According to a recent report by Navigant Research, electric vehicles face more competition as additional technologies that improve fuel economy have emerged.
The use of EVs, which now account for a small but growing share of the world’s light duty vehicle (LDV) market, has been promoted by governments around the world because of the economic, environmental, and energy efficient benefits they provide. Although they make up a small portion of the overall LDV market today, the hybrids (HEVs), plug-in hybrids (PHEVs), and battery electric vehicles (BEVs) that contribute to this market are becoming a significant part of the global automative industry. Navigant Research believes that light duty EVs will increase from 2.7 million in 2014 to 6.4 million in 2023.
Scott Shepard, research analyst with Navigant Research, commented: “Historically, governments have pushed automakers to develop EVs and have also encouraged citizens to buy them, but its likely government incentives will begin to decrease in most developed regions as the market begins to shoft. EVs are expected to become more available in the luxury class segments, where plug-in vehicle premium is lower than comparable vehicles due to higher overall vehicle prices”.
The market for conventional vehicles with reduced fuel consumption is also expected to become more competitive, as other fuel efficient and alternative fuel technologies begin to enter he LDV market, according to the report. In particular, fuel efficiency advances made to internal combustion engines are likely to threaten HEV market share in economy class segments, making growth contingent on EVs expanding into larger vehicle formats, such as sport utility vehicles (SUVs).