When will electric cars take over?
Most people who pay attention today, even those in the automotive and oil industries, recognize that vehicle electrification is the future. But how much are we talking about the future? Forecasts are everywhere on the map. Automakers and governments have begun setting target dates (or, more generally, “desirable targets”) for the end of the oil era. Fossil fuel fans tend to look down on them as unrealistic, and environmentalists ridicule them as desperately shy.
What about independent analysts? Business Consultants, Information Providers, Think Tanks-No matter what you call them, these companies study technology and markets in great detail and thick reports with data-driven forecasts that charge large bills to corporate and government customers. Create a. These outfits are placed by professionals and all have access to the same data, so their predictions about electrification in the automotive industry should be pretty similar, right?
Well, not much. Looking at the numerical forecasts of different analysts, we can see that their forecasts are very different. Of course, comparing apples to apples is difficult for several reasons. For one thing, different branches do not publish forecasts on a coordinated schedule-all branches are constantly updating their forecasts as circumstances change, and this month’s forecast is not what the December forecast is. Certainly not. Pandemic.
Also, different organizations tend to focus on different types of trends. Some organizations elaborate on technological development, while others emphasize political or economic factors. After all, not all are looking at the same time frame. Most reports focus on the present and the near future, but some challenge decades of forecasting.
One of the indicators we often see is the date when electric vehicles start selling old gas burners. Now let’s take a look at the most cited analyst’s predictions about when this event can occur. IHS Markit, which addressed this issue in January 2021, predicts that global sales of plug-in vehicles will exceed 12.2 million units in 2025. Bloomberg New Energy Finance predicts that global electric vehicle sales will reach 8.5 million units in 2025 and more than half of all vehicles sold will be electric vehicles by 2040, in a 2020 report.
According to a recent BNEF report in May 2021, it is perfectly feasible (but not always) that 100% of car sales in the EU will be EVs by 2035. In April 2021, the Boston Consulting Group predicts that electric vehicles will account for more than half of the light vehicles sold worldwide in 2026.
Why are analysts’ opinions so diverse?
For one thing, there are many wildcards in the deck. There is no doubt that EV technology will continue to advance rapidly and prices will continue to fall. However, other factors such as automakers, government and consumer behaviour are unpredictable. Automakers are capricious, and several, including Nissan, BMW, and Toyota, have overturned their electrification policies for many years. At this point, VW and GM seem to be fully electrified, but there is no guarantee that they will succeed.
One or more EV start-ups can be gamers. This is a welcome development. Tesla can’t work alone, but faces long, rocky roads, and not everything is over. Advances in vehicle autonomy will dramatically increase the demand for electric vehicles. When self-driving robot taxis become a reality, owning a petrol car will soon own a horse, as Elon Musk equipped-but he can’t predict when that will happen. can not. Government policy and expansion of charging infrastructure are just a few of the other x factors that make accurate predictions impossible.
All analysts cited here agree in some respects. First, Europe is now leading the electrification competition, overtaking China, and the United States is far behind. The McKinsey Electric Vehicle Index 2020 reported that electric vehicle sales fell 33% in the United States in the first quarter of 2020, while increasing 25% in Europe.
The report surveyed the penetration rates of electric vehicles in 16 countries. Nine of the top ten countries were in Europe, with the United States last ranked. Electric vehicle sales have increased significantly over the past year, but the United States is still not keeping up with its global competitors. IHS Markit predicts that China will account for 44% of the EV market in 2021, Europe will account for about 28%, and North America will account for only 16%.
Another thread common to the various reports is that Tesla has been the market leader in electric vehicles so far. McKinsey said California-based automakers have increased their share of the global electric vehicle market from 12% in 2018 to 16% in 2019, primarily thanks to the global launch of the Model 3.
But this doesn’t last long. In Europe, local competitors have already pushed Tesla out of the top position-IHS Markit shows that the Volkswagen Group will lead the European EV market with a 24% market share in 2020, followed by Renault (16%). ) And Tesla are in 3rd place (8.6%). And there’s even more competition-BNEF predicts that by 2022, over 500 different electric models will be available worldwide.
Another finding that most analysts agree on is the bad news. The current pace of electrification is too slow to avoid catastrophic climate change. According to a new report from the International Energy Agency, “The government’s previous climate commitments, even if fully fulfilled, will require zero global energy-related carbon emissions by 2050. Far below, the world is even a chance. ” Limits global temperature rise to 1.5 ° C. ”
According to the IEA report, if we don’t want to go underwater, we need to stop selling new fossil fuel vehicles and replace them with renewable energy-powered electric vehicles by 2035.