GCC: Cumulative PEV sales in California at 8.6% of 5M 2030 goal; BEVs at 4.4%

. . . In Q2 2018, PEV sales were 35,466 vehicles, up from 22,427 from Q2 2017 and up by 8,255 from Q4 2017. Total market share for PEVs for the quarter was 6.9%, up from 4.3% year-on-year. Battery electric vehicles accounted for 19,358 vehicles, up from 11,828 year-on-year, with market share going from 2.3% in Q2 2017 to 3.7% in Q2 2018. Standard hybrid sales (HEVs except for plug-in hybrids) were 20,595, down from 24,321 year-on-year. Total market share was 4.0%, down from 4.7% year-on year, but the same as the first quarter of this year.

The report attributed PEV sales growth in Q2 to two main factors:

Most PEV sales continue to come as consumers otherwise open to an alternative fuel vehicle shift to plug-ins rather than buying a standard hybrid.

Tesla finally began significant shipments of Model 3 from prior orders. Tesla’s sales in California were up 9,815 from Q2 2017, of which 8,951 were Model 3 shipments for orders posted in the prior year. These sales may indicate that a break from the 9.1% long-term market share may finally be taking place, but more than one quarter of data and sales generated by current rather than prior-year consumer decisions will be needed to show a change in this trend. Counter to previous expectations that Model 3 would finally represent a break-through in BEV prices that would open up electric vehicles to a wider market, current deliveries are at a price point that keeps this model in the near luxury category, limiting its future ability to appeal to a wider segment of the market.

Accounting for normal fleet turnover rates and reductions from persons moving out of California, PEV sales would need to be 3.9 times higher to meet the 2030 goal, the report said. True ZEV sales would have to be 7.8 times higher.

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State’s Progress on 5 Million Zero Emission Vehicles by 2030: Q2 2018 Results

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. . . Light Trucks Sales Share Up to 55% of Sales

Light truck market share was 55.5%, up from 50.4% in Q2 2017. The growing consumer preference for larger vehicles continues to be a contra-trend affecting the state’s ability to achieve its ZEV goals, as fewer models are available in this market component at price points that would achieve broader sales. The few models that are now offered in this class tend to be in the high end of the market.

Consumer shifts to light trucks for the US outside California was even more pronounced, accounting for 69.6% of new light vehicle sales in this quarter. The potential for California’s ZEV policies to have much of an effect beyond its borders are increasingly limited as a consequence, as few models are being offered for the types of vehicles consumers prefer to buy.

The trend towards light trucks came even in spite of higher fuel prices. The average California price for regular gas in Q2 2018 was $3.66 a gallon, 21.0% higher than the prior year’s $3.03. . . .

The future direction for PEV sales is also uncertain as a result of a looming shift in the subsidies available to buyers of these vehicles. As indicated by prior experiences in Denmark, the Netherlands, and—within the US—Georgia, PEV sales are highly sensitive to changes in these subsidies. California has already made substantial cuts to the availability of its rebates by imposing income limits for eligibility. Tesla appears to have breached the total sales threshold for its models to be eligible for federal rebates, and GM appears to be few quarters away, with Nissan at 60% and Ford at 55% of the cap[1]. . . .

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Battery electrics steal sales from hybrids

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According to an analysis by the California New Car Dealers Association, all of those new plug-in cars are replacing traditional hybrids, not conventional cars. So the fuel and emissions savings aren’t what they could be.

Data from the CNCDA’s California Auto Outlook [PDF] in the second quarter of 2018 shows a dramatic dip in the market share of hybrid cars, and a corresponding big rise in both plug-in hybrids and battery electric cars.

According to CNCDA figures, battery electric-car registrations grew from 29,536 in 2014 to 53,500 in 2017, with growth from 1.6 percent of the market then to 3.3 percent now. Plug-in hybrids saw similar growth. Those extra 24,000-plus sales came from somewhere, though.

Hybrid registrations for 2017 were 93,251, down from 116,217 in 2014. That’s a drop of almost 23,000 hybrid sales, from 6.3 percent of the market in 2014 to just four percent now. Year-to-date figures for 2018 suggest the decline is continuing.

Together, all green cars make up 10.2 percent of the California auto market this year.

That begs the obvious question: Are burgeoning electric car sales cannibalizing once-robust purchase of hybrids? Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance thinks so. “PHEVs are eating regular hybrids,” he told Green Tech Media. . . .

“There is absolutely a shift happening from hybrids to battery electrics and plug-in hybrids,” said Sam Abuelsamid, senior analyst at Navigant Research. “Our forecast is for hybrids to be relatively flat over the next decade with electric growth mainly coming from plug-in hybrids. The 48-volt mild hybrids will also take a significant chunk of the market over the next decade, although it now looks like it won’t be quite as substantial as we thought a year ago. . . .”

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But I'll let James Greenberger, director of the National Alliance for Advanced Technology Batteries, a non-profit industry trade group (talking to Seth Fletcher in his book "Bottled Lightning" back in 2010 or 2011) state the issue better than I can:

"If you take a look at high-tech marketing and the experience of the high-tech industry [he's citing Geoffrey Moore's "Crossing the Chasm" here, one of the books on my essential list for EVs], you know that the early adopter market for these transformative technologies is relatively easy to come by. We will sell EVs and PHEVs to folks who bought the Prius, no question. But that is not an economically sustainable market, and it's not a politically sustainable market, because if we find ourselves in five years with a PHEV and EV market that is entirely dependent on wealthy consumers and government subsidies, the government subsidies will go away. And so we have a fairly short time period -- in my view, probably within five years -- to figure out how we sell EVs to the general U.S. consumer, who is completely non-ideological and not particularly interested in new technology. They just want a product that does something they do already and does it a little bit better."

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