Demand for electric and hybrid cars has risen dramatically in recent years. The steady growth in this market is driven by a wave of new technologies, shifts in global competition and changes in public policy.
We have come to expect green vehicle development from nations like Japan, South Korea, China, Germany and France, but even lesser automotive powers are responding to this growing international demand. Public opinion is getting behind greener vehicles.
Governments and private enterprise are responding to this growing demand. Consistent with public policy initiatives all around the world, Russian President Dmitry Medvedev is joining the chorus of countries that see electric and hybrid vehicles as a fundamental part of the move to a low carbon economy. Russian car maker YAROVIT Motors and financial company Onexim Group are making an electric hybrid vehicle called the E-Mobile (or Yo).
Demand for greener vehicles is growing almost everywhere. Even in America, where the public has been brainwashed by Republicans and corporations that are beholden to the old energy economy, acceptance of the new environmental and economic realities is growing. According to a 2010 survey from Ernst & Young, nearly 30 million Americans would consider buying a hybrid or fully electric vehicle. The commercial transportation industry is also getting serious about greener vehicles.
A late-2009 report from Pike Research forecast that hybrid fleet sales would increase from 300,000 in 2009 to nearly 4 million hybrid vehicles by 2015. “Manufacturers are beginning to turn their attention beyond light duty vehicles to the efficiency opportunities for hybrid drive in heavy trucks,” Clint Wheelock, a managing director at Pike, said in the report. “For example, in North America nearly 10 percent of buses sold in 2015 will be hybrids.”
A new study by California-based J.D. Power and Associates indicates that battery-based vehicles are likely to capture 7.3 percent of the global automotive market. However, J.D. Power researchers say that several factors could radically increase that number. These factors include battery cost reductions, increases in petroleum prices and new government mandates.
In a speech at the Fortune Brainstorm Green 2010 conference, Ford Motor Co. Chairman William Ford outlined some of the key forces influencing the demand for green cars in the US.
Federal subsidies are critical because, as Ford explained, it is “really important that we are competitive as a nation in this really critical technology.” Removing subsidies would be a mistake because “that’s not what other countries are doing.”
China’s funding of green automotive tech makes China a competitive threat. “They all have plans to come over, and we would be absolutely crazy” to underestimate China’s affect on the US auto market, Ford said.
To make it easier to adapt to changing demand, Ford is developing common platforms using existing car models.
Due to increasing global urbanization automotive companies may consider alternatives to traditional ownership and leasing arrangements and provide “mobility as service,” such as car sharing programs.
However, there are limits to the number of battery powered electric vehicles that can be manufactured. Lithium is a key ingredient in advanced batteries. The future demand for lithium is expected to outpace supply. Companies like BYD are already looking for new sources of lithium. According to a European Commission study of raw materials for high technology goods, if drivers continue opting for battery powered electric cars, by 2050 the supply will not be able to keep up with the demand.
To achieve real market penetration greener vehicles must appeal to consumers through features, functionality and price. Creative innovation in both business models and technology, will drive demand in the greener car market.
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