Prior EV market predictions by leading consulting and research institutes have been proven wrong by the slow sales of EVs in the market. Analysts have now begun to re-evaluate their judgements for market trends, presenting a more realistic view that the global EV market will probably endure a slower growth in the near future.

Many consultancies, market research institutes and EV websites have released their predictions regarding the EV market growth during the past few years. Most of these forecasts seemed to suggest that we have moved into the decade of EVs. However, slow sales growth of EVs in the market defied these predictions. Leading analysts have begun to re-evaluate their judgements for the EV market in the future.  

Reality vs. market predictions

In 2009, Pike Research anticipated the annual market for hybrid electric and plug-in electric vehicles to grow to 2.9m vehicles by 2017. IDTechEX also predicted that by 2025, 35% of all cars sold would be electric vehicles and pure EVs would account for 10%.  

According to Edmunds.com, electric vehicle sales only represent less than 1% of the current overall market. EV sales have been slowed by the lingering weakness of the economy. The fact defeats those positive predictions and made some of these consulting and research institutions modify their prior estimates. Boston Consulting Group revised its prediction for electric vehicles to make up between 6% to 8% of overall vehicle sales in 2020, to now 5% or even less. Morgan Stanley reduced its forecast for global EV market shares by 2025 from 8.6% to 4.5%. Pike Research that used to believe 2012 would be “make or break” for EVs also realised that EV sales are slower than expectations. 

EV market in 2012: slow to take off

Garvin Jabusch, chief investment officer at Green Alpha Advisors, describes the EV market in 2011 as “Nascent, tiny but growing”. According to KPMG’s 2012 automotive survey, despite continued heavy investment by automakers in electric vehicles, 65% of global automotive executives don’t expect sales of electrified vehicles to exceed 15% of annual global auto sales before 2025. If 2011 is a foundation year for EV’s uptake, it does not mean in 2012 EV would definitely take off. Although national governments around the world have unveiled many plans to improve EV infrastructure and stimulate EV purchase, and major car manufacturers have announced new EV models to provide even greater options for electric car buyers, market shifts from gasoline to electric can not be accomplished in an instant. As Kevin See, lead EV analyst of Lux Research, comments that it will be more of a slow ramp-up in sales of electric vehicles, not an explosive growth. 

The wide adoption of electric vehicles needs mature and cost-effective technologies, strong support of infrastructure, cooperation across the value chain and formalisation of the industrial standardisation. Today, the price of EVs is still high and its benefits such like lower fuel costs will not immediately make up the difference. Battery cost to some degree determines whether electric vehicles can be accessible to a greater percentage of consumers. 

As it seems, expectations regarding the market uptake of EVs are in the process of being lowered to a more modest but more realistic level to be in line with overall economic conditions and specific support schemes.