Happy Fifth Birthday, Modern Electric Cars! Three Key Trends in the EV Market

, senior engineer, Clean Vehicles | October 21, 2015, 4:53 pm EDT
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This December, the first cars sold in the modern era of electric cars will turn five years old.  We’ve seen impressive growth in those first 5 years—but have we arrived at a tipping point where EVs are inevitable? Probably not; despite major progress, policy support is playing a critical role pushing automakers who are reluctant and helping consumers overcome barriers to EV ownership. Therefore the next 5 years are critical to get us to that tipping point. To see where we might be going, let’s take a look at the state of the electric vehicle (EV) market and how it has grown over the last 5 years.

1: The fleet of clean electric vehicles continues to grow, fueled by more choices

The number of electric cars on the road in the U.S. continues to climb, with over 350,000 sold since the first models from major manufacturers were released in December 2010. The number of EV models has grown to over 20 different plug-in models available from 16 brands. This month also marks the introduction of Toyota’s Mirai fuel cell electric vehicle, further broadening the types of clean, electric motor-driven vehicles that are replacing gasoline-powered vehicles across the country.

2: Second generation plug-in vehicles are arriving

We are at an exciting point in the development of the plug-in EV market as EV mainstays like the Nissan LEAF, Chevy Volt, and Toyota Plug-in Prius are now transitioning to updated versions that will make it easier to drive on electricity. The Chevy Volt is getting a complete refresh with important additions like a 5th seat and an increase in electric range to 53 miles before the gasoline engine kicks in, up from the previous models 38 mile electric range. Nissan will have a new LEAF available as a 2017 model, and the 2016 model gets an important spec change with the availability of a larger battery pack to get over 100 miles of range on a single charge. The Plug-in Prius from Toyota should also get significant improvements in 2017.  Toyota has released few details on updates to either the plug-in or standard Prius models, but many expect better range and fuel economy from the 2017 editions.

3: Will EVs sell with low gasoline prices?

Gas prices in most of the U.S. have been trending lower this year and EV sales have also slowed somewhat this summer. It’s easy to see why one would link the two trends, however the true picture is more complex. Lower gasoline prices may impact EV sales, but so too may model life cycles. The Volt, LEAF, and Plug-in Prius are three of the top four most popular EV models in the United States, and all three are wrapping up production of 2015 models that will be replaced by more capable new versions. This changeover has impacted sales, with dealer inventory dropping and consumers waiting for new models to become available. As a result, third quarter sales dropped by over half for these models when compared to 2014.  However, the sales for all other EVs (excluding these three models) grew by over 25% compared to the same time last year, at a time when gasoline prices were falling.

Clearly gasoline prices aren’t the only driver for EV sales, nor should we expect them to be. Most EVs are thriving not just due to savings on fuel costs, but because they represent innovative technology, the convenience of never going to a gasoline station, high performance, and the desire for many to live a more sustainable life.

What will the next 5 years bring to the EV market?

Prediction is hard, especially about the future. But there are some trends that could accelerate the growth of EV sales.

First, Nissan, GM, and Tesla are all expected to release EVs with 200-mile ranges at an affordable price point. This range should make EVs fit into almost everyone’s daily driving needs with no anxiety over running out of charge. These cars will make the market for battery electric much larger than it is today.

Second, we are starting to see a diversity of EV models. For example, Mitsubishi is planning on bringing its plug-in SUV (a best seller in Europe) to the U.S. next year and Chrysler is planning on a plug-in minivan for 2017.  These cars, combined with vehicles like the Tesla Model X crossover, will mean that more and more shoppers will be able to choose an electric vehicle for their next car. And as automakers get more experience building electric drivetrains, we’ll see plug-in vehicles offered across the car companies’ line-ups.

We’ve made a good start, and the future looks promising for EVs – but the market is at a critical point in its evolution. Policies, like California’s zero-emission vehicle program, are clearly continuing to have a big influence on the market. Only some of the 22 plug-in models are available in all 50 states; the majority of models are only available in California or other states that have adopted similar vehicle requirements. Consumer incentives are also playing a critical role – access to car pool lanes, rebates and tax credits are making more people take a look at EVs and making the decision to try something new. That’s why it’s important that we continue current policies that increase the choices for consumers and provide incentives to help get more drivers to switch from gasoline to electric drive.

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  • We have had a LEAF for a year now and it is the first car I have ever truly loved. It is such a joy to drive. Living in Seattle our electricity is free of carbon emissions (mostly hydro) so when we drive we are not even indirectly contributing to the burning of fossil fuel. Used to feel guilty driving my old Mustang. For $1000 we had a charger cable installed at our house. We plug in overnight and the car is always ready to go. No gas stations, no oil changes, no muffler, no tailpipe…Never going back to a fossil-burning vehicle.

