How electric cars will change the modern market

The account of electric cars seems like an overnight consciousness,but it stretches back nearly 135 years. Most individuals regard thedevelopment of electric cars as a contemporary occurrence, but theknowledge stretches back nearly since the formation of theautomobile. In fact, some manufacturers and automakers have beendesigning and structuring electric cars since the commencement of theauto industry. Canis says that the motor vehicle industry has one ofthe most competitive markets for all industries (59). The topmanufacturers in the industry are General Motors, which controlsabout 18% of the total market share, closely followed by Toyota atabout 15%. Ford and Chrysler group, two other American motorcompanies, share a total of about 24% of the market (Edmunds.com 1).Over the past decade, motor companies have invested in electric carslike a new product in taking over the industry. Today, electric carshave become synonymous with technological advancements acrossmultiple industries and with their resurgence in the automobileindustry, they will greatly affect the modern market. Toyota andTesla lead the way on the development of electric cars. In thisdiscourse, electric cars denote automobiles that are propelled by oneor more electric motors. They were invented as a solution to reducingthe carbon footprint which concerns over global warming hitting theheadlines. Today, electric cars are growing to be the latest trend inthe motor vehicle industry. The discourse proffers an evaluation onthe way electric cars are likely to change the modern market.

Abrief history of electric cars

Electric engines were first manufactured in the 1880s, when they weremainly used for taxis in New York City (Hordeski 141). At the end ofthe 19th century, they had outdone the traditionalinternal combustion engines in terms of sales. They continued beingsold across the United States of America in the 20thcentury, as improved transport infrastructure such as better roadsincreased favored their development and sales.

Afterthis, the market of electric vehicles narrowed down to morespecialized short range vehicles. These mostly comprised of golfcarts and delivery vehicles for transport and logistics companies,especially in the area of short range cargo movement and loading(Burton 32). After this, engineers begun designing electric enginesthat were mainly used for transport purposes. During this period, thedevelopment of other electric vehicles was minimal. For most of the20th century, electric vehicles were absent from the passengervehicle market, up until before the close of the 20thcentury that the first mass produced electric cars were manufacturedby motor giant General Motors. The first concept car was developed bythe company’s engineers in 1990. After developing the design, GMmanufactured and leased about 1000 electric cars.

Apoor market performance of the vehicles led to their cancelation byGM in 2002. Toyota had earlier stepped up and adopted the design. Ithowever built an electric train to test the performance of theelectric engine. After being contented with the performance, thecompany developed a petrol-electric hybrid car for the Tokyo MotorShow. Till to date, the firm has sold about 3.6 million Priuscars globally. By 2012, the global electric vehicles sales were about5 million (Burton 64). The rising cost of fossil fuel has facilitatedthis growth. Additionally, government subsidiaries and tough fuelefficiency standards have influenced the growth of the electric carmarket, especially in the United States. As of present, the UnitedStates has about 38 electric vehicle products, the highest in theworld.

Globalmarket for electric cars

In2014, people bought roughly 43% of all electric passenger cars(Young 1). Of the new vehicles that were sold in 2014, electric carvehicle sales made up less than half a percent of this. However,according to a Germany energy research, “that tiny wedge of salesaccounts for almost half of all battery-powered passenger vehicles onthe road today” (Young 1). Given this rising demand for theelectric vehicles, the research firm projects that their sales areprojected to rise or develop by more than seven times in 6 years’time. This remark is supported by Center for Solar Energy andHydrogen Research, which adds that the worldwide sum of electric carshas increased dramatically since 2011. The two research teams saythat there is a clear link between government incentives, especiallythrough tax breaks, and a wide adoption of vehicles that are moreefficient in term of energy use.

Asof 2015, the United States leads in all-electric vehicle sales. Theconsumers bought about 117,000 electric vehicles in the year 2014alone. The leading models are Nissan Leaf, Tesla Model S and BMWi3.However, while the country leads in the total number of electriccars, the market share percent for the same still remains below 1%.The United States is closely followed by Norway, recorded almost adouble increase in electric vehicle sales from the recent years. Atthe same time, the Norwegian electric vehicle market share is higherthan that of the United States, standing at 1.6%. Germany’selectric vehicle market share is also on the increase, facilitated bythe country’s progressive and future-focused policies inalternative energy. The same applies to China, whose policies ofsubsidizing the domestic manufacture of electric cars have favoredthe growth for their market share.

