Electric vehicle sales will hit 3.8 million by 2020

It was a rough year for electric vehicle sales, but is there hope for the future?

2012 was a hit and miss year for electric vehicles. The Tesla Model S proved that electric cars can have performance that's equal to or better than its gas-powered foes when it was named the automobile of the year . On the other hand, EV sales were disappointing and consumer interest seemed to be slipping .

Still, there's a growing market for electric cars. According to a new report from Pike Research, the market will reach annual sales of 3.8 million EVs worldwide by 2020.

“Sales of EVs have not lived up to automakers’ expectations and politicians’ proclamations, but the market is expanding steadily as fuel prices remain high and consumers increasingly seek alternatives to internal combustion engines,” says Dave Hurst, a senior research analyst with Pike.

And compared with the growth rate of gas-powered vehicles, the outlook for EVs is good, Hurst continues: "Indeed, sales of plug-in EVs will grow at a compound annual growth rate of nearly 40 percent over the remainder of the decade, while the overall auto market will expand by only two percent a year.”

But there will be regional differences in which types of EVs have better sales. In the United States and Latin America plug-in hybrid electric vehicles are expected to be more popular than battery electric vehicles because of their longer driving range. The opposite will be true for the rest of the world. Also, in 2020, the largest market for hybrids will be Japan and the United States is expected to be the largest market for plug-in electric vehicles.

Car companies have a long way to go, however, to reach these projections. Building up adequate infrastructure for plug-in EVs will go a long way in attracting consumers. But in 2012 only 120,000 plug-in electric vehicles were sold worldwide.

Photo: Flickr/Ian Muttoo

This post was originally published on Smartplanet.com