Electric Vehicles Gain Momentum as Automakers Bet on Their Future

Strategic Insights -

Automakers General Motors and Chrysler, kept afloat by $17.4 billion in emergency loans, are turning to electric vehicles as a way to ensure their long-term viability. Despite Toyota's skepticism about the U.S. market, the world's leading hybrid maker has plans to introduce a new electric model, the tiny urban commuter, in 2012. As the market for electric vehicles grows, automakers are betting on this emerging technology to stay competitive.

Key Takeaways:

  • General Motors and Chrysler are banking on electric vehicles to ensure their long-term viability, with Chrysler forecasting sales of over 100,000 electric cars per year by 2013 and GM planning to sell 60,000 of its first electric car shortly after it goes on sale in 2010.
  • Toyota, the world leader in hybrid-powered vehicles, has plans to introduce a new electric model, the tiny urban commuter, in 2012, but is skeptical about the U.S. market for pure electric cars.
  • The market for electric vehicles is growing rapidly, with gas-electric hybrids and other electric vehicles making up 2.2% of the U.S. market in 2007 and expected to grow to 7% by 2015, according to J.D. Power and Associates.
  • Even Chinese automaker BYD Co., which doesn't sell cars in the U.S., has plans to bring plug-in vehicles to the market in 2011.
  • General Motors has partnered with LG Chem Ltd. of South Korea to provide the batteries for its Chevrolet Volt, a range-extended plug-in electric car that can travel up to 40 miles before a gasoline-burning generator has to recharge the battery.
  • Chrysler plans to have four electric models for sale in 2013 and aims to have 500,000 electric vehicles on the road by then.
  • Ford also announced plans for an electric car at the Detroit auto show.

Statistics:

  • $17.4 billion: The amount of emergency loans received by General Motors and Chrysler to keep them afloat.
  • 2.2%: The percentage of the U.S. market that gas-electric hybrids and other electric vehicles made up in 2007.
  • 7%: The expected market share of electric vehicles by 2015, according to J.D. Power and Associates.
  • 2010: The year GM plans to sell its first electric car, which it expects to sell 60,000 of shortly after it goes on sale.
  • 2012: The year Toyota plans to introduce its new electric model, the tiny urban commuter.
  • 2013: The year Chrysler forecasts it will sell over 100,000 electric cars and will have four electric models for sale.
  • 2015: The year J.D. Power and Associates expects electric vehicles to make up 7% of the U.S. market.
  • 400 pounds: The weight of the battery packs for the Chevrolet Volt, which are being made by LG Chem Ltd. of South Korea.

Sources:

  • Bloomberg News
  • General Motors Corp.
  • Chrysler LLC
  • Toyota Motor Corp.
  • J.D. Power and Associates
  • Cerberus Capital Management LP
  • Edmunds.com