The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrified vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrical cars will remain a niche product for many years, plagued by high sticker prices and powerfully dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much quicker than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrical vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax violates. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrified vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models embarking in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrified cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrified cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater multiplicity of models and lower costs, electrical cars will reach a point where they can stand on their own.
Still, this outcome is hardly assured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrical cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrified vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrical cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even tho’ researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrified vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are commencing to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrified vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much tighter for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrified vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to serve with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrical vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrical models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrical vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where strenuous taxes on petroleum-powered vehicles and generous subsidies for electrical vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrical cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrified vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrified cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon electro-stimulation rather than coal. The International Energy Agency has estimated that electrical vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrical vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.
When Will Electrified Cars Go Mainstream? It May Be Sooner Than You Think
The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrical vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrical cars will remain a niche product for many years, plagued by high sticker prices and strongly dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much swifter than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrified vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax violates. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrified vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models embarking in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrical cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrified cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater diversity of models and lower costs, electrified cars will reach a point where they can stand on their own.
Still, this outcome is hardly ensured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrical cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrified vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrified cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even however researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrified vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are embarking to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrical vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much tighter for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrical vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to conform with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrified vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrified models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrified vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where intense taxes on petroleum-powered vehicles and generous subsidies for electrical vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrical cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrified vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrified cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon electrical play rather than coal. The International Energy Agency has estimated that electrical vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrified vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.
When Will Electrical Cars Go Mainstream? It May Be Sooner Than You Think
The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrical vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrified cars will remain a niche product for many years, plagued by high sticker prices and strongly dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much quicker than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrified vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax violates. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrified vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models commencing in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrical cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrified cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater multitude of models and lower costs, electrical cars will reach a point where they can stand on their own.
Still, this outcome is hardly ensured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrified cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrical vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrical cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even however researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrical vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are commencing to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrified vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much stiffer for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrified vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to obey with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrified vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrified models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrified vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where intense taxes on petroleum-powered vehicles and generous subsidies for electrical vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrified cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrified vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrical cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon tens unit rather than coal. The International Energy Agency has estimated that electrified vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrical vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.
When Will Electrified Cars Go Mainstream? It May Be Sooner Than You Think
The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrical vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrified cars will remain a niche product for many years, plagued by high sticker prices and strongly dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much quicker than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrical vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax violates. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrical vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models kicking off in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrical cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrified cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater diversity of models and lower costs, electrical cars will reach a point where they can stand on their own.
Still, this outcome is hardly ensured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrified cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrified vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrified cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even tho’ researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrical vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are beginning to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrical vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much firmer for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrified vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to obey with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrical vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrical models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrified vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where powerful taxes on petroleum-powered vehicles and generous subsidies for electrical vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrical cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrified vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrical cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon electrical play rather than coal. The International Energy Agency has estimated that electrical vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrified vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.
When Will Electrical Cars Go Mainstream? It May Be Sooner Than You Think
The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrified vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrical cars will remain a niche product for many years, plagued by high sticker prices and powerfully dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much swifter than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrified vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax cracks. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrical vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models embarking in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrical cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrical cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater diversity of models and lower costs, electrical cars will reach a point where they can stand on their own.
Still, this outcome is hardly ensured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrical cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrical vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrical cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even tho’ researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrified vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are kicking off to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrified vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much firmer for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrical vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to obey with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrified vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrical models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrified vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where mighty taxes on petroleum-powered vehicles and generous subsidies for electrified vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrified cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrified vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrical cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon electro-stimulation rather than coal. The International Energy Agency has estimated that electrified vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrical vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.
When Will Electrified Cars Go Mainstream? It May Be Sooner Than You Think
The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrified vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrified cars will remain a niche product for many years, plagued by high sticker prices and strongly dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much swifter than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrical vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax cracks. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrical vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models kicking off in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrical cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrical cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater multitude of models and lower costs, electrical cars will reach a point where they can stand on their own.
Still, this outcome is hardly ensured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrical cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrical vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrified cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even tho’ researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrical vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are beginning to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrified vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much stiffer for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrified vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to conform with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrified vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrified models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrical vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where intense taxes on petroleum-powered vehicles and generous subsidies for electrified vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrified cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrical vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrical cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon violet wand rather than coal. The International Energy Agency has estimated that electrified vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrical vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.
When Will Electrical Cars Go Mainstream? It May Be Sooner Than You Think
The Fresh York Times
July 8, 2017
As the world’s automakers place larger bets on electrified vehicle technology, many industry analysts are debating a key question: How quickly can plug-in cars become mainstream?
The conventional view holds that electrified cars will remain a niche product for many years, plagued by high sticker prices and intensely dependent on government subsidies.
But a growing number of analysts now argue that this pessimism is becoming outdated. A fresh report from Bloomberg Fresh Energy Finance, a research group, suggests that the price of plug-in cars is falling much swifter than expected, spurred by cheaper batteries and aggressive policies promoting zero-emission vehicles in China and Europe.
Inbetween two thousand twenty five and 2030, the group predicts, plug-in vehicles will become cost competitive with traditional petroleum-powered cars, even without subsidies and even before taking fuel savings into account. Once that happens, mass adoption should quickly go after.
“Our forecast doesn’t hinge on countries adopting stringent fresh fuel standards or climate policies,” said Colin McKerracher, the head of advanced transport analysis at Bloomberg Fresh Energy Finance. “It’s an economic analysis, looking at what happens when the upfront cost of electrical vehicles reaches parity. That’s when the real shift occurs.”
