All parts of the economy will be affected by this technologyby Michael Liebreich, Angus McCrone / September 1, 2016 / Leave a comment
When the first mobile phones appeared, most people assumed they would be used much like normal phones, but on the move. Three decades later, as they push fixed phones to the fringes of our lives, they have eaten entire industries (cameras, alarm clocks, maps) and are set to do the same to others (newspapers, cash handling, music systems). They have driven profound changes in our social behaviour and sparked revolution in almost every sector of the world’s economy.
As it was with mobile phones, so it will be with electric vehicles. It is not just that battery costs are plummeting—down 65 per cent in the past five years. Electric vehicles outperform internal combustion cars in many ways. They drive more smoothly and accelerate better; they require less maintenance and help solve air quality problems. Sure, they have some range limitations and take a while to charge, but for most types of users these are not a problem in practice; it is worth noting that around 40 per cent of cars in the US are second vehicles.
Research and analysis company Bloomberg New Energy Finance (BNEF) expects electric vehicles to account for up to 47 per cent of new car sales by 2040. In the first half of this year, worldwide EV sales were up 57 per cent to 285,000, despite low oil prices.
Tesla, the American automotive and energy storage company, expected to produce 85,000 vehicles this year, has a market value of $32 billion. General Motors, selling nearly 120 times as many cars, is valued only 60 per cent more. We get endless coverage of potential new entrants into the industry, such as Apple, Google and Dyson, but they have yet to launch a single car model. To understand the future of the car over the next decade you need to watch the mainstream companies—they are racing to put electric vehicles at the heart of their strategies. The settlement of Volkswagen’s “Dieselgate” lawsuit in the US included a $2bn commitment to zero-emission vehicles, part of $11.2bn the company will be spending over the next decade to push electric vehicles to 25 per cent of its sales.