Abstract:

This report evaluates near-term electric vehicle market trends to apprise on the optimal evolution of governments’ electric vehicle incentive programmes to sustain market growth. The authors analyze prevailing per-vehicle purchasing incentives and how government outlays increase to maintain these incentives as the market grows. The authors assess how electric vehicle costs—for varying electric range—are reduced in the approximate time frame of 2020–2025 due to increased battery production. The study analyzes when the consumer proposition might tip in favor of electric vehicles, based on the first-owner cost of operation for seven major electric vehicle markets in North America, Europe, and Asia. Based on the analysis, the authors conclude that the electric vehicle range and cost improvements will considerably expand the electric vehicle market and reduce the need for incentives. As fiscal incentives phase down, more policy action will be needed for electric drive. Charging infrastructure, consumer education and awareness campaigns, fuel efficiency regulations will become significant drivers for the transition to mass-market electric vehicles.