Marketforecast

The figure below summarizes the finding of research on the estimatedgrowth of the electric cars market by geographical region. Accordingto the results, the Market growth in Europe has the strongestmomentum. The same is also expected from Japan, China and the UnitedStates.

Figure1: Percentage of New Vehicle production projections per country.

According to the research, it is expected that the electric vehicleswill gain and control more of the car fair or market in the next fewyears. By 2020, it is expected that 40% of the total global vehiclemarket will be controlled by the electric vehicles. This growthcorresponds to over 30 million vehicle units in the year 2020. Thisis an average annual growth rate of about 22%.

Accordingto research, strong and moderate hybrids on the vehicle marketincreased by about 20%, from 1997 to 2013. During this period,marketing and environmental awareness were the main factorsattributed to the growth. The biggest increase was recorded in Japan,closely followed by the United States of America. However, Andermansays that while the global electric cars market seems to maintain itssteady positive growth, there are some companies which are mostlikely to control the biggest electric vehicle market share in thefuture, these are General Motors and Honda (141). The main reason isthat they are the leading companies in terms of investment in thedesigning, manufacture, marketing and selling of electric vehicles.Burton adds that in the future, mainstream car producers, namelyFord, Volkswagen and Toyota, are in the offing to increase theirventure in the development of electric vehicles (132). The maintarget markets are likely to be Europe and Japan, given that theseare the two countries that have the highest reception rate for newmodels of electric vehicles.

According to Burton, the growth of electric vehicles sales is likelyto bring changes in the global vehicle trade (54). Right now, Chinaand the United States are the leading manufacturers and sellers ofmotor vehicles. In addition, Toyota, a Japanese company, isthe single leading manufacturer of all motor vehicles. With theeminent consumer shift to electric vehicles, the vehicle market sharestatistics are set to change. Additionally, the vehicle market’semployment statistics are set to be changed to the growing electricsales. However, the shifts will mostly appear in sales and advancesrather than the production of the electric cars since, Toyota, thelargest carmaker in the world remains one of the largest maker ofelectric vehicles. Burton says that the majority of supplier andassembly work for the electric vehicles that will take place outsidethe United States will end up displacing about 200,000 U.S jobs (21).Burton conducted a research to project the U.S vehicle production andemployment by 2025 (154). According to the findings, the growth inelectric vehicle production will influence market share statistics,such as the number of fuel engines vehicles manufactured and sold peryear. As the growing adult population ensures that the U.S marketdemand for vehicles increases, it is most likely that the highestincrease in the percentage will be recorded for electric vehicles. Assuggested, the development of electric cars has spurned over a longperiod, often falling at times due to other developments, but thefuel efficiency and environmental protection that comes with the carswill contribute significantly to their development in future. In thisregards, electric cars will change the market of cars greatly infuture. In fact, the development of electric cars has already startedto change the dynamics within the car markets.

Conclusion

The paper has forecasted the parameters of the global motor vehiclemarket and industry in the near future, as affected by the entry ofelectric vehicles in the motor vehicle industry. The leading motorvehicle companies have all entered the race for controlling the motorvehicle industry market. Consequently, the sum of electric cars thatare sold annually has increased steadily over the last decade. Fromthe projections, the sales of the electric vehicles are likely toincrease seven-fold by 2020. As an effort to control the marketshare, companies have invested in cost-effective technology andincreased performance standards. These are some of the elements ofensuring that the electric motor vehicles are received more inemerging markets, as they compete to outdo fossil fuel enginevehicles in the future. Electric cars have contributed significantlyto greener environment as well as provided technological means anddesigns for use in other industries. In addition, electric cars havestarted to change the dynamics of the automobile industry as morepeople realize the importance of environmental protection and fuelefficiency.

Works Cited

Anderman, Menahem. “Assessing the Future of Hybrid and ElectricVehicles: The 2014 xEV Industry Insider report”. AdvancedAutomobile Batteries. (2013).

Burton, Nigel. History of Electric Cars. Wiltshire, UK:Crowood, 2013. Print.

Canis, Bill. U.S. Motor Vehicle Industry: Confronting a NewDynamic in the Global Economy. New York, NY: DIANE Publishing,2011. Print.

Edmunds.com. Market Share by Manufacturer. Web. 4 March 2015.

Hordeski, Michael F. Hydrogen &amp Fuel Cells: Advances inTransportation and Power. The Fairmont Press, 2009. Print.

Young, Angelo. “Global Electric Car Market: About 43% of allElectric Passenger Cards Were Bought in 2014, Say German Clean EnergyResearchers”. International Business Times. 24 March 2014:Web.