Wednesday, September 16, 2009



"Catalyst for this structural market shift will come with Peak Oil thesis confirmation and rising oil prices, more government incentives to combat climate change and China's ability to organise a nation wide transition to the new technology and introduce Green Mobility as standard of transportation."




Now we have more estimations from industry insiders on the potential size of the market for Electric Cars HEV and EVs, we are waiting for production figures in coming months to update our Lithium Demand estimation model. But you can get a very good sense by applying different market share penetration levels of EV and its effect on Supply - Demand picture.




"Total EVs estimation: 1,635,000.
With global car sales estimations of 80 mil in 2015 it will represent 2% of total sales. It is hardly a revolution, but it will bring new demand in lithium space of 40000 t LC, which is an increase of 33% from current level. To put things in perspective 5% adoption rate by 2015 will amount to 100000 additional LC demand and will almost double the market. You can see that our estimations are dependent on advance of a few major players in EV market and Tata's entry into Electric auto space will be very important. Coming auto shows this year will bring us more information.
Our Green Mobility Revolution definition stays for 30% of the market by 2020 which means 24 Mil EVs produced with global auto sales stable at 80 Mil it will account for 600000 t of LC - fivefold increase in Lithium Demand. Next two years will show which scenario will be in place. Catalyst for this structural market shift will come with Peak Oil thesis confirmation and rising oil prices, more government incentives to combat climate change and China's ability to organise a nation wide transition to the new technology and introduce Green Mobility as standard of transportation."


WSJ reports:


By David Pearson Of DOW JONES NEWSWIRES
FRANKFURT (Dow Jones)--As car makers unveil more concepts and initiatives in their pursuit of vehicles powered by alternative fuel sources, debate is heating up over the potential size of the market for electric vehicles.
Predictions are difficult, particularly in an industry that is regulated and evolving constantly, so estimates vary widely: the more optimistic say that electric vehicles could grab as much as 10% or more of the market worldwide in the next 10 years. Pessimists say the potential more likely is just a fraction of that.
The bulls include Carlos Ghosn, chief executive of French car maker Renault SA (RNO.FR) and Japanese alliance partner Nissan Motor Co. (7201.TO). Ghosn says electric vehicles, powered by batteries that can be recharged from mains electricity supplies, will account for 10% of the global market of around 60 million cars by 2020.
"Frankly, we think the potential may be even beyond that," Ghosn told journalists at the Frankfurt motor show Tuesday. He has a lot at stake: Renault introduced a lineup of electric cars and committed to make at least 100,000 of them by 2016. Renault intends to grab a big chunk of the nascent market by being the first to offer a real product catalog.
Most other manufacturers are showing electric vehicles or a hybrid vehicles, though privately company officials say it is more important to be seen to be green rather than through any conviction that there is money to be made, at least in the coming years. There is no illusion that electric vehicles can be profitable from the outset due to massive development costs in a new technology, together with the likelihood of small volume sales.
Other automakers have different views. Germany's Volkswagen AG (VOW.XE) predicts electric vehicles will corner between 1.5% and 2% of the global market, while Renault's local rival PSA Peugeot-Citroen (UG.FR) estimates 5%. French automotive supplier Valeo SA (FR.FR) thinks it could be 3%.
But a recent report by IHS Global Insight, a London-based consulting firm, points to a market share of only 0.6%.
"In the next 10 years, electric vehicles will be a loss-making proposition all down the value chain," says Christian Kleinhans, analyst at Oliver Wyman and author of a study that estimates that electric vehicles will comprise only 3.2% of the market by 2025. The study says manufacturing costs today for electric vehicles are 150% above those of a conventional vehicle, with that margin narrowing to 60% in 2025.
"The industry won't be profitable for a long time, but it will emerge totally modified and will owe its long-term survival" to the technological revolution, says Remi Cornubert, head of Oliver Wyman's automobile practice.
All these estimates hinge on a variety of factors, including the price of oil, how the public's perception of global warming develops, how quickly emission regulations are toughened and on the scope of incentives offered by governments to encourage motorists to buy zero-emission cars. Crucial, though, will be the speed at which the infrastructure for charging or changing flat batteries is put in place.
Ghosn Tuesday waved aside suggestions that the market could be much smaller than Renault expects. Asked about the varying estimates, Ghosn said: "You can take your pick.
"I'm putting EUR4 billion behind my bet, that's the big difference," he added. "I have two thousand people working on it. And even if it's 5%, 5% of the global market is three million cars. Even if it's 5%, we're fine."
Industry executives at the car show say that Ghosn needs to project a very quick development of the market to justify the massive investments that Renault and Nissan are making.
Unlike other car makers, Renault essentially is skipping hybrid technology in which cars will have two powertrains: a battery-driven motor for driving in towns and short distances, and a traditional internal combustion engine for longer distances. While it is gearing up for mass marketing of battery powered vehicles starting in 2011, it is working on developing new, smaller, thermal engines with reduced fuel consumption and emissions.
"It's a gamble," said one car company executive. "If they're right, they'll reap all the benefit that comes with being first out of the gate in terms of notoriety and pricing power. But if they're not, the break-even point will be much further out than they hope."

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