Who's Actually Going to Buy Electric Vehicles?

According to a survey by leasing residual value tracker ALG, 55% of 2,200 people polled said they are unwilling to pay any more for an electric vehicle with a range of 100 miles than for a gasoline-powered vehicle. And even if they were interested in purchasing an EV, more than four in 10 respondents said they would be unwilling to pay to install a charging station where their vehicle would be stored.

In other recent coverage form Automotive News, columnist Dan Guilford wrote, "China's desire to leapfrog traditional automakers with electric vehicles is filling up the order book at A123 Systems. The Watertown, Mass., battery maker last week said it had won a contract from Shanghai Automotive Industry Corp. to supply lithium ion batteries for a 2012-model EV. A123 already sells battery technology to SAIC for several vehicles. Jason Forcier, vice president of A123's automotive unit, says the company initially will build cells in Livonia, Mich., but will shift production in 2013 to a plant in China. The cells will be integrated into packs at a Chinese joint venture between A123 and SAIC. China expects its annual production of electric-drive vehicles to hit 1 million units by 2020, Forcier notes."

So my thoughts are - How accurate are the forecasts, and if they are, who will be buying? While JD Power and Associates say it will be less than other reports on the market claim it will be, we're still talking about millions of EVs being on the road.

Who will buy them? At first, you can expect to see three targeted, guaranteed audiences: 1. Early adopters, who will brag about being among the very first to drive a Nissan Leaf or another competitive electric model. 2. Greeniacs, or those with environmental concerns and activist tendencies, i.e., people who belong to Plug In America and can't wait for "Revenge of the Electric Car" to come out. 3. Fleets - such as General Electric and Enterprise Rent-A-Car, which are buying a lot of EVs. Perhaps there should be another segment added: 4. Overseas markets - China, India, Japan, Korea, Great Britain, France, Germany, Brazil, etc. Overseas governments are passing mandates and incentives to get citizens behind the wheel of an EV.

So it will happen - millions will be sold in the next 10 years, along with millions of hybrids, flex fuel vehicles, NGVs, and hydrogen fuel cell vehicles. Once the four core buyer segments are thoroughly reached, the issue will be how to elevate and expand the markets and increase the production chain effectively. Then the profits start rolling in. Long before that, OEMs are lined up to play this game, and there's multitudes of technology suppliers making much needed contributions.