Electric car sales forecasts too optimistic says Volvo

It’s a “very difficult challenge” to make them affordable

By Gavin Conway on March 21, 2012 3:39 PM

Volvo’s President and CEO Stefan Jacoby has fired a broadside at the European Union, saying that its predictions for the take-up of electric cars are “unrealistic”.

According to the European Commission’s own study, it forecasts a market share of up to 4% for pure-electric vehicles and plug-in hybrids by 2020, rising towards 30% by 2030.

"Both predictions are unrealistic,” says Jacoby. “Considering the lack of coordinated governmental incentives and the high battery system costs, the market share for electrified vehicles will struggle to pass the 1% mark by 2020.”

Volvo also casts doubt on the viability of the European Commission’s target to cut greenhouse gas emissions in the transport sector by at least 60% by 2050. The EC calls for the use of conventionally fuelled cars in cities to be halved by 2030 and phased out entirely by 2050, another doubtful forecast according to Volvo.

"European car manufacturers are facing a very difficult challenge when CO2 legislations requiring electrified cars are implemented without initiatives that make these cars affordable for a growing number of consumers," said Jacoby.

"Pan-European subsidies and incentives are needed to support a successful market introduction. Unfortunately such necessary initiatives are jeopardised by the current debt crisis," explained Jacoby.

Volvo has its own electrification programme and its V60 Plug-In Hybrid (pictured) goes on sale late this year. It also runs a fleet of pure electric prototype C30 hatchbacks as research vehicles, has unveiled a PHEV version of the XC60 and shown off ideas for range-extender concepts. Volvo also recently announced a clever technology tie-up for its electric vehicles with mobile company Ericsson.

If Volvo is right and we’re looking at 1% market share for EVs by 2020, that’s likely to be in the range of 150,000 vehicles (13,500,000 cars were sold in Europe last year, so factoring in a very modest increase in the next eight years is what got us to that number).

But Volvo’s outlook also supposes no significant breakthrough on the cost of batteries in the next eight years. Is that a likely scenario? We doubt it, but we’d also love to hear what you think below.