Published July 13, 2012
By Philippe Crowe
Frost & Sullivan research service has published a study titled 360 Degree Perspective Of The Central And Eastern European Electric Vehicle Industry.
This research provides an overview of the industry in Central and Eastern Europe (CEE), unit shipment forecasts for EVs and charging stations as well as an overall industry environment analysis. In its study, Frost & Sullivan's analysts thoroughly examine the following: EVs and charging infrastructure for EVs.
According to the study, electric vehicles are emerging as strong candidates to meet the demand for convenient, eco-efficient and sustainable mobility solutions.
Electric vehicle (EV) sales in CEE, a region with over 100 million people and solid macroeconomic environment, are anticipated to cross the 60,000 mark by 2017 and witness even stronger growth after 2017, generating revenue opportunities for existing and new market participants in e-mobility.
The EV market in CEE is set to expand due to the increasing demand for convenient, eco-efficient and sustainable mobility solutions predominantly in dynamically developing urban areas as well as due to anticipated optimization of the supply chain and therefore substantial EV cost reductions.
“Rising personal incomes, the process of urban sprawl and changing mobility preferences in CEE are pushing the demand towards new sustainable solutions in personal mobility,” notes the analyst of this research. “This will catalyze the development of the EV market until 2017. the EV market until 2017.”
Pragmatic enthusiasm is set to be the dominant approach as customers and market participants seek convenient urban mobility solutions which can support cost- effective total cost of ownership over the lifecycle of vehicles, both for private as well as business customers. However, there is still a 35-40 percent price reduction potential which can be achieved in 2-3 years when it comes to battery technology, which means cost factors will diminish in impact on the industry's development.
Frost & Sullivan estimates the EV market to grow at a phenomenal 151-percent rate over 2011-2017. The highest growth is expected after 2014-2015 assuming full-scale government incentives - including CO2-based taxation of new vehicles and the ability to use bus lanes which is expected to appeal specifically to corporate fleets - are in place in most countries across CEE.
Key challenge will be to optimize costs of the charging stations and avoid shifting high cost onto customers.
The lack of government support (especially soft incentives, such as the ability to use bus lanes and free parking) in the short-term is expected to restrain industry growth potential. Financial subsidies are not expected to have a strong direct impact on the industry, yet appear to be necessary in order to catalyze its development at the initial stage.
“When it comes to long-term development of charging infrastructure for EVs, CEE will have to face similar challenges to Western European countries - safety of charging process, network management and financial transactions services, among others,” cautions the analyst. “However, setting up a charging infrastructure in CEE in residential areas (most charging is likely to be done in residential areas) will require specific solutions, and only around 7 percent of CEE's population lives in houses, where garage charging could be an option.”
This challenge will increase its impact in the medium- to long-term as EVs are expected to start penetrating the middle class segment. To overcome this challenge, charging station suppliers and operators will have to provide advanced solutions with such functions as advanced load metering and control if multiple users are connected to the charging station.
“The key challenge will be optimizing costs of the charging stations manufacturing, installation and operation in order to avoid transferring high costs onto the customer, which would negatively impact the demand,” concludes the analyst.