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.
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.
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
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
quote: building a successful refinery for the metals can take 5 years or more.
quote: I'm surprised at the shortsightedness of Western culture.