If that prediction pans out, it will have enormous consequences for the auto industry, oil markets and the world’s efforts to slow global heating.
A Boost From Batteries
Last year, plug-in vehicles made up less than one percent of fresh passenger vehicle sales worldwide, held back by high upfront costs. The Chevrolet Bolt, produced by General Motors, sells for about $37,500 before federal tax violates. With gasoline prices hovering around $Two per gallon, relatively few consumers seem interested.
But there are signs of a shift. Tesla and Volkswagen each have plans to produce more than a million electrified vehicles per year by 2025. On Wednesday, Volvo announced that it would phase out the traditional combustion engine and that all of its fresh models beginning in two thousand nineteen would be either hybrids or entirely battery-powered.
Skeptics argue that these moves are mostly marginal. Exxon Mobil, which is studying the threat that electrical cars could pose to its business model, still expects that plug-in vehicle sales will grow leisurely, to just ten percent of fresh sales in the United States by 2040, with little influence on global oil use. The federal Energy Information Administration projects a similarly sluggish uptick.
The Bloomberg forecast is far more aggressive, projecting that plug-in hybrids and all-electric vehicles will make up fifty four percent of fresh light-duty sales globally by 2040, outselling their combustion engine counterparts.
The reason? Batteries. Since 2010, the average cost of lithium-ion battery packs has plunged by two-thirds, to around $300 per kilowatt-hour. The Bloomberg report sees that falling to $73 by 2030, without any significant technological breakthroughs, as companies like Tesla increase battery production in massive factories, optimize the design of battery packs and improve chemistries.
For the next decade, the report notes, electrified cars will remain reliant on government incentives and sales mandates in places like Europe, China and California. But as automakers introduce a greater diversity of models and lower costs, electrical cars will reach a point where they can stand on their own.
Still, this outcome is hardly assured. Governments could scale back their incentives before plug-in vehicles become fully competitive — many states are already beginning to tax electrified cars. Battery manufacturers could face material shortages or production problems that hinder their capability to slash costs. And an unforeseen technology failure, such as widespread battery fires, could halt progress.
“But we attempted to be fairly conservative in our estimate of where battery prices are going,” Mr. McKerracher said, “and we don’t see barriers to electrical vehicles’ becoming cost competitive very soon.”
Interactive Feature | Interested in Climate Switch? Sign up to receive our in-depth journalism about climate switch around the world.
Potential Setbacks
Other experts caution that falling battery costs are not the only factor in determining whether electrified cars become widespread. Sam Ori, the executive director of the Energy Policy Institute at the University of Chicago, noted, “People don’t buy cars based solely on the price tag.”
Consumers may remain wary of vehicles with limited range that can take hours to charge. Even tho’ researchers have shown that battery-electric vehicles have sufficient range for many people’s daily commuting habits, consumer psychology is still difficult to predict. The report does not, for example, expect electrified vehicles to catch on widely in the pickup-truck market.
Charging infrastructure is another potential barrier. Albeit cities are kicking off to build thousands of public charging stations — and Tesla is working on reducing the time it takes to power a depleted battery — it still takes longer to charge an electrified vehicle than it does to refuel a conventional car at the pump.
Many owners charge their cars overnight in their garages, but that is much stiffer for people living in cities who park their cars on the street.
As a result, the Bloomberg report warns that plug-in vehicles may have a difficult time making inroads in dense urban areas and that infrastructure bottlenecks may slow the growth of electrified vehicles after 2040.
Another potential hurdle may be the automakers themselves. While most manufacturers are introducing plug-in models in the United States to serve with stricter fuel-economy standards, they do not always market them aggressively, said Chelsea Sexton, an auto industry consultant who worked on General Motors’ electrical vehicle program in the 1990s.
Car dealerships also remain reluctant to display and sell electrified models, which often require less maintenance and are less profitable for their service departments. Surveys have found that salespeople are often unprepared to pitch the cars.
“We’ve seen a lot of announcements about electrified vehicles, but that doesn’t matter much if automakers are just building these cars for compliance and are unenthusiastic about actually marketing them,” Ms. Sexton said.
Raw economics may help overcome such barriers, Mr. McKerracher said. He pointed to Norway, where strenuous taxes on petroleum-powered vehicles and generous subsidies for electrical vehicles have created price parity inbetween the two. As a result, plug-in hybrids and fully electrical cars in Norway now make up thirty seven percent of all fresh sales, up from six percent in 2013.
Fighting Climate Switch
If Bloomberg’s forecast proves correct, it could have sweeping implications for oil markets. The report projects that a acute rise in electrical vehicles would displace eight million barrels of transportation fuel each day. (The world presently consumes around ninety eight million barrels per day.)
A number of oil companies are now grappling with the prospect of an eventual peak in global request, with billions of dollars in investments at stake in getting the timing right.
Mass adoption of electrical cars could also prove a key strategy in fighting climate switch — provided the vehicles are increasingly powered by low-carbon electro-therapy rather than coal. The International Energy Agency has estimated that electrified vehicles would have to account for at least forty percent of passenger vehicle sales by two thousand forty for the world to have a chance of meeting the climate goals outlined in the Paris agreement, keeping total global heating below two degrees Celsius.
Yet the Bloomberg report also shows how much further countries would need to go to cut transportation emissions.
Even with a acute rise in electrified vehicles, the world would still have more traditional petroleum-powered passenger vehicles on the road in two thousand forty than it does today, and it will take many years to retire existing fleets. And other modes of transportation, like heavy-duty trucking and aviation, will remain stubbornly difficult to electrify without drastic advances in battery technology.
Which means it is still too soon to write an obituary for the internal combustion engine.