U.S. PEV Market Looks to Bounce Back in 2016

The plug-in electric vehicle (PEV) market in the United States took a step backward in 2015, with sales falling off after 5 years of strong growth. A surprising decline in the price per barrel of crude oil along with customers waiting for refreshes of existing PEV models such as the Nissan LEAF and Chevrolet Volt contributed to the slump. However, a bevy of new model launches and improvements in vehicles and charging infrastructure provide hope that 2015 was only a speed bump along the journey toward vehicle electrification.

The slowdown enabled China to surpass the United States as the largest PEV market in 2015, and according to Guidehouse Insights’ recently published Electric Vehicle Market Forecasts report, the Asia Pacific region is expected to pull away from North America in the coming years. According to Automotive News China, total production of EVs and plug-in hybrids grew by 300% during the first 11 months of 2015, climbing to 279,200 commercial and passenger vehicles.

However, by 2017, American consumers will have more variety and total choices in PEVs as Ford, Audi, Tesla, General Motors, BMW, and others are set to launch new models in multiple segments. This will likely prompt a rebound in PEV sales growth, especially if the cost of gasoline returns to pre-2014 levels.

Addressing Inconvenience

According to survey data from Guidehouse Insights, consumers in the United States see the availability and inconvenience of charging PEVs as the main reasons not to switch from gasoline to electric powered cars. More than a third (36%) of consumers who responded to an open-ended question about the primary drawback to owning a PEV cited a lack of infrastructure or other vehicle charging-related hassles. Of the small sample size (14) of those surveyed who currently own a PEV, three mentioned the lack of infrastructure availability as a drawback to owning a PEV, while none mentioned the range of the vehicle itself.

Automakers are increasingly addressing the perceived lack of charging infrastructure, and several now include a free year of access to charging at dealerships and other locations when a PEV is purchased. While the number of public, workplace, and private Level 1 and Level 2 chargers continues to grow, increased fast charging is viewed as a necessity in growing the PEV market. BMW and Nissan recently teamed up to deploy 120 DC fast chargers across the United States. This partnership is particularly interesting since each of these two companies back a different fast charging standard, with Nissan supplying its vehicles with CHAdeMO ports and BMW offering SAE Combo ports on its cars. Each of the fast chargers deployed will included charging cables for both standards, so agreeing to disagree while contributing financially to equipment that supports all PEVs is an important development for automakers. Many EV charging companies now offer chargers that support both fast charging standards, and that trend is another reason to believe the PEV sales will rebound in 2016.