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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: Big freaking surprise!
By Moishe on 10/29/2010 10:21:28 AM , Rating: 2
I'm surprised at the shortsightedness of Western culture.

quote:
building a successful refinery for the metals can take 5 years or more.


Really? That's not very long at all. The fact is, the sooner you get started on a long term task, the sooner it will be finished. Some things take many years to complete. The trick is not to be into instant gratification and go ahead and do those things anyways.

We need more fossil fuel refineries and nuclear plants. Sure it might take 20 years, but that's no reason to NOT build them.

We need rare earth mines. Lets do it and stop letting our competitors get ahead. 5 years is nothing.


RE: Big freaking surprise!
By Reclaimer77 on 10/29/2010 7:17:17 PM , Rating: 2
quote:
I'm surprised at the shortsightedness of Western culture.


That's the same argument that's also used to not build oil refineries and tap into newly found oil reserves. 20 years ago they said "But that will take 20 years!!!"

But about the culture comment, excuse me? The "Western culture" outpaced the rest of the world in just about every category in a relatively very short time. What are you talking about? At 120 years old we had already eclipsed cultures that have been around for thousands.


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