Limited uptake
The manufacturers themselves are less keen on being made to switch. "Currently the reality is that the market uptake of electrically chargeable vehicles is low, and this is not due to lack of availability and choice," Daimler CEO Dieter Zetsche said last September. Zetsche was speaking in his role as president of the European auto industry association, ACEA, which continues to press the European Commission to relax the pressure to electrify by softening the 2030 emissions targets. ACEA proposes a 20 percent cut instead.
In June, ACEA again attacked the commission over electric cars, warning that "affordability is a major barrier to customers." The manufacturers' group contends that EV growth is occurring only in rich countries such as Norway, where average gross domestic product is twice the EU average.
As an example of that barrier, ACEA singles out Estonia, where just 43 plug-in hybrid vehicles were purchased in 2017. "A forced push for electrification could lead to social exclusion in these countries," ACEA wrote in its report, "Making the Transition to Zero-Emission Mobility."
The association, which speaks for all European automakers, repeated Zetsche's point about slow acceptance of EVs. "Consumers looking for an alternative to diesel now often opt for petrol vehicles or hybrid ones but are not yet making the switch to electrically chargeable vehicles on a large scale," ACEA wrote. Last year the market for plug-in vehicles was just 1.8 percent of the total market, according to figures from market analyst JATO Dynamics. At its current low rate of growth, ACEA argues, the market share would be 3.9 percent by 2025 and 5.4 percent by 2030.
Infrastructure issues
ACEA said that the lack of charging stations is holding back sales. It calculates that at least 2 million chargers will be needed by 2025 to service the demand forecast by the EU. Of the nearly 100,000 charging points currently available, ACEA says, 30 percent are in the Netherlands and 22 percent in Germany. Romania, by contrast, has just 116 stations.
ACEA Secretary General Erik Jonnaert called on the EU to force its member states to increase the number of publicly available charging points. "Without this, consumers will never be convinced to make the switch to electrically chargeable cars on a large scale," Jonnaert said.
The automakers' EV pessimism, as expressed through their European association, contrasts sharply with their public enthusiasm. But analysts and the automakers think the market for plug-in vehicles will grow sharply anyway. The consulting firm AlixPartners forecasts that plug-ins, both battery-electric vehicles and plug-in hybrid EVs, will account for at least 20 percent of European sales by 2025, beating the European Commission's 15 percent benchmark.
The VW Group has reached the same conclusion, telling the analyst firm UBS this year that it predicts the split in 2025 will be 12 percent BEV (battery-electric vehicles) and 8 percent PHEV (plug-in electric vehicles). The VW Group consistently has said it thinks a third of its sales will be pure EVs by 2025. The analyst firm LMC Automotive thinks the 2025 figure will be 18 percent, split between 11 percent BEV and 7 percent PHEV for a total market of 3.7 million vehicles.
By 2020, LMC estimates, the market for EVs will quadruple to 1.15 million, up from 280,767 last year. It thinks plug-in hybrids will remain ahead at just over half the total before being overtaken in the subsequent five years as BEVs become more affordable and the charging network expands.
Massive investments
The investment being poured into electric cars is immense. FCA, for example, plans to devote 20 percent of its total capital expenditure budget up to 2022 (9 billion euros or $10.5 billion) to developing electrified vehicles. By 2022, FCA expects 40 percent of its European vehicles to be mild hybrids, 20 percent "high-voltage electrification" (BEVs or PHEVs) and 40 percent nonelectrified.
Globally, automakers and suppliers are investing $255 billion in electric vehicles up to 2022, compared with around $25 billion in the previous eight years, AlixPartners has calculated. The money will not just go into the drivetrains but also into trying to make the EV driving experience superior to that of conventional combustion engines -- key to stimulating demand.
UBS reports that the first of the new-generation VW electric cars -- the I.D. Neo, arriving in 2020 – will come with augmented-reality head-up display and optional inductive wireless charging. The Porsche Taycan will use an 800-volt system for ultrarapid charging (10 to 15 minutes) and consistent rapid acceleration without sacrificing on performance.
Autonomous technology increasingly will be part of electric cars. For example, the BMW iNext SUV, scheduled to be launched in 2021, will be "fully electric, fully connected and also offer highly automated driving," BMW CEO Harald Krueger said in May.
