Battery Power Looking Promising For Light Commercial Market, Analysts Finds.

Battery Power Looking Promising For Light Commercial Market, Analysts Finds.

By John O'Dell June 17, 2010

Even as debates continue to rage about the willingness of consumers to accept battery-electric passenger vehicles, the market for light commercial EVs is heating up.

Vehicle makers such as Ford Motor Co., Mercedes-Benz parent Daimler AG and France's Renault will sell almost 200,000 electric-drive vans, buses and light-duty trucks in Europe and North America combined in 2016, up from a negligible amount last year, as worldwide fuel-economy and emissions standards get stricter and vehicle batteries perform better, according to research firm Frost & Sullivan.

Most commercial vehicle operators keep their trucks and vans far longer and put far more miles on them than do consumers with passenger vehicles, making them very sensitive to fuel and maintenance costs. EVs typically cost much less to operate because they have fewer moving parts in the powertrain, require less maintenance and have far lower fuel costs.

Add to that lit of benefits an expected increase in battery efficiencies that will enable the typical single-charge range for a light-duty electric truck to triple to about 180 miles over the next six years, while recharging time drops to about 15 minutes from between six and eight hours today and the result makes a compelling sales pitch for EVs, said Sandeep Kar, global manager of commercial vehicle research at Frost & Sullivan.

With the cost of lithium-ion batteries expected to fall over the next few years and petroleum fuel prices forecast to rise, more fleet owners will be able to justify the extra cost of buying an EV relative to conventionally powered commercial vehicles because they'll be able to recoup the difference in four years or less from fuel savings alone, Kar said in a Webcast analysis of the market for electric-drive commercial vehicles..

As a result, European companies, municipalities and utilities will buy about 165,000 battery-electric vans, buses and trucks in 2016 while their North American counterparts will acquire about 26,000 units, the research firm predicts.

With Daimler and Ford developing EV versions of the Mercedes-Benz Sprinter and Ford Transit Connect small cargo vans, the two companies will combine for about a third of the European light-duty EV market. In North America, Daimler sales alone will account for about 20 percent of the market, according to the analysts.

While light-duty EV sales will jump by more than tenfold each year in both regions, European unit sales will outnumber those of North America because of the greater likelihood that more European governments will invest in a sufficient EV-charging infrastructure over the next few years than will the U.S. federal and most state governments.

"Other than California and some places in Georgia and Florida, there really isn't a comprehensive charging structure," said Kar. "That needs to change."

By 2016, EVs will account for about 8 percent of the European light-duty truck market, assuming some government subsidies for purchases of alternative-fueled vehicles, according to Frost & Sullivan, which didn't estimate EV market share for North America.

Even without European government subsidies, EVs still will account for about 6 percent of European light-duty vehicles because of the shrinking payback period due to more expensive fuel and cheaper batteries, according to Frost & Sullivan Senior Analyst Vishnu Muralidharan.

Danny King, Contributor

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.