Study forecasts 5.5 million electric vehicles worldwide by 2025; Tesla poised to dominate
According to the latest study by automotive research firm Jato Dynamics*, 5.5 million EVs (electric vehicles) will be on the roads by 2025. EV sales are expected to cross the 700,000 units mark in 2016, up from just 280,000 units in 2014. That demonstrates massive 150% growth in the electric vehicle sector. Two noteworthy factors have contributed to the rising popularity of electric vehicles including: 1. initiatives by governments around the world (like subsidies and tax exemptions on EVs), and, 2. auto manufacturers investing in the right EV in their electric vehicle programs.
Norway is a leading example of how government initiatives can act as a catalyst for electric vehicle growth. In 2013, EVs accounted for 5.7% of Norway’s total passenger cars sales – the highest share seen anywhere in the world – thanks to the country’s aggressive incentive programs (outlined in the video below from Renault Nissan).
With the exception of the Netherlands, no other market achieved even a 1% share. A year later, the share in Norway skyrocketed to 13.6% (from 5.7%), while Estonia, Sweden and Latvia’s shares rose above 1%.
Analysis of the best performing models demonstrates that manufacturer emphasis on selling the right electric vehicle is key to the company’s market standing. Take the current leading EV maker (by volume), Nissan, which makes the world’s best-selling EV model – the Leaf. The Nissan Leaf is responsible for 97% of Nissan’s EV sales. A similar trend can be seen with Mitsubishi’s Outlander (95%) and Volkswagen’s electric Golf (90%). Along with the Tesla Model S, these four cars are at the top of the global sales table (followed by the BMW i3, Renault ZOE, Chevrolet Volt, Baic E-Series, Audi A3 and Ford Fusion).
However, if you extrapolate the results of this study coupled with the dramatic growth of Tesla Motors - which focuses all their efforts solely on electric vehicles - it’s clear Tesla is poised to dominate these rankings. This year, Tesla Motors followed up their critically-acclaimed Tesla Model S (launched in 2012) by introducing their all-electric SUV, the Model X. In addition, scheduled for 2017, Tesla Motors will launch their lower-priced Tesla Model 3 which is slated to have a 200-mile range and $35,000 starting price. Tesla Motors is dedicated to releasing only all-electric models in their product portfolio and plans to (soon) flood the market with its electric vehicles as production ramps up. To that end, Tesla Motors CEO Elon Musk has predicted that the brand will top 500,000 in production volume after 2020.
The study concludes that governments and the auto industry must each play an integral role in order to accelerate electric vehicle market penetration. Auto manufacturers must continue to emphasize (and invest in) their electric vehicle programs. And, governments must help to create the conditions that allow EVs to better compete with conventional fuel cars.
With recent events surrounding diesel-gate and a continuing worldwide focus on reducing carbon emissions, we're hopeful that governments follow the lead of Norway while the auto industry follows in the footsteps of Tesla Motors, the brand on the vanguard of the electric vehicle revolution.