EYE on the MARKET

Welcoming the Era of Next-Generation Vehicles

Next-generation vehicle definitions and 4 major categories

Next-generation vehicles have attracted attention as a way to save energy and reduce the global environmental load. According to the Next-Generation Vehicle Guidebook 2016-2017 (published jointly by the Japanese Ministries of Environment, Economy, Trade and Industry, Land, Infrastructure and Transport), next-generation vehicles are defined as environmentally-friendly vehicles with high fuel performance and low or no emissions of air pollutants, including nitrogen oxides (NOx) and particulate matter (PM). The four major categories of next-generation vehicles are (1) electric, (2) hybrid, (3) plug-in hybrid and (4) fuel cell.

TYPE 1 : EV : Electric Vehicles (EVs)

Electric vehicles (EVs) are powered by an electric motor charged by off-vehicle sources. They do not emit CO₂, and operational noise is reduced significantly. Compared with gasoline vehicles, EVs have a more simplified structure with fewer parts. The parts are also smaller, making it relatively easy to decrease the overall size and weight of the vehicle itself.

TYPE 2 : HV : Hybrid Vehicles (HVs)

Hybrid vehicles (HVs) are powered by two or more distinct sources. The most common combination is a gasoline engine and an electric motor. The electric motor is used when starting and driving at low speeds while the gasoline engine is employed when accelerating. Utilizing the advantages of each power source, HVs realize low fuel consumption and reduced CO₂ emissions.

TYPE 3 : PHV: Plug-in Hybrid Vehicles (PHVs) / Plug-in Hybrid Electric Vehicles (PHEVs)

Plug-in hybrid vehicles (PHVs)/ plug-in hybrid electric vehicles (PHEVs) are powered by a gasoline engine used in combination with a battery and an electric motor charged by off-vehicle sources. PHVs/ PHEVs are powered by the electric motor whose charge is capable of powering the vehicle for a certain distance and discharges zero CO₂. When the battery charge drops, the gasoline engine is engaged to power the vehicle and recharge the battery, which enables it to travel longer distances.

TYPE 4 : FCV : Fuel Cell Vehicles (FCVs)

Fuel cell vehicles (FCVs) are powered by an electric motor whose energy is produced by the chemical reaction of oxygen and hydrogen in the fuel cell. Because the electric power is generated by this chemical reaction, only water is discharged in the process. These have attracted global attention as extremely eco-friendly vehicles.

The market share of EVs and FCVs will grow after 2040

While next-generation vehicles are thought of as the wave of the future, they first appeared back in 1873, way before gasoline-powered vehicles. Automobile production in the United States around 1900 was approximately 4,000 units, 40% of which was EVs. The rapid improvement of gasoline vehicle performance and their lower prices, meant that EVs disappeared from the market around 1920. It wasn’t until the 1970s that interest in EVs reemerged against the background of increasingly serious air pollution and concerns about dwindling oil resources. Japan took the initiative in the research and development of EVs; however, poor battery performance and improved exhaust purification technology for gasoline vehicles dampened enthusiasm.

This started to change in the 1990s when the State of California enacted its Zero-Emission Vehicle (ZEV) Programme. This prompted major automobile manufacturers around the world to initiate full-scale development of EVs. In 1997, Toyota was the first automobile manufacturer in the world to announce production of a hybrid vehicle and other manufacturers are now accelerating the development and spread of EVs, HVs, PHVs/PHEVs, and FCVs.

According to the International Energy Agency (IEA), sales of gasoline and diesel-powered vehicles will peak in 2020, after which HVs and PHVs/PHEVs are expected to take the lead in the automobile market. After 2040, it is predicted that the number of vehicles with internal combustion engines will steadily decrease as the number of EVs and FCVs grows.

Global Projection of Next-Generation Vehicle Ratios in Passenger Vehicle Sales

Source: IEA Energy Technology Perspectives 2015