Pike Research Forecasts 1 Million Plug-in Electric Cars by 2016

By · August 23, 2011

First Chevy Volt deliveries

The first deliveries of the Chevy Volt in December 2010 were met with great excitement. But supply will remain extremely limited throughout 2011.

Nobody has a crystal ball clear enough to see how big the electric car market will be five years from now. But Pike Research, the Colorado-based clean tech analyst firm, has as much of a grasp on the EV market as anybody. I’ve come to see the firm’s forecasts as fair and reasonable—based on best currently available knowledge, rather than personal or political biases either for or against electric cars. In its latest forecast for electrified vehicles released this week, Pike’s Dave Hurst says that the United States will fall short of President Obama’s widely publicized goal of having 1 million plug-in vehicles on American roads by 2015. But just by one year.

Pike forecasts the number for cumulative sales of plug-in electric vehicles will be 667,000 by 2015. But the good news is that the annual market in 2016 will be 289,000, and will reach 303,000 by 2017. “Technically, our forecast says the U.S. will reach 1 million by 2017, but actually, we’ll come close to hitting it by the end of 2016,” said Hurst, the author of the report.

Demand Outstrips Supply

When I spoke with Hurst yesterday, he seemed disappointed that EV sales haven’t ramped up faster. “It’s a supply-side issue, not demand side,” he said. “We’ve seen so many delays in vehicle launches,” referring to delayed introductions from Ford, Mitsubishi, Coda and Fisker. As a result, Pike believes the total number of electric vehicle and plug-in hybrids sold in 2011 will be just 20,500. Through July, the tally was below 8,000 sales.

“The hard thing for me is, if I break it down by model, for the first half of 2012, there are only two models out there,” he said, referring the Nissan LEAF and Chevy Volt. Other models, such as the Fisker Karma and Ford Focus Electric will have arrived, but production will be low. “How are you gong to get big sales with just two models?” And the rollout of one of those models, the Chevy Volt, “looks like it’s botched at this point,” said Hurst. “Getting deliveries out to customers has been a lot slower than originally thought.” In July, General Motors sold only 125 Volts, down from 561 sales in June.

On the other hand, Hurst believes that the market will swing “wide open” in 2013, when new players including Volkswagen, BMW and Hyundai start selling plug-in vehicles. “Toyota is the sleeping giant here,” Hurst said, adding that, “Honda, based on the reputation for quality and strong environmental record, could also make a decent impact on the market by 2013.”

Not Quite 1 Percent

Still, even by 2017, Pike Research’s report, “Electric Vehicle Market Forecasts,” calls for pure electric cars to represent a mere 0.8% of the U.S. market, while plug-in hybrids will account for 1.2%. (At that point, gas-powered hybrids will make up 3.1%, according to Pike.)

“To me, the 0.8% figure for battery electrics doesn’t seem far-fetched,” said Hurst. He cited continued supply shortages through 2015, and the high price of many models. Vehicles like the $57,000-plus Tesla Model S, he said, will be priced only for a niche group of customers who can qualify for a bank loan for such an expensive vehicle.

He believes that sales of plug-in hybrids, with smaller batteries and therefore lower costs, will outpace pure electric cars. “The big reason that plug-in hybrids will be bigger sellers than battery electric vehicle is because of Toyota,” said Hurst. “If the Prius Plug-in Hybrid can meet expectations in terms of the Prius’s brand promise and price, that could convert a lot of Prius drivers to a plug-in.” There are more than 1 million owners of the gas-powered Prius in the United States. Hurst said the price of the plug-in Prius—which goes on sale next year—is not yet officially announced, but could dip below $30,000.

Some EV advocates might be disappointed to see the plug-in market at 2% of overall auto sales six years from now. But the rate of growth represents a faster ramp-up than conventional hybrids experienced. Ten years after hitting the market, regular hybrids still only represent about 2% of auto sales. Electric cars and plug-in hybrids would reach that level in seven years, and climb up from there.

Comments

· · 2 years ago

Modern auto plants employ flexible assembly such that multiple models can be produced on the same line. However, regardless of the product mix, the plant is still only capable of a specific amount of production. I believe the the slow ramp of the LEAF, as well as the Volt, were a result of these vehicles simply given lower priority in the production mix. In the case of the LEAF, just prior to it's launch the Oppama plant was also building the Juke. Nissan decided, due to the unforeseen success of the Juke, to allocate more production capacity and scale the Juke up quicker. Once that happened there was little capacity left in the Oppama plant to manufacture the LEAF. This is why only a few were produced in Dec 2010 and scaling didn't occur until spring. Then of course the earthquake hit in early Mar which delayed the ramp even further.

· · 2 years ago

I am not sure if Pike research has taken in account that after 2012 president Bachmann will lower gas prices to $2. That must cut into the plug in market somewhat ;).

· Norbert (not verified) · 2 years ago

Looking at the graph published over at greencarcongress, it appears that the world-wide (vs. US) numbers for pure EVs are consistently larger than those for PHEVs... however in each case, they are int he same ballpark.

· · 2 years ago

“Honda, based on the reputation for quality and strong environmental record, could also make a decent impact on the market by 2013.”

They have a strong environmental record ? I completely missed this about Honda.

The basic reason we can't forecast EV sales 7 years from now is that we can't forecast oil price (or for that matter availability). Afterall who in 2004 had forecast a 10% unemployment rate and a $80+ oil price ?

· omnimoeish (not verified) · 2 years ago

"They have a strong environmental record ? I completely missed this about Honda."

It's true, they are technically the most fuel efficient auto maker overall. It helps that they don't produce trucks and are relatively light on SUV sales besides being America's favorite SUV maker in the CRV (otherwise Toyota would be right up there with them if not past them).

As the article says, the wild card of wild cards is (since they all are still wild cards at this point) is Toyota. If the plug in Prius starts selling at 100,000 a year (definitely possible), then things look a lot different. I think if they market it well and keep the price low, they could get here. My parents have held off buying a "gas only hybrid" for 4 years so they can get a "real hybrid" aka one that is powered by the grid and gas. I don't blame them. I wonder how many others are thinking that way. It will be interesting to see how many EVs we have in 2015 because by then we will have models from almost every major auto maker (and the not so major ones like Fisker, Tesla, and and Coda) and all of the supply issues will long since have been resolved.

· · 2 years ago

"It helps that they (Honda) don't produce trucks"

Ridgeline.

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