Strategic Analysis of North American Passenger Electric Vehicle Market

Environmental Concerns and Skyrocketing Oil Prices Uplift Prospects for the North American Passenger Electric Vehicle Market

Egged on by factors such as volatile oil prices, energy independence goals of many countries, and global warming concerns, North American passenger electric vehicle (EV) market is growing in leaps and bounds. The price of oil is expected to be relatively high over a longer term, boosting the value proposition of hybrid and electric vehicles. An unstable geopolitical situation also encourages the active pursuit of energy independence. These new dynamics have revived consumer and vehicle manufacturer interest in EVs, and its emergence as a mass market in the foreseeable future. Further, governments worldwide are progressively tightening emission and fuel efficiency standards for motor vehicles. U.S. federal regulations too require vehicle makers to meet corporate average fuel economy (CAF??) standards. Compliance with federal regulations and standards continues to be one of the most challenging issues the automotive market faces.

As governments at the federal and state levels provide subsidies and incentives for the manufacture and purchase of alternate fuel and pure electric vehicles in pursuit of their clean environment goals, automakers are considering design changes and a shift toward alternate fuel technologies. This will be possible through strategic business models that leverage cost-effective sourcing and manufacturing technologies. "With the advance towards alternate fuel vehicle solutions in the automotive industry, the effective need of fuel-efficient and cost-effective technologies is on the upswing," notes the analyst of this research service. "Automakers are trying to differentiate their vehicles based on the technologies offered and suppliers see this as an opportunity to penetrate this volume-driven vehicle market." However, the market has to be self sustaining, and incentives have to be offset by cost reductions.

Cost price reduction is expected to come from batteries, and proven technological developments in lithium ion (Li-ion) batteries are giving shape to the goal of an affordable and capable electric vehicle. The performance attributes of Li-ion technology make it the ideal energy solution available currently. However, the technology is in the fledgling stage and costs are high. At current prices, the battery accounts for about a third of a plug-in hybrid electric vehicle (PHEV) cost. Although the battery prices are expected to decline as volumes increase and technology matures, the current high price is the biggest bottleneck for the electric propulsion systems market.

Further, a robust charging infrastructure is vital for the adoption of EVs. Typically, the full-charge of city EVs is approximately 6 hours for about 100 miles. "Access to charging stations, range-anxiety, and long charging time are seen as major restraints to the development of a viable electric vehicle market," observes the analyst. "Strategic alliances, including joint ventures between utility companies, automakers, and cities are being forged to develop a charging infrastructure to support the EV market." Another matter of concern is that Li-ion batteries are inherently prone to exploding in the event of a thermal runout. A major safety incident could damage a manufacturers brand and dent consumer acceptance. These issues have raised concerns over consumer acceptance of EVs. Participants in this space must scale up productivity and enhance safety, reliability, and robustness in all battery systems.

Technologies

The following technologies are covered in this research:

• Lithium-ion batteries
• Nickel metal hydride batteries
• Motors
• Inverters
• DC/DC converters
• Power electronics