Europe a hard nut to crack for alternative powertrains
The internal combustion engine will still control 80% of the European market in ten year’s time forecasted Alastair Bedwell, J.D.Power Senior Manager, European Powertrain at the company’s Global Automotive Outlook Spring Conference in London.
Bedwell reported a period of significant change in Europe as regards the choice of transmissions. The major change is the increase in demand for dual clutch transmissions which have replaced automatic transmissions on non-premium cars and which will attack the share of manual transmissions over time. The premium segment will, he believes, stay with automatics for ultimate comfort. Automated manual transmissions and continuously variable transmissions are unlikely to grow with the latter being mostly restricted to Japanese brands. In 2010, automatic transmissions of all types accounted for 21% of the total market and Bedwell believes that this could rise to 50% by 2025.
Hybrid vehicles are finding Europe a tough market to crack. Out of a global total of nearly 900,000 hybrids sold globally last year, just 110,000 were in Europe with a market penetration of 0.7%. Currently, there are only 15 mainstream hybrid models available on the European market.
Bedwell pointed out that hybrids do well when there is no credible diesel alternative and that full hybrids have been far more successful than the milder versions. The Toyota Auris hybrid has debuted well, but its early success has probably been at the expense of the Prius. Diesel cars can achieve as good or better miles per gallon and are unlikely to be significantly impacted by hybrids whose growth potential is greater when aimed at the conventional petrol sector.
In 2010, the Toyota Prius was comfortably the top-selling hybrid in Europe. The hybrid version of the Toyota Auris accounted for 20% of the model’s total sales and 91% of all Lexus RX customers opted for the hybrid alternative.
Battery electric vehicles (BEV) have had a limited sales history thus far with no mass market track record. Lack of range is a restriction but, as Bedwell pointed out, customers know this in advance. Bigger hurdles to overcome are the shortage of charging points and the time taken to recharge. The first generation of BEVs will require significant subsidies if they are to impact the market in any meaningful way.
Electric vehicles are more costly to buy and to use than conventional internal combustion models, hence the need for incentives over a significant period. Bedwell believes that battery costs must fall sufficiently to offset a risk of the incentives being withdrawn. At the moment, a 1.5 tonne battery would be required to allow the electric vehicle the same range as an internal combustion car. Battery technology will, of course, improve over time. Renault is predicting a three-fold range increase by 2025 and Volkswagen a 500 kilometre range by 2020. General Motors, meanwhile, forecasts a five-fold decrease in cost per kilowatt in ten years time.
Around 50 mainstream BEVs will be available in Europe in 2014 with most major OEMs represented. Some 60% of the introductions will be city cars. Bedwell forecasts that hybrids and electric vehicles will achieve pan-European sales of 1.75 million by 2021. In the same period, he believes that 7.5% of public transport vehicles will be electrified and there will be eight million hybrids and BEVs on European roads. There will be no sudden boom in either hybrid or plug-in sales but the latter will eventually win the battle thanks to incentives, technology improvements and offering greater CO2 benefits than hybrids.
Also by 2021, Bedwell forecasts that conventional internal combustion engines will account for 80% of European vehicle sales (42% diesel, 38% petrol). Liquefied petroleum gas and compressed natural gas vehicles will have grown significantly to 12% of the market, hybrids and plug-ins will take 7.5% and hydrogen will have made its appearance, but at less than 1% of the total.