Clearly the manufacture of electric cars has been steadily building momentum since Toyota released its first Prius in 2001. However, the last decade and a half has not quite shown the electric car over haul that environmentalists (and electric car manufacturers) would have liked to see. Now that gas prices are diving deeper and deeper into early 2000’s rates, the incentive to get an electric car seems to be lessened that much more. So when can we expect electric cars to hit their stride and take over the market, if ever?
According to research firm Bloomberg New Energy Finance, we can expect the electric car boom to take place in 2022. The firm says that in just six years, the largest obstacle to seeing electric vehicles (the price tag) will be solved and electric vehicles will cost less than their gas-driven alternatives.
“By 2022, the unsubsidized total cost of ownership of BEVs [battery electric vehicles] will fall below that of an internal combustion engine vehicle,” claims the report. From there, a steadily increasing rate of adoption can be expected around the globe; electric cars are projected to take up 25% of the total market share by 2040.
Considering the legislation forcing carbon emissions to be cut substantially by 2025, we can expect even the gas-gobblers to run a little cleaner than they do today.
Back to the matter at hand: EVs currently make up less than 1% of new car sales in the United States, and those sales are bolstered by government subsidies and mandates. The only car model that’s all electric and financially accessible to the general public is the Chevy Bolt, which travels 200 miles on a charge and costs only $30,000. Tesla also has a $30,000 EV in the works, though it’s not set to release until 2017.
“We project that the cost of manufacturing electric vehicles will fall dramatically, and faster than most people realize,” wrote Salim Morsy, the author of the study. Morsy backs up his claim by citing that the battery pack that powers the car accounts for around a third of the cost of the entire vehicle. Considering that the average cost per kilowatt hour dropped from $1000 to $350 between 2010 and 2015 and is continuing to drop, it’s likely that this expensive battery issue will soon become resolved. This looks even more likely when one considers that battery prices drop not necessarily due to tech breakthroughs but through moderate improvements in production processes and battery chemistry, economies of scale, and aggressive pricing.
“We believe that between now and 2020, cost will continue to drop significantly,” claims Morsy. HE claims that the Bolt’s affordability is “material testament to the fact that we’re rapidly approaching cost parity.”
That said, the auto industry is slowly moving toward a world in which people don’t even want to own cars. Millennials are leading the way in bolstering the car-sharing economy. That means people might not buy any kind of cars, much less electric ones.
These projections also imply that people have access to the plug in their garages and the continuation of government subsidies. It also implies that gas will head north again soon, and not linger around $32 a barrel.