September 26, 2013 – While hybrid vehicles (which pair a conventional internal combustion engine with an electric motor) have become an established segment of the overall automotive market, the limited availability of plug-in electric vehicles (PEVs)—including plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs)—has inhibited sales growth in a number of major markets, says Navigant Research.

Major automakers including Honda, Volkswagen, Hyundai and others will be launching PEVs in a large number of countries over the next two years, however, adding to the list of available models, sparking increased consumer interest and accelerating sales opportunities, adds the research organization.

According to one of its recent reports, worldwide sales of light-duty hybrid and plug-in electric vehicles will reach 6.6 million units annually in 2020, representing almost 7% of the total light-duty vehicle market.

“This growth is being driven not only by the inherent appeal of the vehicles, but also by consumer demand for vehicles that cost less to operate than traditional internal combustion engine vehicles, government incentives and a rebounding economic climate,” said Dave Hurst, principal research analyst with Navigant Research.

Falling prices are also driving demand for electric vehicles. The cost of battery packs, which can account for as much as half of PEV costs, will continue to decrease significantly during the forecast period, according to the report. Hybrids and PHEVs are anticipated to see a 10% and 26% decline in battery pack costs by 2020, respectively, while BEVs will likely remain flat, but see improvements in vehicle range and performance during the same period.