Luke Ottaway's picture

Do projections for future plug-in vehicle sales mean anything?

It is fun to try to predict the future, and some firms are devoted entirely to the art and science (and guesswork) of projecting what the future will hold. But in the case of plug-in electric vehicles, do projections of future sales really mean much?

Hindsight is 20/20, as the saying goes. Yet foresight is rarely more than a clouded, distant picture, especially when it comes to the electric vehicle industry. Just ask General Motors or Nissan – it is all too easy to overestimate sales of plug-in electric vehicles, and even nearly four years after the launch of the Chevrolet Volt and Nissan LEAF it remains difficult to determine how quickly the general public will adopt electric cars.

Which begs the question: are mid- to long-term future projections of electric vehicle sales worth paying attention to, particularly when even short-term sales predictions can be unreliable?

InsideEVs drew our attention to a Navigant Research report, one of many on the subject of hybrid and plug-in vehicles, that proclaimed plug-in electric vehicle sales would exceed 514,000 units annually in the United States in 2023.

The geographic forecast projected that the U.S. will remain the largest market for plug-ins for the next decade, and in that time the global market will show a compound annual growth rate of 24.6% against just 2.6% for the wider auto industry.

Numbers can lie, if they are not the right numbers

This, of course, is not the only mid- to long-term projection of electric vehicle sales out there. Far from it, in fact: such a wide array of estimates exists over various time periods, from many different research organizations, government agencies, think tanks, etc., that it seems almost pointless to put any stock in them.

It should be noted here that Navigant Research is a highly respected group, and the report in question is mainly for the benefit of stakeholders in the current and future electric vehicle industry. And Navigant doubtless are aware of the limitations of such projections that are often based on as much assumption as fact.

514,000 annual sales of plug-in vehicles in the U.S. in 2023 seems like a reasonable total (notwithstanding the fact that the precision of the number is a bit ambitious), but any number of factors could throw it off dramatically.

The variables involved are formidable: oil prices and global stability, particularly in the Middle East; cost of batteries, future “Gigafactories,” and any potential radical advancements made in the next decade; shifting consumer preferences, public initiative toward mitigating climate change, etc.; subsidies and their likely expiration before 2023; the ability of electricity grids to handle the increased EV uptake; potential emergence of rival technologies; the list goes on.

So would it be useful to have a general idea of how many plug-in vehicles may be on the road ten years from now? Sure. But it is difficult to have much confidence in the accuracy of any such projection.

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It seems that all traditional industry analyst have gotten hybrid, plug-in hybrid and 100% electric sales estimates wrong. The traditional auto industry is out of its element when it comes to EV's. It's a bad thing when it's your job to be an 'expert' and you have no clue as to the difference between an EV, PHEV or hybrid (Edmonds). So some 'experts' mask their ignorance with dismissal of EV's as 'insignificant.' Nissan is learning how to sell EV's, their predictions carry some weight. Tesla has a solid formula; 'minimize the learning-curve/compromise' and make the product sexy. IMO, those are the only two entities that are qualified to make plug-in sales predictions - and they would probably still get it wrong.
As the article states the future is difficult to predict. Dropping gas/oil prices will make it a bit harder to sell plug ins since one of the big forces driving sales with these cars is cheaper operating costs. I hope that the 514,000 plug in sales estimate comes to be.
I believe Tesla has the right way to go when you get a range of 20o miles. The electric car would be your second car for local traveling. When Tesla brings out the model 3 priced $35k and has a 200 mile range it will be the death for plug ins. I would consider a Prius but the car has no style and actually is dated. If the new Prius has modern design cues I would consider one for my errand car now that I am retired. We have Jeep for the winter, a Kia Optima SX Turbo for traveling, a older corvette for summer cruising and a Elantra for our current errand car. The Tesla Model 3 could be a home run for Elon Musk.