Green cars to make up third of vehicle sales by 2020

28 May 2010

Electric vehicles and green mobiles will represent up to a third of total global vehicle sales by 2020, according to new research by Deloitte.

Circa US$44bn in economic stimulus funds and other incentives is being directed at the development of alternative fuel and advance technology vehicles, that’s according to the Driving e-mobility report by the Deloitte Touche Tohmatsu (DTT) Global Manufacturing Industry group, which has just been released.

According to Deloitte’s ‘Driving e-mobility‘ report:

·    Economic stimulus packages and other government programmes are being emphasised in at least 13 markets.

·    The US is leading in terms of economic stimulus and other government incentives, with an estimated US$27.4bn being directed towards alternative fuel technologies such as electric vehicles (EVs).

·    While hybrids and EVs represent a small fraction of total cars on the road today, the DTT Global Manufacturing Industry group estimates that by 2020, electric vehicles and other “green” cars will account for a third of total global sales in developed markets and up to 20pc in urban areas of emerging markets.

Consumer demand for greener motoring

“Consumer demand for greener vehicles as well as new regulations will heavily influence the development and marketability of innovations in the automotive industry,” says Susan Birrell, partner, Consumer Business, Deloitte Ireland.

“Here in Ireland, in addition to the car scrappage scheme introduced in the last Budget, the Government has recently introduced grants of up to €5,000 for those motorists who buy electric cars. In addition, they will also be exempt from paying vehicle registration tax (VRT).

“What’s more, with the ESB having committed itself to providing charging points by the end of next year, Ireland is among the leaders in making EVs a realistic alternative.

With last Friday’s announcement that a fleet of electric cars will take to the roads next year as part of a trial examining motorists’ behaviour, Birrell said incentives such as these will play a “significant role in driving consumer demand for these vehicles”.

In 2009, Deutsche Bank estimated that global sales of electric, hybrid, and other alternative fuel and advance technology vehicles stood at one million and could rise to 1.3 million in 2010.


Green automobiles

‘Cash-for-clunkers’ incentives

According to the Deloitte analysis, over the past 18 months, programmes in at least 16 countries and regions – Ireland, Austria, Central and Eastern Europe, China, France, Germany, Italy, Japan, Mexico, Netherlands, Portugal, South Korea, Southeast Asia, Spain, UK and the US – have been enticing consumers to replace old vehicles with new ones with scrappage bonus or “cash-for-clunkers” type incentives.

Green R&D in US, China, France and Germany

From an R&D and manufacturing perspective countries such as the US, Australia, China, and France are channelling investments towards R&D efforts.

– The United States Advanced Technology Vehicles Manufacturing Loan Programme totalling US$25bn, for example, offers grants and loans to support the local development of advanced technology vehicles and associated components.

– Australia’s Green Car Plan will invest AUD$1.3bn (US$1.2bn) towards innovation and design of more environmentally-friendly vehicles.

– In Germany, the government’s goal is to have one million EVs on the road by 2020. It is supporting this with a €500m (US$660 million) investment towards development of batteries and analysis of how EVs can be introduced in certain regions of Germany.

– Similarly, the French government launched a €1bn (US$1.3 billion) programme in October 2009 to put plan to have two million hybrid and electrical vehicles on the road by 2020. The plan encompasses industrial research, battery development and building a network of battery-charging stations.

– China’s Revitalisation and Readjustment Programme for the Automotive Industry is expected to cultivate e-mobility in the world’s largest automotive market. The programme includes a ten billion Yuan (US$1.5bn) government subsidy for three years to automakers who upgrade their technology and develop alternative fuel vehicles.

By Carmel Doyle

Photo: A Tesla electric car at a charging point (courtesy of ESB). Tesla has just teamed up with Toyota Motor Corporation (TMC) to pioneer the development of electric vehicles, parts, and production system and engineering support. TMC has agreed to purchase US$50m of Tesla’s common stock issued in a private placement to close immediately subsequent to the closing of Tesla’s currently planned initial public offering.


Carmel Doyle was a long-time reporter with Silicon Republic