EU Forecast of increased Electric Cars Sales Questioned

The European Commission predicts increased sales in electric cars in a study for eco-friendly transportation. But Volvo challenges the forecast saying it’s too optimistic and unrealistic.

In an effort to build a single European transport area, the EU has drafted a white paper “that will increase mobility, remove barriers in key areas and fuel growth and employment”. At the same time, the initiative will reduce Europe’s dependence on imported oil and cut carbon emissions in transport to 60% by 2050.

Volvo V60 Plug-in Hybrid
Volvo V60 Plug-in Hybrid

To achieve the reduction of CO2 emissions by more than half, the EU counts with increased sales in electric cars. The Commission forecasts 5 million electric vehicles on the streets of European countries by 2020. This would be a market share of up to 4%. By 2030, the share would need to rise towards 30% to meet the forecast cut in greenhouse gas emissions.

The ambitious white paper has already been questioned by the automotive industry. Volvo’s President and CEO Stefan Jacoby said the “predictions are unrealistic. Considering the lack of coordinated governmental incentives and the high battery system costs, the market share for electrified vehicles will struggle to pass the 1% mark by 2020.”

The European Commission calls for the use of conventionally fuelled cars in cities to be halved by 2030 and to be phased out entirely by 2050. According to Volvo, this is another doubtful forecast.

“European car manufacturers are facing a very difficult challenge when CO2 legislations requiring electrified cars are implemented without initiatives that make these cars affordable for a growing number of consumers,” said Jacoby.

“Pan-European subsidies and incentives are needed to support a successful market introduction. Unfortunately, such necessary initiatives are jeopardised by the current debt crisis,” added the CEO.

Electric cars are often criticized for being too expensive although they are already subsidised by a government plug-in car grant. The Mitsubishi i-MiEV, for example, is selling at £24,000. The Nissan Leaf is available from £26,000. The Renault ZE, on the other hand, comes at £14,000. But if customers shop around and are willing to go for used cars, they can find electric vehicles with a new battery for as little as £5,000.

While Volvo says that the EU forecasts are too optimistic, it can also be argued that the Swedish car manufacturer is too pessimistic. Jacoby’s outlook supposes no significant breakthrough on the cost of batteries and electric technology. This is a somewhat unlikely scenario given that technology is always advancing. Just last week, a Lloyds TSB/Telegraph Enterprise Award was given to the YASA motor – a new electric motor that is lighter, smaller and cheaper to produce than the current models. Developments like these will ultimately bring down the price of electric cars and make them more affordable for a growing number of consumers.

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