Electric vehicles: the revolution is finally here
The last 12 months has seen an extraordinary surge in demand for EVs – not just expensive EVs like Tesla but also regular non-descript EVs: “Electric vehicles still only make up about 1 per cent of the global fleet of passenger cars, but sales are taking off rapidly. Within four years, one quarter of new cars bought in China and nearly 40 per cent of those purchased in Germany are expected to be electric, according to BloombergNEF. Global sales of EVs are forecast to reach 10.7m by 2025 and then28.2m by 2030….”
Much of the attention on electric vehicles has focused on the striking success of Tesla or the aggressive ambitions of a group of Chinese companies. But the other important shift over the past year or two has been the response of the established automakers… At September’s Munich Motor Show, the first major European exhibition in two years because of the pandemic, there were almost no new petrol models debuted.” [Emphasis in bold is ours]
The FT article goes on to describe why in the Western world demand for and supply of electric cars is surging.
Firstly, large sums of money have been invested in electric cars: “The electric and connected car industry has attracted more than $100bn in investment since the beginning of 2020, according to McKinsey. That is just the beginning. Carmakers have announced a total of $330bn of investment into electric and battery technology over the next five years, according to calculations from consultancy AlixPartners, a sum that has risen 40 per cent over the past 12 months…Several manufacturers have taken previously unthinkable action: preparing to phase out theinternal combustion engine altogether.
Earlier this year the German company credited with inventing the motor car set out one of the industry’s most ambitious timetables. From the middle of this decade the systems used to build all Mercedes-Benz cars will switch over to producing electric models.”
Secondly, political pressure to phase out ICE cars has been intense: “Emissions rules across Europe led to the first big wave of electric car sales last year. Some 734,000battery models were sold across the continent in 2020 despite pandemic lockdowns, according to LMC Automotive, double 2019’s level and more than the previous three years combined.
The regulatory screws are tightening. In less than a month governments from across the world will congregate in Glasgow for the COP26 climate summit, many expected to be armed with eye-catching pledges to reduce their emissions. Ambitious plans to expand the use of electric vehicles are one of the most obvious ways to meet those targets…
The UK has already announced plans to end the sale of petrol and diesel cars altogether by 2035,with Norway pursuing a more aggressive phaseout date of 2025. The EU is proposing its own 2035de facto ban.”
Thirdly, technology has moved forward to allow carmakers to offer a suite of attractive and affordable electric cars: “After years of hyping concept models at motor shows, carmakers now offer a suite of electric cars for customers to buy, from small city cars to larger family wagons, with dozens more planned in the next few years.
While many are still more expensive than petrol vehicles, they boast substantially lower running costs — even more so as global petrol prices rise — while most governments still offer generous purchase incentives.
There are around 330 pure electric or hybrid models that combine a battery and traditional engine on sale today, according to calculations from AlixPartners, compared with just 86 five years ago. That number will balloon further to more than 500 by 2025, amid a flurry of new releases…
the newer models from large players are much more competitive on pricing, range and performance.
“The reality is a modern day electric car is a bloody good car to drive,” says Polestar’s Goodman. “When [former Renault and Nissan boss] Carlos Ghosn said electric cars were the future 10 years ago he was wrong. But they are today.””