Speaking at the CAR Management Briefing Seminars held this week in Michigan, Mike Omotoso, senior manager of powertrain forecasting at LMC Automotive, highlighted that despite all the hype and billions of dollars of investment, battery electric vehicles' (BEVs) share of US total light vehicle sales is expected to remain below 1% through 2020. Even if plug-in hybrids (PHEVs), such as the Chevrolet Volt and the Ford Fusion Energi are included, the share will only increase to 3% by 2020.

‘There is clearly a disconnect between what the federal government and the state of California are looking to achieve and what the majority of consumers actually want,’ said Mr Omotoso. ‘Even with a federal tax credit of $7,500, the price premium of most electric vehicles is still too high relative to the payback period.’

However, advancements in technology and investment should alleviate some of consumers' current concerns with PHEVs and BEVs, which include limited driving range and a lack of a public charging infrastructure, according to Mr Omotoso.

Despite the low market share outlook, LMC Automotive forecasts the volume of BEV and PHEV sales to more than quadruple over the next 10 years to 250,000 units. Stronger demand will be driven by expected higher gas prices, lower costs for the Li-ion batteries and increased model activity. The 2025 Corporate Average Fuel Economy (CAFE) target of 54.5mpg fleet average will also play a key role in the growth of BEVs and PHEVs.

Yet, there is still room for diesel development, says the company, indicating that the diesel light vehicle market is currently dominated by heavy-duty pickup trucks and passenger cars from German automakers, but the share of US light vehicles has continued to hover in the 3% range.

Increases in model activity this year in other segments, including new diesel versions of the Chevrolet Cruze, Jeep Grand Cherokee and Ram 1500, will help propel diesel engines' share of light vehicle sales to nearly 8% by 2018. Compared to the 50% share in the European market, this remains small – although it more than doubles the US market share in 2012.

There is plenty of room for fuel economy improvement of conventional powertrains, with turbocharging and gasoline direct injection (GDI) at the top of the list, adds LMC Automotive. Already standard for many diesels, turbocharged four-cylinder engines are replacing naturally-aspirated V6 engines, and turbocharged V6 engines replacing naturally-aspirated V8s. LMC Automotive expects the share of GDI engine production in North America to grow from 30 percent in 2012 to 55 percent by 2018.

‘You get the best of both worlds with turbocharging and GDI: the same or more power than with a larger, naturally aspirated engine, and better fuel economy,’ said Mr Omotoso. 

Even with the advancements in alternative powertrains, LMC Automotive expects the gasoline ICE will remain the dominant powertrain choice for the foreseeable future. However, the gasoline ICE's share of light vehicle sales by fuel type is expected to decrease from 90% in 2010 to 72% in 2020 as alternative powertrains gain ground over the next few years.