U.S. Autos and Auto Parts
Electric Vehicles: Perspectives on a Growing Investment Theme

What's New? —— In collaboration with Ceres, the Investor Network on Climate Risk, Baum and Associates, the Rutgers University School of Planning and Public Policy and the University of Michigan Transportation Research Institute, we conducted an overview of the current state of the dynamic electric vehicle (EV) industry, with a focus on individual company product plans, key technological issues, and latest government policies that may influence the development of this industry. The report is designed to provide investors with an educational overview of this important automotive theme.

Automaker EV Product Highlights —— Traditional automakers, as well as a number of start-ups, continue to establish inroads into the EV market, which currently comprises ~3% of U.S. sales volume. General Motors headlines a new class of electric vehicles with the recent launch of the Chevy Volt. Toyota remains a key player as it develops a suite of EV vehicles around the popular Prius name, and Nissan is staking its claim on full electrics with the mid-size Leaf. Of the nontraditional
manufacturers, Fisker and Tesla's plans appear the most advanced, with significant technological and financial resources in place.

Hybrid & Electric Vehicle Sales Outlook —— By 2015, Baum & Associates forecasts over 100 models available in the U.S. market covering the four technology groups (including fuel cells), but many of these products will sell only in modest volumes. The forecast outlined in this report anticipates that sales will grow from approximately 2.5% of the total market this year to 6.3% in 2015 with total sales of over 900,000 units. Regular hybrids will remain most prevalent in both number of vehicle offerings and volume (approximately 55% of projected volume); with plug-ins and full electrics each representing about 20% of projected volume.

Key Developmental Issues to Address —— Critical technological issues include the status and cost of battery technology and infrastructure support. Increasing volume, technological advancements, and creative business models (battery leasing) all promise to improve the value proposition of electric vehicles over time. Government regulation and policy are also influencing the industry through measures such as the Federal Corporate Average Fuel Economy (CAFE) standard and emissions requirements, the California Low Emission Vehicle Program, and its zero emissions vehicle standard, and other state and regional fuel standards.
 

Download full text