OEMs aren’t backing away from non-fossil fuel vehicles

ZEVsGasoline prices may stay down for a while, but OEMs don’t seem to be backing away from producing zero, or near-zero, emissions vehicles. Industry forecasters tend to agree that green cars will make up a sizable percentage of global new vehicle sales in the fairly near future.

Here’s a snapshot of the latest news developments on this topic:

  • Honda is striving to produce two thirds of its new vehicles that will be electrified in some way by around 2030, according to Honda president and CEO Takahiro Hachigo. That will include hybrids, plug-in hybrids, battery-electric, and hydrogen fuel-cell vehicles. In 2015, Honda produced about 4.5 million vehicles worldwide; if Honda were to stay at that current production schedule, it would mean that nearly three million of its new vehicles would be electrified in some form. This will tie into the company’s plans to better allocate manufacturing around the world and reorganize its management structure, Hachigo said. It would also fit well into its corporate sustainability targets.
  • Toyota is moving in that direction, most likely without too many plug-in vehicles. Last October, the company announced in a report that it plans to sell 1.5 million hybrids globally by 2020 and more than 30,000 fuel-cell vehicles by that same year. It’s one part of a grander scheme to reduce its corporate carbon emissions 90% by 2050 from where it stood in 2010. Ramping up factories with renewable energy and hydrogen-based production methods will help the automaker hit that target. The plans so far don’t include any commitments to support battery-electric vehicles; but there’s always plug-in hybrids such as its Toyota Prius Plug-in. The company does want to get away from selling combustion-engine cars.
  • Bloomberg New Energy Finance released a study forecasting that 35% of new vehicles sold worldwide will have a plug by 2040. Pricing will be coming down as lithium batteries become more affordable. Long-range electric cars will cost less than $22,000 (in today’s dollars), according to the Bloomberg projections. Government policies in the U.S., China, and Europe will continue to be a big incentive for consumers and fleets to buy electric cars. Falling oil prices won’t play as big a role in the future as they do today as sticker prices on EVs start dropping, according to the report.
  • Lux Research still thinks we’re a few years out of the “EV Inflection Point” when plug-in cars (both battery electric and plug-in hybrid) make up more than 50% of new car sales. In the 2016 edition of the EV Inflection Tracker, Lux estimates that the EV Inflection Point is in the 2035-2040 time-frame. Lux is using EVs with greater than 200 miles of driving range at a price point of $35,000 or less as a benchmark for a significant acceleration of adoption. “Given the lack of any vehicles, let alone a wide variety, that meets these criteria, we’re far from the EV Inflection Point,” a Lux Research e-newsletter article says.
  • Volkswagen has been indicating for several months that electric vehicles (EVs) will be a solution to its current diesel vehicle reporting scandal. The U.S. Environmental Protection Agency seems to agree. EPA has asked Volkswagen to produce EVs in the U.S. as a way of making up for its rigging of emission tests, the German newspaper Welt am Sonntag reported. The article said EPA has asked VW to produce electric vehicles at its plant in Chattanooga, Tenn., and to help build a network of charging stations for EVs in the U.S.
  • Europe is a growing market for EV sales. Europe has seen substantial growth in EV sales; at about 75,000 new vehicles registered, it was nearly 50% higher last year in sales than was seen in the 2014 numbers. Seven of these European nations made a top 10 EV global sales list for last year with Norway, France, the U.K., and Germany accounting for about 75% of all registrations/sales for the year.
  • Navigant Research’s John Gartner anticipates that sales volume will go back up in the next couple of years. By 2017, there will be several new EVs for consumers to test drive from Audi, BMW, Ford, GM, and Tesla. Expansion of the charging infrastructure is likely to increase EV adoption, as well. Survey results from Navigant have shown that U.S. consumers see the availability and inconvenience of charging EVs as the main reasons not to switch from gasoline to electric-powered cars.
  • In its “Cars 2025” study, Goldman Sachs predicted that a quarter of new vehicles sold will be hybrid or electric. “Regulations on fuel economy and CO2 emissions are forcing carmakers to make engines more efficient. By 2025, 25% of cars sold will have electric engines, up from 5% today. But most of those will be hybrids, and 95% of cars will still rely on fossil fuels for at least part of their power,” according to the report.
  • Daimler is playing a reticent role in supporting clean vehicle technologies. Daimler CEO Dieter Zetsche said the company has ruled out investing in battery cell production for EVs with other German premium brands for at least another few years. He thinks that massive overcapacity in the market that has turned cells into a commodity. German automakers have not been creating as supportive a market for EV sales growth within that country as have other European markets. Daimler has also been behind on fuel cell vehicle support – not selling that many of them even though it has been producing and marketing its own fuel cell car. It’s also been interesting that Daimler has been a large investor in Tesla Motors but is not doing very much with Tesla’s technologies. Daimler is using the Tesla drivetrain in its electric Mercedes-Benz B 250 e model. It’s become a more sensitive issue in Germany since November when Tesla CEO Elon Musk said that the German government had approached Tesla to discuss state subsidies for building a battery plant in the country. Japan has been a much larger producer of EV battery packs. Battery cells used in plug-in hybrid models made by German automakers including the Audi A3 e-tron and BMW i3 battery-electric car come primarily from Asia; in these two cases from Panasonic and Samsung SDI, respectively.

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