manufacturers and start-ups set to introduce new models
General Motors and Nissan introduced their mass-market electric vehicles in
2011 with the Chevy Volt and Nissan Leaf. The Volt is a plug-in hybrid
(PHEV), providing a limited range on battery (~40 miles), after which a
small internal combustion engine takes over. The Leaf, on the other hand, is
a battery electric vehicle (BEV), with a range of ~100 miles. GM's approach
allays 'range anxiety' in the consumer's mind, while Nissan's approach is less
complex and possibly more cost effective. Toyota has introduced a plug-in
Prius in 2012, and is developing an all-electric RAV4 mini SUV (in alliance
with Tesla), while BMW also debuted the i3 in 2013. BYD, the Chinese
manufacturer of plug-in hybrids, has ambitious plans for expansion in the US
and Europe.
Government incentives for electric vehicle industry
In order to reduce dependence on oil, governments across the world are
providing incentives to both consumers and manufacturers for the adoption
of electric cars. In the US, for example, the federal government gives tax
credits of up to $7,500 for the purchase of "advanced technology vehicles"
(this includes EVs). This tax credit may be increased to $10,000. There are
several other regulations, such as corporate average fuel economy (CAFE)
regulations, the Zero Emission Vehicle program (ZEV), and subsidized loans
for battery research and the manufacture of electric cars that can accelerate
the pace of adoption. Government impetus in setting up infrastructure will be
crucial for the growth of the electric vehicle industry.
Changes in consumer behavior
Consumer behavior patterns are an important trend for electric car
manufacturers. As oil prices rise and battery prices fall, it may become more
attractive for consumers to purchase electric vehicles. Once there is a clear
economic rationale to purchase electric vehicles, there could be a surge in
demand. Other factors affecting consumer behavior will be the maintenance
costs for electric cars vis-a-vis internal combustion engine cars, and the resale value of electric cars. Both of these factors are still unknown since mass
market electric cars are only just being introduced.
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