When the Nissan LEAF and the Chevrolet Volt were introduced in late 2010, plug-in electric vehicle (PEV) sales were concentrated on the respective automakers’ domestic markets, Japan and the United States. Japan was the largest PEV market in 2010, was quickly overtaken by the United States in 2011, fell behind Western Europe in 2012, and then behind China in 2014. Meanwhile, the United States has maintained a lead on China and Western Europe, but it’s possible that like Japan, it too will fall behind China and Western Europe this year.
In the first 7 months of 2015, PEV sales in the United States are down 6.3%. Many of the compliance PEVs made by Toyota and Honda have been phased out, while production of higher-volume PEVs has slowed before the introductions of the next-generation updates scheduled to be released before the end of the year. Similarly, only one new PEV has been introduced this year, the Mercedes S550 PHV, which is a high-end luxury vehicle likely to be sold at low volumes. The limited amount of new vehicle introductions is a stark transition from 2012, 2013, and 2014, where over the course of each year, around six new PEV models were deployed.
Meanwhile, in China and Western Europe, PEV sales in the first 6 months of 2015 are estimated to be up 175%, and 77%, respectively. The surge in China and Western Europe can be attributed to PEV introductions from an influx of domestic automaker platforms alongside significant government incentives in select Chinese cities and European countries. Volkswagen, Mitsubishi, and BYD have been particularly aggressive in these markets. In addition, the oil price dive has been less impactful on retail fuel prices in these markets than in North America due to higher taxes on retail fuels in these markets.
Though the North American market is slowing relative to China and Western Europe, annual growth is likely achievable by the end of the year. Despite some delays, a number of new PEV models are set to be introduced in the next few months. Among the introductions are three SUVs: the Volvo XC90 T8, the Tesla Model X, and the BMW X5 eDrive, which will help break PEVs into new high-volume markets. Similarly, the redesign of the Chevrolet Volt, which increases the vehicle’s all-electric range and internal combustion engine fuel efficiency at a lower purchase cost, is set to go into production this month.
However, for Japan, growth is likely negative in 2015; the market has contracted over 20% over the first half of the year. This puts Japan in line to fall behind Norway, the United Kingdom, and France, with Germany closing in. Most of Japan’s PEV sales come from domestic automakers Nissan and Mitsubishi. Toyota and Honda have been reluctant to sell PEVs, favoring fuel cell technologies instead. With BMW and Tesla being the only foreign PEV automakers making sales in the country, PEV availability in Japan is severely limited.