks on the less promising forecast, "Consumers will ultimately decide whether these vehicles are commercially successful or not. Given consumer attitudes toward such vehicles and barring significant changes to public policy, including tax incentives and higher fuel-economy standards, we don't anticipate a mass migration to green vehicles in the coming decade."

Price and self-interest will be the driving factors for slower-than-expected adoption, says the report.  States Mr. Humphrey, "Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably. In the U.S., the number of people who say they’re interested in buying a hybrid drops 50 percent when they learn such vehicles typically cost about $5,000 more than equivalent models with gasoline engines only."

The report brings into question the billions in investment that the U.S., China, and other industrial powers are pouring into electrification research.  The Obama administration alone has offered $11B USD in EV-related grants.

It also calls into question Nissan's plans to quickly scale production of its new Nissan LEAF EV from 20,000 units in 2011 to 500,000 units a year by late 2012.  Toyota (Prius MPVPrius plug-in), Ford (2012 Focus EV), and GM (2011 Chevy Volt) are all betting on EVs as well.  Poor demand could force those companies to readjust their plans.

Another danger to electrified vehicles not fully explored in the report is the potential for China's dominance of rare earth metal refining to impede adoption.  China is currently cutting off supplies of rare earth metals to China and the U.S.  Electrified vehicles use twice the rare earths, approximately, than pure combustion vehicles.  Thus supply shortages could limit production.

The U.S. and Japan are reopening rare earth mines around the globe, but that is expensive.  And building a successful refinery for the metals can take 5 years or more.  Ultimately these costs will likely be passed on to the consumer, exacerbating the pricing frustration that the J.D. Power report points to.

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RE: Work From Home
By Spuke on 10/28/2010 11:44:35 AM , Rating: 1
Implement a Work From Home program reducing traffic and rare earth material requirements.
The US Government is already supposed to be doing this for their employees but are leaving the decisions for who works from home up to local management. And most local management believes one needs to come to the workplace and does not grant work at home for hardly anyone. I know ONE person that works at home.

There tons of employees that can work from home, IT, legal, engineering, etc. Not only would it save energy costs but would save building costs as well. I understand some will say that you're just transferring energy usage to the home but....

1. energy saved by not driving
2. energy and materials saved by not building as much as needed before
3. energy saved going from huge buildings to much smaller homes (might be a wash in some cases)

RE: Work From Home
By mmcdonalataocdotgov on 10/28/2010 11:53:07 AM , Rating: 1
I agree. However, even though I telework, I still need my own car. So this might not save on the number of vehicles needed to fill consumer demand. I just use the car less. Rare Earth (not rare earths, people) would be required in the same quantity unless people would buy fewer cars. Most telework schemes are 1, 2, or 3 days a week, not 5.

RE: Work From Home
By mindless1 on 10/28/2010 2:02:43 PM , Rating: 2
*Average* people would buy fewer cars because the less you drive the longer the car lasts... till it's so old it is a pile of rust.

Driving less also means fewer gas stations, fewer gas delivery trucks, fewer other public infrastructures like roads are needed, or need less maintenance.

It all starts with consuming less, no matter what that something is we live in a machine powered world so there will almost always be a trickle down effect of fewer rare earth metals needed.

... then a bonehead administration comes along with a scheme to pay people to destroy cars.

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