Electric vehicles are still rare sightings on most roads today. But in a couple of decades, that won’t be so. Analysts predict that more than a third of all passenger cars will be run on batteries, not gasoline or diesel in a few decades’ time. The electric car revolution has just begun. And it’s here to stay. The global shift towards electric vehicles will create an upheaval for the auto industry. It will affect various industries and people, from oil majors to spark plug manufacturers, whose products won’t be needed any more. There’s a lot happening in the global electric car market. Consumers looking for their next vehicle shouldn’t be shocked when they see more electric and hybrid options in showrooms. For all the hype, electric cars and hybrids still make up a tiny percentage of vehicle sales—and for good reason. Batteries are expensive and heavy, and vehicles need charging infrastructure. Low gas prices (at least in the USA) blunt the “save on fuel” sales pitch.
But take a close look and it will become evident that going electric isn’t that risky at all. The international winds of regulation blow towards gas and diesel alternatives. The industry’s next big thing—autonomous vehicles—will be battery-powered. Even consumers, especially those at the top of the market, look to be interested in electric vehicles. A flurry of news reports highlight just how rapidly that change could happen. Tesla announced that its Model 3, a mass-market electric car, would start rolling off production lines soon, with the first handful delivered to customers later this month. France made an announcement recently that it would ban the sale of gas-powered cars by 2040.
Then there is Bloomberg New Energy Finance’s latest electric car report, which states why electric cars are the way of the future and when they are projected to take over the market. The report noted that although electric vehicles are currently a tiny fraction of the car market, they could reach an inflection point some time between 2025-30. After that, electric car sales are slated to increase rapidly. Driven by the falling cost of batteries and the growing number of automakers producing a wider variety of electric cars, the Bloomberg report expects that electric cars will account for 54% of all car sales globally by 2040.
Volvo is the latest automobile manufacturer to be peeping into the future with its electric car plans. Starting in 2019, every new model the Swedish automaker releases will run at least in part on electric power. Volvo is the first major traditional automaker to charge ahead into the domain of electric vehicles with a deadline of just two years for the switch. Between 2019 and 2021, Volvo will roll out five battery-powered models, along with a cavalcade of plug-in hybrids and ‘mild hybrids’, which supplement internal combustion engines with batteries and motors. The company isn’t killing gas yet, but it’s on its way.
It’s good news for the planet. The shift to electric vehicles will disrupt the fossil fuel industry. The 530 million total electric cars forecast to be on roads by 2040 will require eight million fewer barrels of oil a day to run. One of the big pitches for electric cars is their positive benefit for the climate because they reduce the use of oil. But they will require a lot more power from the electric grid. Energy use from electric vehicles is expected to rise 300 times above current demand, putting more strain on power generation. How that energy is produced will go a long way towards determining how climate-friendly electric cars actually are.
Diesel sales are down 20% in France and Belgium, and 45% in Norway compared to 2011 figures. Big cities like Athens, Paris and Madrid have announced that they will ban diesel cars by 2025. France just said it aims to stop sales of diesel and gas vehicles by 2040. And the European Union will implement new and aggressive CO2 emission limits in 2020. Meanwhile, in China, drivers purchase half of the world’s electric vehicles—the vehicles must make up 12% of each manufacturer’s sales by 2020.
More than 30 fully electric vehicles are available in the international market, including models from BMW, Mercedes-Benz and Tesla. There are dozens of plug-in hybrid models on dealer lots. Even large American automakers have their hybrids and electrics, including a Ford police car and Chevy’s $30,000 Bolt EV. But widespread adoption of battery-powered vehicles would not be without challenges. A large-scale switchover to electric cars could create problems for power grids, could mean roads lined with charging poles and could also leave a big hole in public coffers as fuel duty dries up.