Electric cars sold twice as much as hybrids in first years

Electric cars have sold at twice the rate that hybrids did in their first few years of availability, according to a report backed by an industry group released Thursday.

The report, from nonprofit advocacy group the Electrification Coalition, added that concerns stifling sales growth, like driving range and electric vehicle price, will improve in the coming years.

But the fuel efficiency gains for gasoline-powered vehicles may present an added challenge to the growth of the electric car market, a representative of the industry group, the Electrification Coalition, said in a conference call Thursday.

“It’s true that internal combustion vehicles are getting much more efficient… that will be a bit of a problem for the total cost of ownership because as a vehicle gets more efficient it uses less gasoline and that’s part of where you save,” said Jonna Hamilton, vice president of policy for the coalition and one of the report’s authors.

Currently electric cars have an advantage on overall cost, even though they are more expensive to buy, because their fuel and maintenance expenses are less, according to the report.

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Electric vehicles will likely maintain that advantage, since advances in battery technology will make the cars cheaper to buy, the report said.

At current levels, the advantage that electric cars have in fuel costs are significant, the report said.

Based on an efficiency comparing the cost of electric fuel to the cost of gasoline, the report, produced in consultation with PricewaterhouseCoopers, determined that “an electric mile costs 3 cents to drive whereas a gasoline mile costs 12 cents.”

“Assuming a (battery electric vehicle) owner drives 14,000 miles per year, they would save approximately $1,256 in fuel costs annually,” The report said. “Coupled with reduced maintenance and repair costs — BEVs have fewer moving parts and don’t require regular maintenance such as oil changes — the lower annual costs pay for the initial upfront premium, in many cases make owning a (plug-in electric vehicle) less expensive than a conventional (internal combustion engine vehicle) over the lifetime of the vehicle.”

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The report estimated that total vehicle costs would be lower for electric vehicles in the long run, but took into account government incentives that help make the cars cheaper. It’s not clear how long such incentives for electric vehicles will remain in place.

Lowering electric vehicle costs, mainly through improvements in battery technology, will help bring down the overall ownership costs of the vehicles even lower, starting with the up-front expense of buying one, the report said.

“The major lever continues to be the battery technology,” said Diarmuid O’Connell, vice president of business development for Tesla Motors, in a conference call on the report. “We continue to work on that ourselves and we continue to benefit by these huge improvements that are being made by the demands of consumer electronics.”

Since January 2011, more than 110,000 plug-in electric vehicles have been sold, more than double the sales of hybrids when they first debuted in the market, the report said.

“This past month was the strongest month in sales to date with almost 9,000 units sold,” Hamilton said of electric cars.