Why electric cars are everywhere except right here, right now

By Businessweek , July 20 2017
Why electric cars are everywhere except right here, right now

It might seem like there’s more news about electric cars lately than actual electric cars on the road.

Tesla took a step toward becoming a mass-producer this month when the US$35,000 Model 3 sedan started rolling off a California assembly line. Volvo said it will begin phasing out cars that run just on fossil fuels in two years. France plans to eliminate gasoline- and diesel-powered vehicles entirely by 2040.

Automakers are pouring billions into an uncharted electric future because the cars are getting cheaper more quickly than expected, and because governments worldwide want concrete action against climate change. But these ambitious plans present a jarring contrast to what’s actually happening today in showrooms.

In the U.S., for instance, low gasoline prices have super-charged sales of pickups and sports utility vehicles.

1. How many electric cars do people buy today?

Battery-powered and plug-in cars may have been around since the 1800s, but from a sales sense, they’re still in their infancy.

Chinese consumers bought about 289,000 last year, more purchases than any other market, according to Bloomberg New Energy Finance. Europeans purchased 215,000 and U.S. consumers bought 150,000.

That’s compared with 92 million internal-combustion vehicles sold globally in 2016, and 17.6 million in the U.S. alone.

2. What about tomorrow?

Battery-powered cars and gas-electric plug-in hybrids are poised to grow so fast that, by 2040, they’ll make up more than half of vehicles sold globally, according to BNEF forecasts.

3. What major market is likely to reach a tipping point first?

China. And for different reasons than in other markets. The Chinese are grappling with pollution and worried about climate change. But the nation’s leaders want to move away from gasoline for a different reason: heavy dependence on oil imports is seen as a key strategic vulnerability. To protect itself, China is eyeing quotas that by 2025 could mean that as much as a fifth of new vehicles will be battery-only or plug-in, according to University of California, Davis researchers.

4. Why is Volvo getting rid of gasoline-only cars?

It’s partly about carbon but also about diesel. European automakers and their regulators have long relied on diesel to combat air pollution, but that strategy has been undercut by Volkswagen’s cheating scandal.

New European rules for 2020 will cut allowable carbon dioxide emissions by a third, a bigger drop than diesel alone can provide. European shoppers can now select from 52 vehicles with fully or partly electric motors; this number will grow to 95 by 2021, BNEF says.

5. Does this mean goodbye gasoline?

No, just less gas, at least for the near future.

Toyota sold 1.4 million gas-electric hybrids in 2017, and expects to continue doing so for many years. In the long run, according to the Japanese giant, fuel-cell cars powered by hydrogen will be the big winners.

But even as carmakers are pouring large sums into research and development of electric vehicles and batteries, they’re also working to get more out of the internal-combustion engine. Toyota just introduced a four-cylinder Camry engine that converts 41 percent of the energy in gasoline into usable power. That’s double the thermal efficiency from twenty years ago.

6. How does Tesla fit in?

Elon Musk plans to be building 20,000 of his cheaper Model 3 sedans a month by December, below predictions the CEO made last year.

With traditional automakers sinking ever larger sums into electric car and battery research, Musk may not have the post-petroleum spotlight mostly to himself for long. But he’s still widely credited as the visionary whose first electric cars captured the public imagination like no others.

7. How much do electric cars cost?

Because of the batteries they require, electric cars will be more expensive to build than their gasoline counterparts for about a decade, BNEF says. For now, manufacturers must essentially give them away to meet the California emissions requirement.

GM was said to anticipate losing as much as US$9,000 on every Chevrolet Bolt that leaves a showroom before sales began. Fiat Chrysler CEO Sergio Marchionne griped three years ago that he hoped nobody bought the Fiat 500e electric car, “because every time I sell one, it costs me US$14,000.”

Long recharging times mean the most convenient way to replenish a battery is to plug in overnight. This is an option mostly for people who can afford to purchase their own recharging equipment and install it in a private, lockable garage.

In the U.S., low gasoline prices make it difficult for electric cars to compete. California regulators reported in January that more than three-quarters of survey respondents had yet to seriously consider a plug-in electric car.

9. What needs to change to get to an electric-car future?

Battery costs are the single most important factor, according to BNEF. Lithium-ion batteries, plus the necessary packaging equipment, will drop to $73 per kilowatt hour by 2030, from $273 currently, BNEF says.

A shortage of both in-home and public recharging stations remains a massive, unsolved challenge, the research group says. Public awareness and enthusiasm for EVs needs to grow, and this in turn will encourage governments to maintain public subsidies as EV technology matures.

Qantas - Qantas Frequent Flyer

09 May 2013

Total posts 138

I own a Model S and an X, the issue i find with the concept of electric cars (especially here in australia) is most people think range is super important, which i agree to. It was'nt a problem for my usage pattern. Plus, i think all these new technologies will improve overtime. When i got my S, the maximum range was at 502kms, now you can get them spec'd upto 680kms all within 3 years!

Second is the cost. Obviously, with the entry of Model 3 at around AUD$50K, this should change few minds.
Thirdly, no incentives from local or federal govt. In US, ev's get car pool lane access, plus rebates on taxes and other fees (in europe, especially scandinavia, EV's get rock star status)
I think the point of not being able to charge quickly has'nt been an issue for my purposes. We plug in our cars at night time (just like one would charge their phone) and the car is filled up for next day use. 
However, due to our usage, we need to charge the cars on day time on saturday and sunday to use our solar charging to maximise our benefit and not charge every night.

Qantas - Qantas Frequent Flyer

21 Mar 2013

Total posts 132

It makes sense for clean-power nations like NZ and Norway, but until we fix our dirty, under-powered grid, (or Ziggy makes us more comfortable about the n-word) I'm not sure we'll move away from the benefits of petrol. 


19 Sep 2013

Total posts 203

Not sure about (2), as there are no signs that EVs will make significant inroads into the ICE marketplace. In fact, in countries where the subsidies have been removed, sales have plummeted to almost zero. And currently no country has the additional electrical energy capacity to charge all those EVs - recently it was suggested that charging may have to be restricted from peak time slots. 

Have to love comments from folks not involved in technology who seem to think that it's cost constantly reduces - if that was the case, we all would be driving in $500 cars and use $20 mobiles. And please spare me comments about how new battery technologies will magically appear to solve all the problems of EVs.

Virgin Australia - Velocity Rewards

23 Mar 2015

Total posts 52

Australia as a nation is being pathetic about electric cars, most drivers seem to be aggressive petrol heads and hung up on status cars for which they pay insane amounts of money. As for clean power, as long as the government is owned by the coal and mining industry, the country is screwed! but the key element of removing street level city pollution is fulfilled by EVs and it is very easy in this sunny country to setup solar panels at home to get free driving and clean power. 

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