By late this month or early July, Mercedes-Benz is set to start shipping its first mass-produced pure electric vehicle in the U.S. – the B-Class Electric Drive – joining producers like BMW, Nissan and Tesla, Forbes Magazine reported yesterday. Forbes stated this is another sign of the “fast growing plug-in electric vehicle market,” with rising demand for electric vehicles and global PEV sales expected to reach more than “2.7 million units by 2018.”
In California, the U.S. and across the globe, we are at a turning point for plug-in electric vehicles (PEVs)—as electric transportation options become technologically diverse and more available and attractive to consumers.
In the last year, global registrations of electric vehicles from the first three years of the market reached 500,000 units. The U.S. plays a dominant role, with 200,000 vehicles registered, more than one-third of those in California.
Under the classic “diffusion” theory, all new technologies—from smartphones to air conditioners— take years to make an impact with consumers, spreading from early “innovators” to the larger populace. However, within the first 36 months of large-scale availability, PEV sales are stronger than gas-electric hybrid cars were in the same time frame.
Part of the faster adoption is due to varied vehicles that have hit the market, with PEVs encompassing a broad range of technologies and charging needs:
Some of these vehicles will become available in an even more advanced, second-generation design in the next few years.
But the diverse and innovative electric vehicle sector also faces hurdles to broader acceptance and greater market adoption.
Before incentives, the average ticket price of a PEV is higher than that of traditional gas vehicles—with current buyers affluent and often very affluent. Women, who purchase and influence car purchases at a high rate (60 to 80 percent) are poorly represented in the PEV market. Charging infrastructure for electric vehicles remains a challenge, with increasing congestion at free public charging stations. To help bolster electric vehicle sales, more used vehicle inventory is crucial, with used vehicles representing two-thirds of all U.S. car purchases; the expected increased availability of formerly leased PEVs—50 percent of the current PEV market— may help do that.
The next buyers of PEVs are likely to be the current “innovator” owners, and their “fast follower” neighbors clustered in similar regional geographic pockets. These next buyers will need more optimized charging infrastructure and better customer support from dealers who are increasingly learning how to market these vehicles.
We’re just beginning to observe and measure the development of the electric vehicle market. Challenges to wider commercialization lie ahead. And as we’ve observed at this foundational stage, the “kick start” of incentives is integral to the PEV market evolution— both domestically and internationally. Incentives vary by state, and by country, but may include tax credits, rebates, free parking, access to high occupancy vehicle lanes, and discounts on electricity.
California continues to lead the way on this “next wave” of electric transportation, with a regulatory goal of 1.5 million zero-emission vehicles on the road by 2025. Despite the challenges, the continuing growth and technological sophistication of electric vehicles suggest there’s a lot of progress to follow.
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For more information on “Catching the Second Wave of the Plug-in Electric Vehicle Market” webinar, please see these links below.
This represents the second in a UC Davis webinar series offered jointly by the NextSTEPS (Sustainable Transportation Energy Pathways) research consortium and the Policy Institute for Energy, Environment and the Economy.