When Will Electric Cars Go Mainstream? It May Be Sooner Than You Think
The conventional view shows that electric cars will continue to be a niche product for years, plagued by high sticker prices and heavily dependent on government subsidies.
However, a growing number of analysts now argue that this pessimism becomes obsolete. A new report by Bloomberg New Energy Finance, a research group, suggests that plug-in price cars decline much faster than expected, boosted by cheaper batteries and aggressive policies favoring zero-emission vehicles in China and Europe.
Between 2025 and 2030, the group expects plug-vehicles to be competitive with conventional oil cars, even without subsidies, even before fuel economy is taken into account. Once this happens, mass adoption should follow quickly.
“Our forecast does not depend on countries adopting the most stringent fuel standards or climate policy,” said Colin McKerracher, head of advanced transportation analysis at Bloomberg New Energy Finance. “This is an economic analysis, looking at what happens when the initial cost of electric vehicles reached parity. That is when real change occurs.”
If this prediction of what would have huge consequences for the auto industry, oil markets and global efforts to curb global warming.
Last year, plug-in vehicles accounted for less than 1 percent of new vehicle sales in the world, used for high costs. The Chevrolet Bolt, produced by General Motors, sells for about $ 37,500 before federal tax breaks. With gas prices approaching $ 2 per gallon, relatively few consumers seem to be interested.
But there are signs of change. Tesla and Volkswagen each intends to produce more than one million electric vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and all of its new models from 2019 would either be hybrid or fully battery actuated.
Skeptics argue that these movements are mostly marginal. Exxon Mobil, which examines the threat that electric cars could pose to its business model, still expects plug-in vehicle sales to increase slowly, only 10 percent of new sales in the United States by 2040 with little impact on The world oil consumption. Federal Energy Information Authority expects a delay similar decision.
Bloomberg’s forecast is much more aggressive with a projection that plug-in hybrids and fully electric vehicles will account for 54 percent of the world’s new 2040 light sales sold by its combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion dropped more than one-third, about $ 300 per kilowatt-hour.
The Bloomberg report notes that the decrease from $ 73 through 2030 without significant technological advancement because companies such as Tesla increase production in the massive battery factories, optimize the design of the batteries and improve the chemical.
Over the next decade, the report says electric cars will continue to be the subject of government incentives and sales offices in places like Europe, China and California. But as car manufacturers have a greater variety of models and lower costs, electric cars will reach a point where they can stand.
However, this result is not guaranteed. Governments could reduce incentives before plug-in vehicles arrive fully competitive – many states are beginning to tax electric cars.
Battery manufacturers may face a shortage of production equipment or problems that hinder their ability to reduce costs. And the failure of unplanned technology, such as common battery fires, could slow down progress.
“But we’ve tried to be very conservative in estimating where the battery prices go,” said McKerracher, “and we do not see the barriers to electric vehicles becoming cost competitive very soon.”