Jul 14, 2008

Electric Vehicles to Be Big in Europe

Depleting reserves of fossil fuels and rising levels of greenhouse emissions are expected to turn electric vehicles (EVs) from niche vehicles to a significant portion of the mainstream European market in less than a decade, according to a new Frost & Sullivan study. The study also states that automotive manufacturers have little choice but to be part of the EV market if they are to address the escalating energy situation. It says they will be encouraged by novel financial models and the advent of lithium ion battery technology, which are expected to revolutionize the automotive industry.

One of the new financial gambits we might see, the study said, is a sudden movement toward the battery-leasing business, which will be initiated by the EVs and sustained by the vehicle manufacturers. It remains to be seen if the consumers adapt well to this innovative financial model. The EV market is also expected to get a leg up from the federal and local governments, which could help manufacturers match the prices of EVs through legislation, benefits and rebates. Technological enhancements with respect to the battery packs are equally important to the ultimate success of EVs.

“With the increase in driving range, the customer base increases beyond the city limits,” said Frost & Sullivan Research Analyst Anjan Hemanth Kumar. “A battery pack of up to a 100-mile range can tap suburban population and neighborhood cities. A pack with 150-plus miles can tap rural population there by potentially touching more than three million likely EV buyers.”

There are already several punitive laws in place for gas guzzlers in London, and “congestion charging” is expected to be implemented in Milan, Oslo, Manchester and Madrid, all apparently European cities. On the strength of this, the European EV market is estimated to roll out more than 250,000 vehicles by 2015.