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Study: E-cars are still too expensive

Posted: 14 Sep 2009 ?? ?Print Version ?Bookmark and Share

Keywords:e-car? electric vehicle? hybrid electric vehicle? automotive?

Despite all efforts to reduce the costs of electric vehicles and hybrid electric vehicles, the automobiles will remain more expensive than their conventional competitors for a very long time, a study from consulting group Oliver Wyman reveals. Nevertheless, the costs for e-cars will sink disproportionally fast.

While electric vehicles will be able to conquer a market share of a mere 3 percent over the coming 15 years, they will become the decisive factor for the long-term survivability of the car manufacturing industry in Europe, the study says. The changeover towards e-cars and hybrid drives will require unprecedented investments, but the commercial yield will remain very low during this phase.

For 2010, the study predicts a market share of only 2 percent for all flavors of hybrid vehicles and e-cars sold. By 2025, their share will climb to 16 percent. Thus, conventional vehicles will continue to dominate the market even in the more distant future. However, the thrust to establish more environment-friendly e-cars and hybrid vehicles will continue, as can be seen by the global R&D efforts in this segment: Over the next ten years, investments aiming at reducing CO2 emission will amount to ?300 billion ($427.73 billion) globally. 50 percent of these moneys will be used to develop alternative drive technologies.

Key factors for the acceptance of electric cars are driving range and costs. According to the Wyman study, only 13 percent of the potential customers would accept a range of below 250 km.

With regard to the other critical factor, the production costs (including material), the perspectives are equally difficult. Only 14 percent of the clientele would be willing to pay more for an e-car than for a conventional one. This is where the trouble for the industry begins: Today, manufacturing costs (including material) for an electric car are 150 percent above the comparable costs for a conventional vehicle. Despite drastic price and cost reductions, in 2025 the market researchers expect the manufacturing costs for electric vehicles still to be 60 percent higher than the costs of comparable cars with combustion engine.

Nevertheless, technologies associated with hybrid drives will gradually enter car design and manufacturing. By 2025, mild hybrid will be a kind of basis technology for medium to large size vehicles. Fully hybrid will become a feature associated to SUVs in the first place, the researchers say.

While vendors won't be able to achieve profits with e-cars for many years, there will grow a market for innovative power train components, including Li-ion batteries, electro motors and high-voltage power electronics. By 2025, the market researchers estimate the volume of this market to amount to about ? 80 billion ($114.06 billion), or 7 percent of the entire component value creation of the automotive industry.

- Christoph Hammerschmidt
Automotive Design Europe

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