Moving forward with a bigger push towards electric cars is not just a goal that would bring our economy closer to being eco-friendly and help in the fight against climate change, but it’s also a reality many businesses want to be a part of. But the speed of this change — and the role that standard combustion vehicles will play during the transition — is far from clear.
“Electrification, you cannot stop it anymore — it’s coming,” says Elmer Kades, a Managing Director from the consulting firm AlixPartners. “We have fantastic growth rates, between 50 and 60% on a global level.”
Electric vehicles currently make up a small fraction of the auto market, which is still dominated by internal combustion engines. While more electric car models will hit showrooms over the coming years, there are several factors that have analysts convinced this is all part of a big transition in the industry.
Around The World
Government policies — particularly in Europe and China — are supporting electric vehicles, as they are helping not just the disastrous impacts of climate change but are also improving air quality in the cities where they are used.
Auto companies around the globe are preparing for what will be a large financial commitment. Car manufacturers are planning to invest more than $90 billion in the shift to electric vehicles over the next decade or so, according to a Reuters analysis.
Electric motors are simple compared to combustion engines, which makes them easier to maintain and means they should last longer. Keeping them charged is more cost-effective than buying gas, which is an advantage that will become even more important if gas prices rise.
Analysts see the possibility for strong sales of these efficient vehicles to enable smart grid management, but the local impact of electric vehicles has yet to be experienced. Electric vehicles provide a natural use for solar energy, a pathway to push more local solar power onto the grid, and a source of resilience for when the power goes out.
This transformation requires prompt attention to policy and planning. Electric vehicles may have an impact much sooner than the 40-year lifetime of traditional resources, or even the 15-year timeframe of resource planning. The increasing number of electric cars in the U.S can impact utility plans within their current planning timeframes. This means that action needs to happen now for the rollout to be successful.
Increasing Electric Vehicle Sales
Sales for electrical vehicles are increasing and costs to manufacture are decreasing, which is making forecasters believe that electric vehicles will be largely rolled out to the public by 2040. Electric grid managers will also have their work cut out for them — they’ll need to account for the impact of electric transportation and accommodate a large number of vehicle adoption forecasts.
Prospective car buyers will also consider the long-term opportunity, as the total cost of electric vehicle ownership becomes comparable to gas-powered cars. Already, avoided scheduled maintenance and fuel costs are likely to save electric car drivers as much as $10,000 compared with owning a comparable internal combustion vehicle.
Why Buy an Electric Car
Regardless of where you live, electric vehicles are cheaper to fuel than traditional gasoline-powered cars. Electricity providers in the 50 largest U.S cities offer a rate plan that makes filling up on electricity cheaper than gasoline, adding up to a median yearly savings of over $770.
Electric cars can also offer monetary savings on maintenance costs. Battery-run electric cars have no gasoline engine, don’t need oil changes, spark plugs, or timing belts, and unlike gasoline motors, electric motors don’t require routine maintenance.
These reduced maintenance costs can save an electric car owner over $1,500 over the life of the vehicle, compared to a gasoline-powered version of their vehicle.
Even if the electricity used to fuel an EV comes from a dirty coal-dominated grid, EV’s still produce less global warming pollution than their conventional counterparts. The average EV in the U.S produces the emissions equivalent of a gasoline car that gets 73 miles per gallon. And, the emissions performance is set to only improve as wind and solar power replace coal-fired electricity. Many electric vehicle owners are also choosing to pair their EV with rooftop solar panels and home energy storage units. When powered by renewable energy, an EV can operate nearly emissions-free.
What to Expect This Year
Expect the push and momentum of electric vehicles to reach a new level this year. Tesla is expected to have a big year with its Model Y, as deliveries are expected to start and General Motors, Kia, Hyundai, Audi, Porsche, and many more will also be introducing or expanding their fleet of EVs. With an emphasis on clean energy, it’s no surprise to see electric cars expanding so quickly.
These new offerings aren’t quietly slipping into the market either, as we’ve seen previously. Look out for compelling, long-range, affordable vehicles available for customers in the coming year.