The use of electric vehicles, which now account for a small but growing share of the world’s light duty vehicle market, has been promoted by governments around the world because of the economic, environmental, and energy efficient benefits they provide.
Although they make up a small portion of the overall light duty vehicle market today, the hybrids, plug-in hybrids, and battery electric vehicles that contribute to this market are becoming a significant part of the global automotive industry.
According to a recent report from Navigant Research, worldwide sales of light duty electric vehicles are expected to increase from 2.7 million in 2014 to 6.4 million in 2023.
“Historically, governments have pushed automakers to develop electric vehicles and have also encouraged citizens to buy them, but it’s likely government incentives will begin to decrease in most developed regions as the market begins to shift,” says Scott Shepard, research analyst with Navigant Research. “Electric vehicles are expected to become more available in the luxury class segments, where the plug-in vehicle premium is lower than comparable vehicles due to higher overall vehicle prices.”
The market for conventional vehicles with reduced fuel consumption is also expected to become more competitive, as other fuel-efficient and alternative fuel technologies begin to enter the light duty vehicle market, according to the report. In particular, fuel efficiency advances made to internal combustion engines are likely to threaten hybrid market share in economy class segments, making growth contingent on electric vehicles expanding into larger vehicle formats, such as sport utility vehicles.