GRA
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McKinsey: The global electric-vehicle market is amped up and on the rise

Tue May 08, 2018 4:30 pm

https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-global-electric-vehicle-market-is-amped-up-and-on-the-rise?cid=other-eml-alt-mip-mck-oth-1805&hlkid=28f4bcb87e974012ac06378a46cb667c&hctky=1713434&hdpid=7614e4eb-6c11-4d8e-85fb-0f415f6005d1

China remains firmly in the lead on our Electric Vehicle Index. But other pockets of growing public- and private-sector commitment to these vehicles have emerged.

Last year, for the first time, global sales of new electric vehicles (EVs)1 passed a million units (Exhibit 1), according to McKinsey’s Electric Vehicle Index (see sidebar, “What is the Electric Vehicle Index?”). Under the current growth trajectory, EV producers could almost quadruple that achievement by 2020, moving 4.5 million units, around 5 percent of the overall global light-vehicle market.

Pure electric vehicles (BEVs) currently make up 66 percent of the global EV market. BEV sales are growing faster than those of plug-in hybrid vehicles (PHEV). However, specific markets have very different powertrain preferences, which are influenced by regulatory actions, customer choice, and the availability of specific models.

The Chinese market expanded by 72 percent over the previous year in 2017, solidifying China’s leadership position in EV sales. The country now has a larger EV market—primarily BEVs—than Europe and the United States combined. With a sales share of around 94 percent, domestic OEMs currently dominate the Chinese EV market.

Generous subsidies and tight regulation continue to drive much of the growth. Electric vehicles are exempt from license-plate lotteries and auctions in some Chinese cities, and this still plays an instrumental role in promoting EVs. After a successful pilot program in selected cities, the Chinese government decided last year to introduce green license plates for new energy vehicles (NEVs) across the country. At the end of 2017, the plates were rolled out to all provincial capitals and other selected major cities, with the remaining cities to follow in the first half of 2018. Car owners with these license plates will be eligible for preferential treatment. Furthermore, China’s national and local subsidies for electric vehicles are among the world’s highest, reducing consumer concerns about the comparatively high up-front cost. . . .

In absolute terms, China’s EV-sales performance is quite remarkable. Yet the adoption rate represents only 2 percent on a national level—a limited number of large cities (such as Beijing, Hangzhou, Shanghai, Shenzhen, and Tianjin) account for a majority of EV sales . . . it was outperformed only by Norway in the EVI market score and reinforced its leading position—ahead of Japan, Germany, and the United States—in the industry EVI analysis (the “supply” side of the equation). However, given today’s EV-battery economics, leadership in EVI scores comes at a price: China and Norway have some of the world’s highest levels of spending on consumer and supply-side subsidies, at the taxpayers’ expense. . . .
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

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DarthPuppy
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Re: McKinsey: The global electric-vehicle market is amped up and on the rise

Tue May 08, 2018 6:46 pm

Given the myriad ways governments find to completely waste taxpayer money, at least EV subsidies appear to be accomplishing something - just not as much and as fast as we'd like to see.
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LeftieBiker
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Re: McKinsey: The global electric-vehicle market is amped up and on the rise

Tue May 08, 2018 8:54 pm

DarthPuppy wrote:Given the myriad ways governments find to completely waste taxpayer money, at least EV subsidies appear to be accomplishing something - just not as much and as fast as we'd like to see.


The model here should be the "cash for clunkers" program. That was wildly successful because it helped poorer people buy much better cars, while junking high-polluting vehicles - there was no downside at all. EV subsidies need to do two things that they aren't really doing now: get people into inexpensive compact or subcompact EVs cheaply (much less than $20k), and allow people to buy good used EVs, even if only from dealers.
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DarthPuppy
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Re: McKinsey: The global electric-vehicle market is amped up and on the rise

Tue May 08, 2018 9:40 pm

And I heard the only good thing the cash for clunkers did was to get a bunch of the Obama bumper stickers off the road... :lol: -jk

All kidding aside, yes we absolutely need to get inexpensive EVs out there. We also need to do some serious education regarding total cost of ownership. There are a number of EVs like the Leaf or Smart that after existing incentives are very competitive versus the purchase price of comparable gas compacts/subcompacts. But when you factor in the fuel and maintenance savings over the life of the car, the EV costs far less.

And you make an excellent point that some of these incentives could be available for used EVs. But you have to be careful about which ones.

Example: The 30% tax credit would be ripe for fraud. In year 1, me and my 4 siblings can each by an EV and get 30% refund. In year 2, we each sell the car to one of our siblings, thus the cars just rotate through the family. But we each get another 30% refund. Year 3 and so on and before you know it, we have our entire purchase price and then some for the 5 cars back.

The HOV lane stickers would be a good one to allow buyers of used EVs to do. This I think is crucial. People who can only afford low cost used cars also need to commute and save time so this can make these much more attractive. Also in Santa Monica EVs get free parking at meters, but only if they have the HOV stickers. So California is blocking some people from receiving the benefit Santa Monica intended to provide.

Also, in California's rebate, you have to keep the car registered for 3 years or you have to pay a portion back. So a version of California's rebate system could work okay for used cars.

But to be honest, I think education is really key. From what I've read on this forum, the depreciation has already resulted in off lease Leafs being huge bargains. If more people appreciated the value proposition, these would get snatched up and the price wouldn't be so low.
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SageBrush
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Re: McKinsey: The global electric-vehicle market is amped up and on the rise

Tue May 08, 2018 10:01 pm

Subsidies are a magnet for corruption and inefficiency.
Tax externalities. Plow the money into national electric grid infrastructure.

Let people respond to pricing signals that include pollution and AGW costs.
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DarthPuppy
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Re: McKinsey: The global electric-vehicle market is amped up and on the rise

Tue May 08, 2018 10:41 pm

By 'taxing externalities', are you referring to approaches like heavy taxes on gas/diesel and a 'gas guzzler' tax, except that could be expanded to be a 'gas user' tax?

There is significant merit to those concepts working. When I've travelled to Europe, I noticed they have much higher gas taxes resulting in much higher gas costs. Also, IIUC, in some jurisdictions, the larger the engine, the more tax they pay at purchase. The result of these policies (I am assuming significant cause-effect relationship in this observed correlation) is that I saw much greater use of public transportation, bicycles, scooters and cars/trucks that were smaller and more efficient. Of course the cause-effect might simply be coincidence as they also have a lot of old city areas with very tight streets that would completely thwart the Hummers, Suburbans and Ford Excess's we have running around the US.

Politically though, the oil industry is too strong in the US for this to be a realistic option. :x

Given the political situation, I'm surprised we got as much EV incentives as we have gotten. And I'm really surprised the $7,500 tax credit survived the Republican tax overhaul. Incentives are sadly the only likely option in the US. Which is also part of why places like China and Norway and other parts of Europe are going to absolutely leave us in the dust on EVs.
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