Friday, October 16, 2009

Predicting the 2020 EV Market: Consider the Wild Cards | BNET Auto Blog | BNET

Predicting the 2020 EV Market: Consider the Wild Cards | BNET Auto Blog | BNET: "It’s always fun to predict the future, and the beauty is that if you are projecting far enough ahead no one’s likely to remember what you’d said—even if turned out to be egregiously wrong.

How many battery electric vehicles, plug-in hybrids and just plain hybrids will sell in 2020? I can make only educated guesses, which is also the case for Lux Research, which just released its latest report, “Unplugging the Hype Around Electric Vehicles.” In that study, it predicts the size of the market based on different oil-price scenarios. Roughly, the higher the oil price, the more EVs will be sold. If oil reaches $200 a barrel by 2020, for instance, Lux thinks that light plug-in hybrids will be the best-selling EVs in the U.S., with a million units sold annually. “At lower oil prices, plug-in hybrids and battery electrics languish.”

Even a million EV cars and trucks is not a lot when you consider that the entire auto market today is around 10 million (down from 16 million annually). That’s a dent, but not a huge one.

My problem with Lux’s analysis here is that it assumes that car sales are wholly based on the fluctuations of the free market. Much as we all may want to keep Adam Smith’s dream alive, there are other factors at play, especially with EVs. A market-only scenario, for instance, discounts the role of such physically unavoidable barriers as peak oil and greenhouse gas buildup. Both have already influenced the “free” market."

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