  • John Hohulin

    I bought – not leased – a Soul EV. I’m committed to the EV lifestyle, and intend on driving the wheels off of it.

  • Richard Solomon

    My wife and I are not expecting to buy a car in the immediate future because our current vehicles are serving us well. But we do plan to get an EV or some kind of car whose technology is based on non-fossil fuels in the future. We both are low mileage drivers at this point in our lives so an EV will fit into our lifestyle easily.

    • EVPerks.com

      Maybe the Chevy Bolt? 200 mile range. About $30k, close to $20k with rebates.

    • RobSez

      Unfortunately there aren’t any cars that don’t use fossil fuels, but you can certainly reduce your fossil fuel use pretty easily. You are in a great position to be in. The technology is getting better and in some cases cheaper every year. The infrastructure is growing and improving. The competition is also heating up so more choices & options on the horizon too. The best advice I can give you is lease, don’t buy. Also, spend the money to install a good L2 charger at home. Make sure it’s rated for outdoor as well as indoor use and plug-in mount is preferable to hard-wired if you might be moving some day.

      • karlInSanDiego

        Since BEVs can’t use fossil fuels directly, it’s not fair to say there aren’t any cars that don’t use fossil fuels. You’re speaking, I believe, about the source power, but there are places with Hydro, for example or Concentrated Solar Thermal which supply BEVs without burning any fossil fuels. Solar PV plus batteries can do the same. Or wind, or geothermal. My point is that BEVs purchased today will improve their carbon footprint over time as power companies expand their renewable content. Buy a BEV now, add solar to your own roof, and you will be netting a big change in the carbon you burn “with your car.” Yes you may charge at night, and you may have your power supplied by the grid using Nat. Gas, Nuclear, or even Coal, but when you put solar power back into the grid all day long, your PV is reducing the use of those other power sources to your home and your neighbors home, ultimately charging your car with your solar, effectively, if not literally.

      • RobSez

        I’m sorry. Excellent points. You are absolutely right. In my own defense, when I wrote that I had just woke up & didn’t have any coffee yet. I seriously zoned out I guess. I live between two lakes formed by two TVA hydroelectric dams. Most of the time all my electricity at home comes from hydro. I honestly just wasn’t thinking. Thanks for the reply. I stand corrected.

  • RobSez

    My wife and I had one of the very first Nissan Leafs. We were part of the Nissan test pilot program and DOE EV research program for two years. We used to say “It’s not just a car, it’s an adventure”, and laugh. It was a fun, sometimes challenging experience, but we learned a lot about driving electric. Thankfully the technology is much better today and compared to those pioneering days our 2015 Leaf is almost mundane. Our Leaf is our only car now and we can’t imagine ever going back to an ICE vehicle as our primary transportation. People who don’t drive EVs don’t ‘get it’ and it is difficult to explain the experience to them in terms they can relate to. I think the tipping point is coming sooner rather than later because I see more EVs on the road every day.

    • EVPerks.com

      Great story Rob. No one talks about the Fiat 500e much but at $99/month, how can you pass up a lease like that. With the gas savings, a person is making money driving an EV.

      • RobSez

        I’ve read some really good things about the Fiat. $99 is insane cheap and I thought we had a good deal at $135 a month! I always have to laugh when people say they can’t afford an electric car. The media only wants to cover Tesla unfortunately.

      • EVPerks.com

        Very true Rob!

      • John Hohulin

        Personally, I found it to be a cramped, terrible design. Plus, it’s a compliance orphan the CEO Sergio Marchionne has publicly condemned.

      • karlInSanDiego

        Compliance Orphan?? Like as in you won’t get parts because Marchionne is too closed minded to acknowledge that his team, with the help of Bosch, built a compliance car that gave better range and has more comprehensive battery management than a Leaf? It’s true they are giving them away, but the two people who I know that have them enjoy them. I drive an Abarth (500 ICE) and it’s got plenty of room in the front. Terrible design? Don’t think so. You could say that the 500e is a cheat if you can show it’s a loss-leader, but there is nothing terrible about it.

      • John Hohulin

        You and I perceive it differently, that much is certain. But when the guy at the top of the corporate pyramid condemns it, that makes a strong statement about the company’s commitment of EVs IMO. Why buy into an ICE-focused anti-EV culture?

