Plug-In Electric Vehicle Market Rise Assisted by Technological Innovation & Policy

on February 06, 2014 at 10:00 AM

Telsa Motors Opens New "Supercharger" Station In Fremont, California

Fueled by technological innovation and favorable state policies, the plug-in electric vehicle market surged in 2013, with year-over-year sales increasing 83%.

In its first full year on the market, Tesla Motors reported global Model S sales of 22,300 units for 2013. Most recently, Tesla beat fourth quarter sales estimates of under 6,000 by delivering 6,900 Model S vehicles. This also depicts a 25 percent improvement over the same period in 2012. Tesla’s Model X midsize crossover is slated to enter debut in early 2014. In 2013, we saw a steady price decline in plug-in vehicles such as the Chevy Volt, Nissan Leaf, Ford Focus Electric, and Mitsubishi I. The figure below shows cumulative Plug-In Vehicles sales.

With software developments further supporting better fuel economy, and battery costs falling drastically since 2011, future price reductions seem likely. This has come as a result of increasing R&D expenditure by major automotive vehicle companies supported by greater government research subsidies to help lower production costs. This price reduction has led to remarkable growth especially from 2012 onward. As we see drastic growth in this market compared to recent years, we can attribute this to mainly technological improvements that are substantially reducing production costs and consumer prices.

Cumulative U.S. Plug-In EV Sales (Historical + 2012-2013) (Electric Drive Transport Association)

Cumulative U.S. Plug-In EV Sales (Historical + 2012-2013)
(Electric Drive Transport Association)

The public sector continues to provide added benefits for plug-in vehicle users through access to HOV lanes, adaptability to mega storms that can leave gas stations unusable, and free parking in many cities. A cooperative agreement was signed by the Governors of California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont to expand consumer awareness and demand for zero-emission vehicles. Portions of the agreement include harmonizing building codes to streamline electric car charging station production, evaluating cheaper electricity rates to promote home electric car charging system purchases, in addition to promoting zero emission vehicles within each states’ public fleet. All eight states are among a group that have adopted rules requiring approximately 15% of new vehicles by 2025 to be zero emission vehicles. Collectively, the eight signatory states are representative of more than 23 percent of the U.S. car market, and estimate to have at least 3.3 million of these vehicles operating on their roadways by that time.

February 4, 2014 via Energy Solutions Forum

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