New battery-powered cars from Renault SA (EPA: RNO), Volvo AB (STO:VOLV-A) and Mitsubishi Motors (TYO: 7211) helped to double sales of electric vehicles in Europe last year, a new analysis found. But automakers still face major hurdles in moving these alternative models, including high costs and consumer anxiety.
Nearly 50,000 plug-in vehicles were sold in the European Union in 2013, up from 22,000 in 2012, according to an analysis of official data by the Transport & Environment (T&E) advocacy group, the Guardian reported. Renault’s Zoe, Volvo’s V60 plug-in and Mitsubishi’s Outlander together comprised nearly half of last year’s sales, or about 8,000 models each.
The leading models in 2012 – Opel’s Ampera and Puegeot’s Citroen iOn/C-zero – meanwhile saw their sales drop sharply. “What you are seeing is better cars and better services being offered to the market,” Greg Archer, the clean vehicles program manager at (T&E), told the Guardian.
Overall, electric vehicles accounted for about 0.4 percent of new car sales in Europe last year. In the United States, by comparison, 0.6 percent of total passenger car and light truck sales in 2013 were plug-in models – about 96,000 vehicles.
“Electric cars are growing strongly, but at the same time the simple truth is that they are too expensive for most people to consider,” Archer told the Guardian. Volvo’s V60 plug-in, for instance, cost from £44,275 ($75,000) after a £5,000 ($8,500) UK government subsidy, while Mitsubishi’s Outlander priced at about $47,800 after subsidy and Renault’s Zoe cost around $24,000 after subsidy.
U.S. car buyers can obtain federal tax credits worth up to $7,500 when they buy a plug-in model, and some state governments offer additional incentives. Tesla Motors (NASDAQ: TSLA)'s Model S luxury sedan is priced from $71,000 domestically, while the all-electric Nissan Leaf and plug-in hybrid Chevy Volt each cost around $30,000.
Still, Archer said such government subsidies aren't sustainable in the long-run, and that a more effective way to get automakers to produce electric cars would be to force them to slash greenhouse gas emissions across their entire fleet. In the United States, car manufacturers are now required to nearly double the average fuel economy of new cars and trucks by 2025, to 54.5 miles per gallon, but automakers in Europe are resisting attempts to adopt emissions standards on the continent, the Guardian noted.
Transportation accounts for about one-fourth of total emissions in Europe and one-third of emissions in the United States.
Archer said that while electric vehicles are important for reducing transportation pollution, improvements in diesel and gas-powered cars are even more critical in the near-term. "We will not see large numbers of electric cars on the roads for a decade, so we need to see other steps as well," he said.