What Electric Car Forecasters Are Often Missing −



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Published on September 24th, 2015 | by Zach

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What Electric Car Forecasters Are Often Missing

September 24th, 2015 by
 

Electric car forecasts are a dime a dozen (actually, they cost a lot more than that, but they’re probably worth a dime a dozen). They often don’t account for the exponential growth that comes from disruptive technology. Some studies base growth on broad surveys of potential buyers… despite the fact that most people know very little (if anything) about electric cars, so can’t really answer such surveys in a useful way. They don’t yet realize the benefits of electric cars, and why they are more likely than not to go electric within the coming decade (my forecast for the majority of the population). Other studies just project linear growth based on historical data. But some do get the picture and reproduce it well for others to see.

A recent UK study (h/t Herman Trabish) stimulated this article, as it included a couple of key charts that show how I think adoption of electric cars is likely to occur. The projected adoption trend is based on different types of buyers jumping in at different phases of market growth. Their propensity to adopt this new technology is built on previous research examining the historical adoption trend of other technologies as well as particular issues unique to electric cars. Have a look at the charts that caught my eye:

EV Adoption 3

Selected findings from Element Energy (2011)

EV Adoption 2

Selected findings from Element Energy (2011)

EV Adoption 1As you can see, the charts don’t put a timeframe on things, but adoption is expected to really speed up at about 15% of the market. (Electric car market share in most countries is still under 1%, while it is way up at ~26% in Norway — approximately a year after it was at 15% there, incidentally.)

It’s hard to argue with the categorization and generic projection for how adoption will occur. The characteristics for early “pioneers” match early EV adopters very well, and seem logical.

The next phase (in many countries) will see “optimists” joining in, buyers with a lot in common with “pioneers” but also some differences that turn them into a separate group.

The pragmatists kick in once they see success for early adopters and see risk removed a bit. Then you slowly (er… quickly) go up through the ranks of people less capable or less eager to jump in early and buy a new technology.

It all makes a lot of sense in my eyes, and generally matches earlier efforts to categorize, graph, and forecast the phases of adoption of a new technology, like this graph from 1962:

EV Adoption 4

An important key here is that things seem to go slow up to about 15% adoption (and really slow up to about 1%), and then growth occurs at a much faster pace. You can think of how the adoption of cell phones, smartphones, computers, laptops, tablets, dishwashers, TVs, color TVs, flat-screen TVs, vacuums, and other technologies occurred… if you were around during the mass adoption of those new technologies and remember the transition, that is.

But this all skips over one key point: a new technology has to be better — much better, even — than the incumbent technology in order to follow this growth trend and take 100% of the market… or anything close to 100% of the market. And this is again a key point that market forecasters underacknowledge.

When it comes to personal transport, electric cars:

  1. are much more convenient the majority of the time — you spend a few seconds plugging in and then you go enjoy your dinner, hang out with family, do some work, or do whatever else you have on your agenda;
  2. offer a much nicer driving experience — providing instant torque that lets you accelerate off the line faster than any gasoline-powered car out there, while also offering a much quieter and smoother driving experience;
  3. typically require much less maintenance, which means fewer trips to the mechanic;
  4. is much cheaper to “fuel,” especially since they are much more efficient;
  5. come with big environmental benefits, keeping the air cleaner for people who care about healthy lungs, hearts, etc;
  6. come with big climate benefits, which any sane person should care a great deal about;
  7. and reduce our country’s reliance on oil, which many people care about.


 

The only real downsides of electric cars at the moment (compared to gas- or diesel-powered cars) are that they have somewhat higher upfront prices than comparably sized and internally equipped competitors, and they generally need to charge more often and can’t charge up as quickly. Regarding the former point, this cost comparison disregards the unique benefits of electric cars and the fact that we’re really comparing bananas and oranges — both fruits, but quite different fruits. Regarding the latter point, this is likely a challenge just about 5% of the time. Even then, we can often eat, sightsee, work, or do other things while we charge. Additionally, plug-in hybrids and extended-range electric cars eliminate the issue entirely.

