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Europeans Reject Electric-Only Cars, But See Hybrid Case

“Electric car sales pace, far from growing, is slowing”

Europeans Reject Electric-Only Cars, But See Hybrid Case

Almost nobody in Europe wants to buy an electric car, but luckily for the manufacturers which need to sell alternative vehicles to meet harsh government regulations, there is a little bit more enthusiasm for hybrids.

That’s the conclusion of a new report from management consultants PwC’s “Autofacts” monthly publication.

Electric-only cars are too expensive, but hybrid cars are seen as better value for money. Neither will be presenting much of a challenge to gasoline or diesel powered internal combustion engines any time soon, the report said.

The report canvassed 1,500 people who were planning to buy a new car within a year in Germany, Britain and France. Those thinking about an electric-only battery car added up to barely perceptible one per cent overall, although this doubled to two per cent in France.

“This sentiment is echoed in current year new car registration statistics, where a collective 17,500 pure EVs were sold across all three markets out of a total of seven million vehicles sold – that’s 0.25 per cent of all new car registrations,” the report said.

That finding fits snugly with other published statistics.

According to British based Automotive Industry Data (AID), electric only vehicle sales in Western Europe in August sales for the third month in a row to 4,045 from 4,381 the previous month and 5,350 in June. In the first eight months of 2014 sales jumped to 35,228 from 20,052 in the same period of 2013, but the growth pace was fading, according to AID, in a report entitled “Electric car sales pace, far from growing, is slowing”.

Electric vehicle market share in Western Europe in the first eight months was 0.44 per cent compared with 0.26 per cent in the same period of 2013. But these numbers are distorted by oil-rich Norway’s simulated love of electric cars. Electric car sales there are boosted by government subsidies, and parking and charging concessions. Without Norway’s input, the market share figures for Western Europe are a derisory 0.28 per cent versus 0.22 per cent, according to AID. The numbers include sales of the Nissan Leaf, Renault Zoe, Tesla Model S, VW e-Up, e-Golf, and BMWi3. They also include the Chevrolet Volt/Opel Ampera, which are extended range electric vehicles.

U.S. sanguine too
U.S. buyers are not showing much more enthusiasm either. The market penetration of electric only vehicles in the first nine months of 2014 was a barely perceptible 0.35 per cent, according to AID.

The report from PwC said 21 per cent of respondents to the survey would consider a petrol-electric hybrid. Sales this year in the three countries were 102,500 for a 1.5 per cent market share.

“This development bodes well for (manufacturers) in Europe, given the demanding CO2 emission targets in coming years,” the report said.

European Union (E.U.) rules require an average fuel consumption equivalent to 57.4 miles per U.S. gallon by 2021. The regulations are even more stringent than the U.S. ones, which demand 54.5 mpg by 2025. Current E.U rules require 43 mpg by 2015, and most manufacturers are on course to meet that. The tougher 2021 E.U. targets though will require massive sales of electric only, hybrid and plug-in hybrid vehicles.

The survey found that the price of electric vehicles was significantly higher than their conventional counterparts. In Germany prices of electric vehicles start at around 35,000 euros ($44,000), it said, and were competing in sectors with prices ranging from 10,000 to 30,000 euros ($12,500 to $37,700). German prices are quoted after tax.

Bad news for Renault
This is bad news for the French-Japanese alliance of Renault and Nissan, which pledged $5 billion to produce electric cars and batteries to meet its prediction that 10 per cent of global car sales will be electric only by 2020. That estimate has proved to be wildly and embarrassingly off the mark. According to IHS Automotive, regular hybrids and plug-in hybrid electric vehicles (PHEV) will prove relatively more attractive than battery only vehicles, in the medium term, although neither will be setting the sales charts alight. By 2020 regular hybrids and PHEVs will account for almost five per cent of global sales compared with less than one per cent for electric only vehicles.

By 2025, battery-only will have slowly expanded to 1.5 per cent, while PHEVs and hybrids will stagger just past six per cent, IHS Automotive says. Fuel cell vehicles, now being pushed by Toyota, will barely register at all by 2025. In 2013, both battery-only and PHEVs barely registered on global sales radar.

It’s clear that internal combustion engine power will dominate for years to come. The recent sharp fall in the oil price is another nail in the coffin for the short-term future of electric only cars.

There are some organisations though carrying torches for electric cars.

Ratings agency Standard & Poors, in a report on electric cars, said because of recent improvements in battery technology, these vehicles could begin to cut into gas-powered vehicle sales in the U.S. over the next five years.

That might happen in the U.S., but in Europe the PwC report said consumers preferred internal combustion engines and vehicles which produced good fuel economy, but not with electric only vehicles.

“Though price remains a significant component in purchasing decisions, other criteria factor into the inability of EVs to truly break through as the mainstream, standard option for the average consumer in Europe,” the report said.

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