EVs could account for 22.4 percent of total passenger vehicle sales by 2025: Frost & Sullivan

EVs could account for 22.4 percent of total passenger vehicle sales by 2025: Frost & Sullivan

Frost & Sullivan has predicted in a recent report that electric vehicles could account for 22.4 percent of total passenger vehicle sales by year 2025. The report also suggests that by year 2020, electric vehicles will achieve competitive price as compared to gas-powered vehicles and this will offer the much-needed boost to sales of electric vehicles. The number of people in the United States considering electric vehicle for their next purchase has increased in the recent quarters. The report by Frost & Sullivan offers support to comments by Renault CEO Carlos Ghosn about range of electric vehicles. In a recent interview, Ghosn said that automobile companies working on electric vehicles should not concentrate on reducing cost of ownership.

As per Ghosn, consumers would prefer a better pricing of vehicle instead of having a longer range (and paying more for it). Many automobile companies have been spending millions on research to develop vehicles with longer range. Ghosn added that 300 km range in more than enough and electric vehicles should now be produced for mass-market.

As per Frost & Sullivan industry manager for mobility Prajyot Sathe, by 2025 electric vehicles could make up to 22.4 percent of overall passenger vehicle sales. Majority of automobile companies have started with serious investment in electric vehicles segment. This year, global electric vehicle sales could touch 1.6 million vehicles.

China is leading the revolution in electric vehicles. Chinese government’s mix of policy decisions and subsidies for electric vehicles has pushed consumers to look for affordable electric vehicles instead of gas-powered vehicles. Currently, China accounts for nearly 49.5 percent of global electric vehicles sales, followed by Europe at 25.6 percent. The U.S. market is still lagging behind.

Tesla launched Model 3 for mass market and the company registered strong consumer interest. Tesla was facing production bottleneck over the last two quarters but the recent reports suggest that Tesla has managed to significantly improve production of Model 3. Tesla has also invested heavily in supercharging network (another major factor for better consumer acceptance of electric vehicles).

Frost & Sullivan report further informed, “Lack of standardization is the biggest challenge for the electric vehicle charging infrastructure market along with high costs and low resale value. Currently, charging stations are prevalent in areas or regions where EV sales are the highest. Energy and petrochemical companies have started investing heavily in establishing electric vehicle charging stations as they are likely to be the biggest beneficiaries of the electric vehicle market.”

Solid-state batteries can change the dynamics in electric vehicles segment. The cost of per kWh of battery power should come down in coming years and this will impact cost of ownership for electric vehicles.