      • karlInSanDiego

        Maximum Bob Lutz poo-poo’ed the Volt, but that didn’t stop it from becoming a very useful design and the first widely accepted (mostly) series hybrid. And it has enough battery plug in mileage capability, that many owners operate it like a range extender, rather than mixing every trip with gas, like Prius Plug-in is more likely to require. The executive at the top of countries or companies is rarely the smartest person in the room, and almost always is set in their ways by the time they ascend to the throne. Luckily, a little group of people called CARB, forced Fiat/Chrysler’s hand, and a very old German company, Bosch, got pitched into the the middle of what I believe is their first modern BEV (notice Fiat did not go to Magneti Marelli, or Panasonic who are more closely aligned with them) The 500e appears in my opinion to be a rookie smash, regarding bang for the buck in efficiency, bearing over 87 miles EPA range, (118mpge) from 24 kWh from a conventional body/chassis. Comparably, the Tesla is the Hummer of BEV’s (89mpge) but conveniently, few people have condemned it for its inefficient mpge results. In it’s initial form, the Leaf bore a 73 mile EPA range also using a 24 kWh battery, but later it was discovered that it was actually 84 when Nissan self tested and used only the 100 SOC number. Which begs the question, is the EPA really allowing car companies to self test in the electric world the way they’ve been embarrassingly allowing the gas cars to be self tested. Come on EPA, you are a regulating body. Regulate and get some proven standards in the industry please.

      • John Hohulin

        *Bob Lutz was never the guy at the top of the pyramid, regrets his lack of support of the EV-1 and has since become a huge alternative fuel advocate.
        *CARB – same people that helped kill the EV-1 – and now the same group that says ICE will be gone in 30 years.
        *As to the EPA, we couldn’t agree more. They have repeatedly failed to regulate, enforce, or provide consistent standards. They need to step up PDQ, the transportation world is changing too fast.

      • karlInSanDiego

        I reject that CARB killed the EV-1. I’d agree with you if you said the EV-1 would never have been created without the earlier work that CARB did, inspiring GM that they’d have to build it. When a regulating body falters from pressure by corporate interests, it isn’t fair to say they killed the EV-1. That was corporations paying off/pressuring some at CARB. I don’t disagree with them that ICE will be gone in 30 years. Climate change is now widely accepted as real, and it is entirely believable that ICE engines being outlawed in the countries that build them, will ultimately kill that technology. How long did it take for the telephone to replace the telegram, or cars to replace horses? This change will likely be much faster.

        Lutz is all over the place with alternate fuel. I’d call him a blowhard and an alternate fool, but regardless, my point is that CEOs (and division heads) at each of these companies have had to consider the risks of jumping into EVs and decide on timing. Of course we can celebrate the early zeolots like Musk and Ghosn, but I’d stop short of letting any spokeperson for the other companies jade my acceptance of their future products. Marchionne was really only negative because he see the economical viability as risky. Given that modern CEOs can only think ahead one Quarterly report, they all would be expected to be bearish on new technologies. Reps at BMW and VW and Lamborghini and Jaguar also said in no uncertain terms BEV’s were foolish, and now each of those companies (and subbrand in the case of Lambo) is very much on board.

      • John Hohulin

        I respectfully reject your rejection. Please review the film “Who Killed The Electric Car”. CARB’s actions were biased, heinous and hostile, very much focused on H2 technology as THE solution.

        Marchione is no mere “spokesperson” – he’s the capo di tutti capi. His words MEAN something, and he’s an influencer of the highest rank. I myself think he’s an old-school ICE diehard, not at all visionary, 1/8th the CEO Ghosn is, and it’s my perception that he will fight EVs to the death.

      • karlInSanDiego

        CARB, in 1990, was the ONLY government body in the history of
        the world to mandate ZEV. That is why GM and Ford and Chrysler and Honda and
        Toyota designed (or bought designs) for BEV for the first time aimed at
        production cars. It does a serious disservice to the history making mandates passed in two separate eras by CARB, which single handedly launched the BEV revolutiion TWICE. Please be very careful about disparaging CARB in a blanket way in an attempt to demonize how they were the ones who stopped BEV.

        http://documentaryheaven.com/who-killed-the-electric-car/
        23:00 -30:00 –
        Bush administration and Gov. Terminator were doing the bidding of BP and the fossil fuel industry and it’s hydrogen highway, but that was NEVER CARB’s board’s inspiration. The companies and those two politicians were pressing H2, as was federal government lawsuit against CARB, as they pressed for a dismantling/delay of the ZEV mandate. That clip shows Alan Lloyd and Ron Roberts flipping and relieving the manufacturers from CARBs previous very important ZEV mandate. CARB wasn’t heinous and hostile unless you mean their original, and newer positions that the Zero Emissions mandate is in place, because the ICE centric manufacturers thought CARB was their enemy. CARB was never the bad guy. They temporarily lost their way when that vote allowed GM and others to kill their cars.

        Here’s a summary from UCS regarding the original mandate and it’s undoing: http://www.ucsusa.org/clean_vehicles/smart-transportation-solutions/advanced-vehicle-technologies/electric-cars/californias-zero-emission-1.html#.Viq5vBerY4o