When Will Electric Cars Outsell Gas Cars?

When Will Electric Cars Outsell Gas Cars?

05/22/2021

Of course, projections are all over the map.

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Posted on EVANNEX on May 22, 2021 by Charles Morris

In this day and age, just about everyone who’s paying attention—even stalwarts of the auto and oil industries—acknowledges that vehicle electrification is the future. But how far into the future are we talking about? Forecasts are all over the map. Automakers and governments have begun setting target dates (or, more often, “aspirational goals”) for the end of the Oil Age. Fossil fuel fans tend to disparage these as unrealistic, and environmental advocates ridicule them as hopelessly timid. 

One or more of the EV startups could become players, which would be a welcome development—Tesla can’t get the job done alone—but they face a long, rough road, and not all will make it to the end. Progress on the vehicle autonomy front would give a huge boost to EV demand. Once self-driving robotaxis become a reality, owning a gas car will quickly become like owning a horse, as Elon Musk has quipped—but he can’t predict when that’s going to happen. Government policies and the development of charging infrastructure are just a couple of the other x factors that make precise predictions impossible.

There are a couple of things that all the analysts cited here agree on. One is that Europe is currently leading the electrification race, outpacing China, and that the US is lagging far behind. McKinsey’s 2020 Electric Vehicle Index reported that, in the first quarter of 2020, EV sales declined by 33 percent in the US, while they increased by 25 percent in Europe.

The report looked at EV penetration rates in 16 countries—nine of the top ten were in Europe, and the US ranked dead last. EV sales have grown significantly over the past year, but the US is still not catching up to its global competitors. IHS Markit predicts that, in 2021, China will account for 44% of the EV market, Europe about 28%, and North America a paltry 16%.

Another common thread among the various reports is that, so far, Tesla has been the world’s undisputed EV leader. McKinsey reported that the California carmaker increased its share of the global EV market from 12% in 2018 to 16% in 2019, mostly thanks to the global launch of Model 3.

This may not last, however. In Europe, local rivals have already knocked Tesla out of the top spot—IHS Markit tells us that in 2020, the Volkswagen Group led the European EV market with a 24% market share, followed by Renault (16%), and Tesla in third place (8.6%). And a lot more competition is on the way—BNEF predicts that by 2022, there will be over 500 different electrified models available globally.

There’s another finding that most analysts agree on, and it isn’t good news: the current pace of electrification is much too slow to stave off catastrophic climate change. A new report from the International Energy Agency finds that “climate pledges by governments to date—even if fully achieved—would fall well short of what is required to bring global energy-related carbon dioxide emissions to net zero by 2050 and give the world an even chance of limiting the global temperature rise to 1.5° C.”

According to the IEA report, if we don’t want to end up underwater, sales of new fossil fuel-burning passenger cars must end, to be replaced by EVs powered by renewable energy, by 2035.

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Written by: Charles Morris

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