Over 1.8 M PEVs Sold in Largest 102 U.S. Cities 2012-2020: Pike Research

Sales of plug-in electric vehicles (PEVs) are concentrating in major markets such as the United States and Europe, though the volume has fallen short of governments and EV makers' anticipation, and are expected to continue going forward in the major markets, as interest in these vehicles is growing, particularly in large metropolitan areas.

Big cities like New York City, Los Angeles, San Francisco, and Seattle combine large population areas with early rollout schedules from vehicle manufacturers, and positive attitudes toward PEVs among residents, making them the fertile ground for PEV manufacturers in the coming years.

Sales of PEVs in the largest 102 cities in the United States will total slightly more than 1.8 million units from 2012 through 2020, according to a recent report from Pike Research.

"More than a quarter of all annual U.S. PEV sales will be in the top five metropolitan areas for PEV sales – New York, Los Angeles, San Francisco, Seattle, and Portland," says senior research analyst Dave Hurst. "But thanks to a combination of positive attitudes towards green driving, high fuel prices, and state government support, California metropolitan statistical areas will account for more than one in five PEVs sold."

Pike Research's analysis indicates that PEV acceptance is strongly linked to not only the availability of PEV models, but also the accessibility of charging infrastructure.

Texas, for example, has seen a dramatic increase in the number of EV charging stations available in 2012. Pike Research's index of positive opinions toward PEVs moved the state's ranking from 42nd in 2010 to fourth in 2012, the largest change of any state in the index.

Increasing Li-ion Battery Sales

In conjunction with the increasing sales of EVs, including PEVs, plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs), strong demand for lithium-ion (Li-ion) power cells used in EV battery packs has been rapidly accelerating battery-technology development, as well as expanding the new market segment.

In recent years, the Li-ion battery industry has taken a number of steps forward. The technology continues to improve, leading battery cell manufacturers have built new factories that incorporate advanced production techniques, and automakers have greatly increased their R&D efforts on EVs.

According to another new report from Pike Research, these developments will translate into strong growth for Li-ion batteries over the remainder of the decade. The overall market for Li-ion batteries in light-duty vehicles will grow from US$1.6 billion in 2012 to almost US$22 billion in 2020, the study concludes.

"The Li-ion battery looks set to be the chemistry of choice for the on-board energy storage market for the foreseeable future, taking over from nickel-metal hydride, which has been the preferred battery for hybrids to date," says senior research analyst David Alexander. "Li-ion batteries can supply the much greater capacity needed for battery electric and plug-in hybrid vehicles, and 2012 saw the launch and announcement of new models from many manufacturers, all featuring Li-ion batteries."

The pressure to reduce the cost of EVs is high, and the cost of the battery pack is the most important factor in determining the premium cost of EVs. Large R&D funds have been invested, but, unfortunately, only small incremental improvements have been achieved so far. One challenge is that volumes remain small in automotive terms.

The cost of the battery pack will come down to about US$447 per kilowatt-hour by the year 2020 at scaled production, according to Pike Research's forecast.