Is Demand For Electric Cars Overhyped? J.D. Power Thinks So

By Antony Ingram

Antony Ingram

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Antony is an automotive obsessive: Whether it drives, sits there looking pretty or intrigues from afar, he'll talk and write about it. Automotive... More

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With a fanfare going up for every new electric car that hits the market at the moment, you'd be forgiven for thinking we're only a few short steps away from widespread EV adoption.

According to marketing information services firm J.D. Power though, this might not be the case. According to the company, hybrids and electric vehicles may only capture 7.3 percent of global automotive sales by 2020, up from the current figure of 2.2 percent.

This is in contrast to estimates made by EV advocates such as Renault-Nissan's CEO Carlos Ghosn, who estimates that fully-electric cars alone would make up 10 percent of the market by 2020. Following the latest estimates of around 5.2 million electric and hybrid vehicle sales out of a predicted 70.9 million total auto sales, it's looking a long way off yet.

However, the figures do hinge on China's adoption of EVs. The emerging commercial superpower is pushing hard to produce electric vehicles to offset the huge pollution problems the country may face if living standards continue improving and more of China's 1.3bn population are able to afford cars.

Should demand in China increase, the 7.3 percent estimate could be beaten. The country is still at a comparatively early stage in transport infrastructure and has the opportunity to bias their network towards electric vehicles.

At the moment, hybrid and electric cars are very much niche products and according to J.D. Power, often bought by people who are older, more educated and have higher incomes than the average consumer.

“Many consumers say they are concerned about the environment, but when they find out how much a green vehicle is going to cost, their altruistic inclination declines considerably” reasons John Humphrey, senior vice president of automotive operations at J.D. Power.

The trouble is when consumers learn the cost of EVs, meaning interest in a particular vehicle drops as much as 50 percent. They're also concerned about looks and design, reliability and performance, as well as the old chestnuts range and charging time. The price can be partly addressed by government and local incentives, and as our sister site GreenCarReports has discovered, if you're clever you can get your hands on a Leaf for little over $12,000...

Only time will tell if EVs take off as quickly as some commentators are saying they will, and should China gain foothold in the industry as quickly as they're intending then we might even see figures greater than the 10 percent that Carlos Ghosn is touting, but as with any area of business, it remains hard to predict.

Humphrey adds, “Consumers will ultimately decide whether these vehicles are commercially successful or not".

[Bloomberg]