BCG Study – Battery revolution more than a decade away

The Chevy Cruze will outsell the Prius and the Volt through 2020.

ICE engines improving much faster than expected

By 2020 battery prices for plug-in vehicles will decline by 64 percent compared to 2009 levels, however, that will still leave the cost of a 20 kWh battery pack at $10,000 – still far too expensive to woe mainstream consumers according to a new BCG Study.

On the other hand, ICE engines are improving much faster than expected — compared to just 3 years ago — and can be utilized to meet 2020 greenhouse emission’s goals, without battery-powered help.

However, there are many uncertainties that could drastically alter BCG’s forecasts.

In particular, oil prices, regulations and changing consumer preferences leave a lot of uncertainty on the table. For example, if oil prices rise towards $250 per barrel, or a major battery breakthrough is achieved, then hybrids, plug-in electrics and/or natural gas vehicles will mainstream much faster than anticipated.

Overall, however, the US is not expected to lead the battery revolution in terms of either sales or production. Instead, China is expected to be the top market, followed by Europe, although the report acknowledges that China’s plans for plug-ins thus far have fallen well short of expectations.

Additionally, the report notes that plug-ins will be bought almost exclusively by a distinct segment of environment-conscious consumers that are willing to pay extra for such vehicles. China offers the largest segment of such consumers, at 13 percent, while such US consumers number 6 percent.

Ultimately, the report concludes, if emissions are the key driver of plug-in vehicles, expect minimal penetration of plug-in vehicles through 2020, followed by much greater penetration to meet 2035 and 2050 emission’s benchmarks.

Source: AutoObserver