Slow growth expected for electric cars

John Egan

Some consumers may be charged up about electric cars, but they shouldn’t expect electric cars to race ahead of gas- and hybrid-powered vehicles anytime soon.

That’s according to a new survey by consulting giant KPMG International of 200 automotive executives in 31 countries.

“The changing views on pure hybrids, plug-ins, fuel cell and battery-powered vehicles reflect the uncertainty as to which will be the dominant technology,” Mathieu Meyer, KPMG’s global head of automotive, says in a news release. “In the short term, the individual driver is likely to prefer a hybrid, whereas fleets may opt for electric cars. However, it seems that pure electric vehicles power will not prevail, at least in the next decade.”

A little more than half of the executives surveyed said improvement of gas-powered (internal combustion) engines offer the best potential for clean, efficient engines over the next six to 10 years. “This a quite a turnaround in direction,” Meyer says, “and a sign that some of the newer technologies are taking longer than expected to emerge.”

About one-fourth of the executives said they’ll invest in plug-in hybrid technology, while just 8 percent said they’ll invest in electric-only technology.

Thirty-six percent of those surveyed said they expect high consumer demand for plug-in hybrids over the next five years, with non-plug-in hybrids coming in a 20 percent and electric-only vehicles at 11 percent.

In 2012, about 53,000 electric cars were sold in the U.S., according to an estimate from Green Car Reports. That’s about triple the number sold in 2011. Worldwide sales of electric cars are expected to reach 3.8 million in 2020, according to a forecast from Pike Research.

In a news release, Dave Hurst, senior research analyst at Pike Research, says sales of electric cars “have not lived up to automakers’ expectations and politicians’ proclamations, but the market is expanding steadily as fuel prices remain high and consumers increasingly seek alternatives to internal combustion engines.”

Nonetheless, he says, sales of plug-in electric cars will grow nearly 40 percent a year during the rest of this decade.

Research company Mintel says U.S. sales of hybrid and electric cars jumped 73 percent in 2012, with about 440,000 sold. Mintel forecasts sales of hybrid and electric cars will surpass 535,000 by the end of 2013 and reach 850,000 by 2017.

“The ‘live for today’ mentality that prompted the rise of SUVs has disappeared. Consumers today demand products that promise protection and durability,” Colin Bird, automotive analyst at Mintel, says in a news release.

“There is a new mentality that emphasizes preparing for and protecting against potential future disasters such as another oil shock or even just steadily rising prices at the pump,” he adds. “Hybrid and electric cars might be positioned to help consumers weather the storm of future spikes at the pump and they might be marketed as long-term investments that can help consumers protect against likely increases in gas prices.”