Electric vehicle market grows with advent of mega cities

Electric vehicle (EV) manufacturers and dealers will be pleased with the rising trend towards de-urbanization polarization of vehicle sizes. By 2020, the emergence of mega super cities in developing economies will affect personal mobility, driving the demand for EVs.

New analysis from Frost & Sullivan, 360 Degree Perspective of the Global Electric Vehicle Market – 2010 Edition, examines the following markets: neighborhood EVs (NEVs), city EVs (CEVs), extended-range EVs (eREVs) and high-performance EVs (HPEVs).

“Most offices that are expected to move to the first-belt suburbs and city centers will encompass the shopping areas (small-scale deliveries) and living areas for ‘double/single income, no kids’ households,” said Frost & Sullivan’s automotive and transportation group team leader, Anjan Hemanth Kumar. “In mega cities, offices and homes are likely to be adjacent to each other, creating a favorable environment for EV deployment.”

Rising concerns over greenhouse gases and depleting fossil fuel sources are further solidifying the case for EVs. Car manufacturers are working on business models that will make available the car and energy under the same roof, opening up a plethora of opportunities for utilities, suppliers and finance businesses.

Manufacturers are building sleek and sporty EVs to create interest among customers who would be early adopters. Giving an EV distance capability of more than 100 miles (160km) and enhancing the range and safety of batteries are the key focus areas of development for EV manufacturers. However, the prices of the initial EVs are likely to be prohibitive.

To counter this cost challenge, federal and local governments have passed a series of legislation, benefits and rebates to help manufacturers offer their vehicles at affordable prices.

“With the advent of lithium ion battery technology and innovative financial models, the automotive industry is all set to witness a revolutionary business case,” noted Kumar. “Original equipment manufacturers (OEMs) have little choice but to join in the drive to address the energy crisis issue.”

Associations and close participation among OEMs, battery manufacturers and energy utilities will accelerate the introduction of EVs. Market participants could also collaborate with environmental advocates and lobby for benefits.