Electric And Hybrids On Display At Frankfurt Motor Show

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Electric vehicle sales were up 22.2 percent year on year for the first half of 2013, but total volume is still very low with just under 19,000 vehicles sold. The Frankfurt Motor Show held last week gave European car companies a great opportunity to show where they think the market is headed, and major car manufacturers all had EVs or hybrid to show.

Electric And Hybrids On Display At Frankfurt Motor Show

New electric and hybrid models

“VW made a U-turn at the show by launching new electric and plug-in hybrid models after years of skepticism,” writes Societe Generale analyst Pierre Bergeron. He quotes Pike Research estimates that European sales of electric and hybrids will reach 827,000 units in 2020, making up 4 percent of all auto sales. Considering these models are expensive, high-end models that’s a lot of room for profit growth, and even holdouts like VW want to get involved.

EV euro sales 0913

VW Group’s operations

“We view VW Group’s operations in hybrid and EVs as the most credible due to a large range of plug-in hybrid gasoline models from the affordable C-segment VW Golf and Audi A3 to the upper-end Audi A8,” said Bergeron.

At the far extreme, Porsche has some presented its new hybrid supercar, the 918, with a combined output of 887 horsepower (when the gas engine is running, electric alone gets 279 horsepower). This upgrade from its first hybrid model, the €110,000 Panamera SE, will cost €775,404.

Bayerische Motoren Werke AG (FRA:BMW) (ETR:BMW), Renault SA (EPA:RNO) (BIT:RNO) (OTCMKTS:RNSDF), Mercedes, and Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) (which currently leads the global hybrid market) also presented at the Frankfurt Motor Show with mostly positive feedback, but the pressure is on. All-electric breakout Tesla Motors Inc (NASDAQ:TSLA) announced earlier this year that it will actively expand its recharging infrastructure and dealerships in Europe over the next few years.

Traditional auto makers, especially VW, have shown that they have more faith in hybrids than fully electric cars, but it’s hard to oversell the attractiveness of never paying for a fill-up – Tesla Motors Inc (NASDAQ:TSLA)’s recharge stations are free to use. Their also not open to other electric cars, so if automakers’ long bet on hybrids is wrong, they may find themselves years behind on building the necessary infrastructure to attract customers. That’s not what anyone expects to happen, but then no one expects to get upset by disruptive technology.

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