ALEXANDRIA, Va. - While car companies and even countries have recently pledged to go all-in on electric vehicles (EVs), market conditions will make it difficult for EVs to gain 2% share of vehicles on the road by 2025, according to a new study released today by the Fuels Institute. Yet, projected consistent growth in sales indicate the potential for greater market impact in the years that follow.
Even using the most optimistic scenario for EV sales-assuming high oil and low battery prices-EVs will comprise at most 5% of new car sales by 2025, according to "Tomorrow's Vehicles," which uses analysis based upon sales and registration forecasts provided by Navigant Research. The report includes three publications focusing individually on fuel consumption, light-duty vehicles and medium- and heavy-duty vehicles, with projections for both the United States and Canada.
Many recent announcements related to the future of EVs include pure electric, plug-in hybrid and traditional hybrid vehicles. Yet, even when considering all three forms of electrified powertrains, the share of vehicles sold in 2025 that might be so equipped is projected to be less than 12%. Meanwhile, in terms of vehicles on the road, electrified options will account for less than 6% of the entire fleet.
"There is significant growth expected for sales of electrified vehicles," said John Eichberger, executive director of the Fuels Institute. "But even when adjusting the assumptions to create a more optimistic scenario for these powertrains, Navigant Research projects their market penetration by 2025 will remain extremely limited. It will not be until after 2025 that the impact on the market will be felt. The compounded influence of consistent growth rates in new vehicles sales is positioning electrified vehicles to have a greater influence on the market in the 2030s."
Through 2025, vehicles powered by liquid fuels (gasoline, diesel, flex-fuel vehicles and traditional hybrids) will still account for more than 96% of vehicles on the road in the United States, with the balance comprised of battery electric, plug-in hybrids and a mix of hydrogen, natural gas and propane powered vehicles. While this represents a slight drop in overall market share, it remains an overwhelmingly dominant share of consumer demand.
"The traditional transportation energy delivery system will continue to satisfy consumer demand for decades to come," Eichberger continued. "Meanwhile, the systems necessary to serve an emerging electric transportation market can be developed. Consumers should be confident that their transportation needs will continue to be met without interruption as the transportation market slowly transitions to include a more diverse energy supply."
"With more than 272 million light duty vehicles in North America - more than one per licensed driver - the composition of the existing market will be slow to change," Eichberger explained. "There is a lot of enthusiasm for growth in the alternative vehicle market, and with good reason. But bringing these new technologies to market and selling enough of them to influence a change will take time. The seeds of growth have been planted and, if sales expansion rates can be sustained, these alternatives will have a long-term impact on the market."
In "Tomorrow's Vehicles," the Fuels Institute analyzes sales and registration forecasts for two potential market scenarios (Base and Aggressive, with the latter assuming higher oil and lower battery costs). For both the United States and Canada, for each category of vehicle (light-, medium- and heavy-duty), the report evaluates sales and registrations for each powertrain category: gasoline, diesel, flex fuel, hybrid, plug-in hybrid, battery electric, natural gas, propane and hydrogen.
The full report and executive brief of "Tomorrow's Vehicles" can be downloaded free-of-charge at www.fuelsinstitute.org/research
The Fuels Institute, founded by NACS in 2013, is a non-profit research-oriented think tank that evaluates market issues related to vehicles and the fuels that power them, incorporating the perspective of diverse stakeholders to develop and publish peer-reviewed, comprehensive, fact-based research projects. The Fuels Institute is a non-biased organization that does not advocate.