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Report Forecasts Robust Hybrid Growth While EVs Lag

The Roland Berger consultancy calls its 2025 forecast optimistic, meaning hybrid sales growth in the U.S. and Europe will depend on strict emissions and fuel-economy regulations and large investments in battery-recharging infrastructure.

TOKYO – Roland Berger Strategy Consultants predicts hybrids will account for 8% of total vehicle sales in the U.S. and 7% in Europe in 2020, then grow to 20% and 25%, respectively, in 2025.

The consultancy further predicts electric-vehicle demand, still well below 1% in each market, will grow from 2% in 2020 to 4% in 2025 in the U.S., and from 2% to 6% in the same time frame in Europe. The report provides no sales forecasts.

Roland Berger characterizes its 2025 forecast as optimistic, meaning hybrid sales growth is dependent on strict carbon-dioxide-emissions and fuel-consumption regulations, high energy costs and high investments in battery-recharging infrastructure.

In other major markets, the consultancy estimates that hybrids will account for 4% of sales in China in 2020, skyrocketing to 27% in 2025, while EV sales will comprise 4% of the Chinese market in 2020 and 5% in 2025. The share of hybrids in Japan is projected to reach 20% in 2020 and nearly 40% in 2025. EV sales, currently well below 1% in Japan, are projected to increase to 2% and 3% during the period.

Roland Berger envisions virtually no growth in the share held by natural-gas vehicles outside of Europe. In the U.S., the consultancy is forecasting 1% in both 2020 and 2025; zero growth in Japan both years; and in China, 1% in 2020 and 2% in 2025. In Europe, it expects natural-gas vehicles to account for 2% of new-vehicle demand in 2020 and 5% in 2025.

Related to its hybrid and EV forecast, Roland Berger estimates the cost of lithium-ion batteries will fall to $260/kWh in 2020 from $440/kWh in 2012.

Breaking down costs, the consultancy projects a nearly 33% decline in raw material and processing costs, from $150/kWh to $100/kWh; a nearly 50% decline in cell-manufacturing costs, from $190/kWh to $100/kWh; and a 40% decline in module- and battery-production costs, from $100/kWh to $60/kWh.

Note that with the discontinuation of the Civic, Insight and Acura ILX hybrids, Honda will have made a complete conversion to Li-ion batteries for its hybrid-vehicle lineup. All Honda hybrids now use lithium batteries supplied by Blue Energy, the automaker’s joint venture with GS Yuasa. Included are the Accord, CR-Z, Fit, Freed, Grace, Jade, Legend and Shuttle hybrids.

Toshiba supplies the battery for the Fit EV.

Among other Japanese automakers, Nissan and Mitsubishi have switched to lithium batteries for their entire lineups of hybrids and EVs. Toyota employs lithium batteries only for the RAV4 and eQ EVs, Prius Plug-In Hybrid and one grade of the Estima Hybrid.

In South Korea, Hyundai and Kia have gone 100% lithium.

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