Disrupting the Automotive Industry: The Rise of Electric Vehicles
The automotive industry has been steadily transitioning from gas to electric power for some time now. And the change will only increase with battery-powered vehicles taking over as America's new "fuel."
Or so they say.
The thing is, electric vehicles (EVs) have been around for a while now. In fact, EVs were actually some of the first automobiles ever invented. So why haven't they taken over the automotive market?
The simple answer is: cost. EVs have always been more expensive than gas-powered cars. But that's changing. The coming EV disruption is going to be massive, and many still underestimate it.
"I really do encourage other manufacturers to bring electric cars to market. It's a good thing, and they need to bring it to market and keep iterating and improving and make better and better electric cars, and that's what going to result in humanity achieving a sustainable transport future."
-Elon Musk
EVs by 2030
Recently, the International Energy Agency (IEA) projects that the global EV stock will reach 230 million vehicles by 2030, with annual sales of 46.8 million vehicles.?
The IEA has tended to underestimate the take-up of new technologies in the past. Tony Seba, co-founder of Stanford-based think tank RethinkX, believes we are radically underestimating the adoption of EVs.
"As the utility of old vehicles relying on fossil fuels and a human driver rapidly approaches zero, most people will stop owning vehicles altogether, instead accessing them when needed, having goods delivered autonomously, and traveling with smaller vehicles when convenient."
Woah, did he just say "as human drivers rapidly approach zero?"
The future of EVs will be a radical one, especially if self-driving cars become the norm. But that's a story for another day.
In the meantime, the disruption of the automotive industry is well underway. And it's only going to accelerate from here. All in all, EVs have four clear benefits that gas-powered cars do not:
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What Happens to Gas-Powered Cars?
Conventional cars will probably remain on the road for years,? even decades to come. But their days are numbered.
With an average lifespan of 12 years, the trend lines for gasoline-powered vehicles will be heading down as a result of the increasing market share of EVs.
According to Bloomberg, the shift will reduce demand for oil nearly by 4.7 million barrels a day by 2040 in the U.S. alone. That’s about 26% of U.S. consumption, roughly equivalent to the amount that Germany and Brazil combined consumed daily in 2020.?
“It’s a disruption that people cannot appreciate,” Paul Eichenberg, managing director of Paul Eichenberg Strategic Consulting told Bloomberg. “Truly the engine and transmission becomes the buggy whip of the 21st century. But if you look at the other industries, it will have a huge impact.”
Who knows. We aren't Nostradamus. We like gas-powered cars and the feeling of the wind in our hair as we zoom down the highway. But it's hard to deny that EVs are the future of the automotive industry.
What's Next?
The path for EVs to takeover isn't paved in gold. But it's getting there.
The main barrier to entry for EVs has always cost. It's why it was annoying to hear the Biden administration yammer about beating gas prices by picking up a $40,000 electric SUV.
But the cost is coming down. And it's coming down fast.
Moreover, although companies like Tesla are still facing supply problems such as the recent battery shortage, the market is catching up.
Ford, for instance, is reassuring investors that it has the battery supplies for its ambitious EV goals. So, who knows at the end of the day? Tesla might not even be the big dog in the EV world.
It's still the Wild West out here.
What we do know is that things are moving quickly. So, buy the ticket and take the ride.
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Relationship Manager at Capital One Auto Finance
2 年I for one am a fan of EVs, however have a bit of skepticism that we will see the EV boom so quickly. Are there more EVs on the road now vs pre-pandemic? Absolutely, however not everyone who has owned one have been raving fans. Many of the more recent additions to the EV lineup have seen lackluster battery performance. Once the range becomes consistently over 300 miles with an accelerated charging option more readily available, I would wholeheartedly agree that the gas powered vehicle sales will rapidly decline.