Demand-side policies incentivizing plug-in electric vehicles drive sales growth

According to a new report from Navigant Research, demand-side policies incentivizing plug-in electric vehicles have been particularly effective at driving sales growth in specific markets.

Electric vehicles provide a number of advantages over conventional internal combustion engine-powered vehicles, including cost reductions related to vehicle operation and maintenance and the convenience of forgoing gas stations, oil changes and emissions tests.

While these benefits have not been enough to justify the high cost of the technology for many consumers, government policies around the world are helping to ensure the supply and demand of PEVs.

“Despite significant battery cost cuts in the last five years, PEVs without subsidies are still more costly than competing fuel efficient hybrids and small gasoline-powered vehicles,” says Scott Shepard, senior research analyst with Navigant Research. “To realize further battery cost cuts that would make PEVs competitive without subsidies, PEV sales must continue to grow and government subsidies are vital to that growth.”

Opportunities for large gains in PEV market growth may be found in Western European countries with few incentives, according to the report. For example, Germany‘s PEV penetration almost matches that of the United States, however incentives are relatively non-existent, which means a modest incentive improvement could create significant impacts for the market on a country and global level.

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