To get to mass adoption, I think the upfront costs will need to come down, but I think the pioneers, optimists, and pragmatists will get us to that point naturally. Similarly, I think longer-range electric cars and many more fast charging options will be on the market by the time the masses will become aware enough of EVs to become potential buyers. And, again, plug-in hybrid electric cars and extended-range electric cars will fill the gap for those edge cases and edge customers who need some form of liquid fuel backup. However, at that point, I wonder how abundant gas stations will actually be….

Trying to put all of this into a projection of sorts for the United States, if you consider that we’ve gotten to ~1% of the new car market in ~5 years, we could perhaps hope to get to ~3% in another ~5 years, and then to ~15% in ~5 more years. Jumping from there to ~50% in another 5 years, approximately half of the new-car market would be electric cars by 2030.

Looking at world-leading Norway, I think we could see electric cars hit 50% of the new car market within 2 years.

This is all speculation, as all forecasts are. But I think it is built on a better premise than most electric car sales forecasts. Feel free to add to it and improve it in the comments below.


 

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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. Zach has long-term investments in TSLA, SCTY, FSLR, SPWR, SEDG, & ABB. After years of covering solar and EVs, he simply had a lot of faith in these companies and felt like they were good companies to invest in as a portion of his retirement strategy. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.



  • Alex Ruski

    great post

  • Guy Hall

    Changes over the next two years should trigger the start of the early majority. These changes have two major parts. First, the rollout, at least in California to supplement Washington and Oregon, fast chargers along the major corridors. The second, is the introduction of more affordable 200 mile range electric vehicles. These two, in concert, should provide an knee in the adoption curve.

    • I agree, but I’m not sure I’d classify them as “early majority.” As one of those graphs shows, that would be >16%. We are still <1%. That would be an insane increase in adoption. While I think EVs already are a better purchase option for the early majority (or more), I think it will take several years still before they realize this.

      • Guy Hall

        Actually if you exclude the pickup, minivan, and suv sales we’re about 5%. It’s possible that that number is for California. However if you look at the markets were really competing what is certainly doing better than 1%. Nonetheless I agree it’s still a long ways to go.

        • Yes, I’ve seen something like that but forgot about it. Is a good point. Perhaps I should even do a piece examining the market share of compact EVs in the compact class, since that is the one most of them fit in.

  • SparkEV

    “To get to mass adoption, I think the upfront costs will need to come down”

    Seeing how SparkEV with subsidy is CHEAPER than gas version of Spark (lease cheaper than $1500 used car) yet it lagged in sales, cost is not the main factor. SparkEV is quicker in 0-60mph than gas cars costing $6000 more, yet sales lagged. If it’s not price or performance, I suspect it’s the infrastructure. Without widespread DCFC, telling people it takes 6 hours to charge is not going to work when they’re used to drive-to-gas-station model of charging and completely unfamiliar with L2 charging at home.

    I think I sold EV to a guy who came up to me at the market DCFC asking how many hours I parked the car there. When I told him I plugged in and went to market for 15 minutes to get 65 miles range and it cost $1.50, he was amazed. When I told him about the low price and 0-60 in 7.2 seconds of SparkEV, he was about ready to go to Chevy dealer. That is, until I told him SparkEV is most likely sold out.

  • Tim Pynegar

    I would put myself in the pragmatists group and as soon as an affordable ev car with 200+ miles of range is available I’m getting it. The overnight charging doesn’t bother me as we get a cheaper rate for electricity at night anyway and there’s a reasonable fast charger network on UK motorways already. The performance isn’t an issue that really concerns me that much. The price is an issue but if you consider the reduced servicing cost, reduced fuel cost and reduced road tax then I can factor all those in and will pay extra for an ev.

    • I’m very curious about the categorization of people who will go for the Tesla Model 3, Chevy Bolt, etc. By just about every measurement, they are better (theoretical) options than gasmobiles, so they should be preferred by the masses, but the “early majority” probably still won’t buy them due to cultural inertia, lack of familiarity, fear of something different, but who knows? It’s very hard to predict.

      • Tim Pynegar

        A Tesla Model 3, Chevy Bolt or next gen Leaf is the kind of price range I’m looking at so I will get one in a couple of years, I would guess the “Anxious Aspirer’s” will be a couple of years after that as they will want to see that it actually works and that their friend has one etc so that would be roughly 2020 before these people start buying.

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