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November 4, 2015 by Andrew Hill

From Fiction to Reality: The evolution of Electric Vehicles

Global concerns over environmental pollution, tightening emissions regulations and an increasing interest in new technologies, are all fuelling the evolution and acceptance of the Electric Vehicle (EV) as a real alternative to the traditional motor car. The industry as a whole is headed towards more sophisticated transportation solutions as societies become more responsible regarding environmental issues. It is therefore unsurprising that the majority of car makers, along with some new players, have responded with both new concepts and on-road vehicles that are gradually becoming more popular in many countries around the world.

EVs are the current industry solution to cleaner mobility. They have joined the “hybrid” vehicles that many automotive companies created by combining a deep knowledge of traditional combustion engines with new technologies, packaged in a variety of hybrid solutions. Being based on a more traditional concept, the hybrids were able to gain quicker acceptance amongst the buying public than the all new EV vehicles have. Demand and sales amongst hybrids accelerated more quickly than for EVs, as most consumers remain cautious. New types of vehicle bring with them new concerns, such as the limited range that can be covered on a single charge.  This remains the main reason behind the slow adoption rate when it comes to consumers making their buying decision.

However, JATO’s figures indicate that even if the electric vehicle is not the most popular mobility choice yet, sales volumes continue to grow steadily every year as more auto makers launch new cars powered by electric technology. In fact, sales have grown more than 50% every year since 2012, reaching a peak in 2014 when more than 200,000 EVs were registered worldwide.

EVs are still quite expensive and in many cases the ability to afford one depends a lot on government subsidies. The electric version of a car can cost up to 50% more than the equivalent version powered by a diesel engine. The big difference is the long term value for money that EVs offer, due to the very low running costs.  This is why some governments in mature markets help the industry with special regulations and taxation that allows the consumer to drive an EV with more benefits than just the zero-emission advantage. This is particularly true in Northern Europe where drivers of EVs can be exempt from paying purchase taxes or have access to bus lanes, for example in Norway. These measures have had a positive impact on registrations, but still the purchase price of electric cars is prohibitive in many cases.

Infrastructure is another barrier that deters potential customers from buying an EV. As petrol/diesel cars need the gas stations, electric vehicles require places or mechanisms to charge the batteries, and this has proved a challenge.

In terms of volume the US has traditionally been the largest market. The production of EVs started in California due to the special regulations and the new-technology industries that were born in the Silicon Valley. Last year around 62,000 pure EVs were sold in USA, accounting for 30% of worldwide sales. Sales in the region increased 32%, outpacing the positive growth seen around the worldwide market. It was followed by China, where the local car manufacturers work diligently with EV technology, in the world’s largest car market. Perhaps surprisingly the third place wasn’t occupied by another market dominated by automotive makers such as Japan or Germany, but by Norway! Sales of EVs here now outperform France, and Norway is fast becoming the largest EV market in Europe.

When looking at EV volumes sold by car manufacturer, the world’s largest, Toyota, VW and GM, have to share the limelight with other groups such as Renault-Nissan and some Chinese brands. In fact it is Renault-Nissan that leads the way in terms of commitment to EV technology, with the success of the Nissan Leaf, available in most mature markets. Sister brand Renault can also benefit from this and is starting to enlarge their EV range with the introduction of the ZOE subcompact. Amongst other brands, Tesla is of course one of the main players despite the fact that its only model, the Model S, is a premium car.

The future seems to be promising for EVs. New regulations, technology improvements and better macroeconomic conditions will help them to become even more popular as a real alternative to more traditional vehicles. A full report about recent trends, the performance of EVs within total market sales, and the makes/models impacting the EV landscape, will be published by JATO Dynamics for the Los Angeles Motor Show, taking place from November 17th until the 29th.

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