Strategy Analytics: Batteries Remain a Key Issue in Hybrid and Electric Vehicles

To Remain a Niche until There is a Technology Breakthrough - 7.6 Million Hybrids and 1.5 Million Electric Vehicles by 2019

BOSTON--(BUSINESS WIRE)--Due to the high cost of batteries, many consumers consider hybrid and electric vehicles to be too costly when compared to conventionally-powered models, which are becoming more fuel efficient.

“Assessing OEM Hybrid and Electric Vehicle Strategies: Batteries Remain a Key Issue”

This situation poses a dilemma to auto makers, which face tightening fuel economy and emission mandates that may require electrified powertrains for compliance. The Strategy Analytics report, “Assessing OEM Hybrid and Electric Vehicle Strategies: Batteries Remain a Key Issue” looks at what areas need further development and the current strategies aimed at lowering system cost so that these vehicles will become more affordable.

Kevin Mak, analyst in the Automotive Electronics Service (AES) at Strategy Analytics, commenting on the recent announcement from Toyota that its eQ electric vehicle will not be considered for mass production, said, “This is yet another example of auto makers that currently see electrified vehicles as a niche. At present, the cost of batteries is too high, as the cost of electric cars is double or even triple their combustion-engine or conventional or conventionally-powered equivalents.” Furthermore, battery energy and power densities are not sufficient to allay the ‘range anxieties’ of many consumers.”

“While breakthrough technologies are being sought, many auto makers are pursuing platform designs from which economies of scale can result in cost reductions.” Mak added, “While charging infrastructures are in their infancy, hybrids will see a greater level of deployment. However, not all auto makers have the same electrification strategy. As the market develops, they will form groups of ‘champions’, ‘pragmatists’ - who will use electrification as an ‘insurance’ in complying with future mandates - and ‘reluctants’, who merely need to keep pace with rivals.”

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