Are electric cars the future?

Different groups have varying opinions concerning the future of electric vehicles. Research, Statistics, and a close analysis of the future might be the best way to predict what will happen. A Bloomberg study recently published forecast that sale of electric cars will hit 41 million by 2040 representing about 35% of new light-duty vehicle sale. The rise will be about 90 times the figure of 2015 where the electric cars are estimated to have recorded 462,000 sales, 60% up from 2014 figure. The Bloomberg report based their study on the high rate at which the cost of lithium-ion batteries is falling. Last year’s price was $350 per kilowatt down by 65% in 2010. The battery cost is expected to drop below $120 per KWH by 2030 and to fall further with new chemistries emerging.

Tougher emission targets are and will be a force behind the expansion of electric cars. Carlos Ghosn, chief executive of the Renault-Nissan Alliance, notes that emissions targets that were agreed at U.N. climate conference in Paris would be a critical driving force. He notes that the only prominent known technology that meets these target is massive electrification and electric cars. Ghosn notes that global governments will significantly increase support for the electric vehicle through consumer incentive and charge infrastructure.

By 2025, California will require 15% of cars being sold to be zero emission vehicles. The plug-in hybrid, battery-electric vehicles, and fuel-cell vehicle running on hydrogen fall in this category. Nine other states representing 25% of the U.S. market have embraced California standards while other are projected to adopt them. Ultimately, automakers will not be in a position of selling cars in those markets if they don’t increase plug-in sales.

Navigant Research, project that in California, where electric vehicles sale are concentrated, the state will witness a rise from about 3% of sales to between 15% and 22% by 2024. That will be about 5% of the total value sale in the U.S.

It has been five years since the first mainstream electric car made its way into the market. The current market is still small with only 115,000 sales in the U.S. during 2015. The early adopters are paving the way for traditional buyers and automakers are lining up aiming to quench their thirst. As of now, there are 12 battery electric vehicle and 14 plug-in hybrids on the market. By the end of 2016, approximately ten more models mostly hybrids will be introduced. They will include models from Chevrolet, BMW, Hyundai, Chrysler, Mitsubishi, Mercedes, and Audi.

Most of today’s EV buyers have a better understanding of the drawbacks and benefits of the technology than average consumers. Most tend to have a higher education level and earn a higher income than mainstream car buyers. They are less sensitive to the ups and downs in gas price and most probably purchase the vehicle with the purpose of combating climate change or for the pleasure of driving a Tesla or a BMW i3.

Tesla is a big believer in the future of electric cars and just recently, they launched Model 3. The EV cost about half of Tesla flagship, the Model S. The new car has a base price of $35,000 but after federal and state subsidies for an electric car, the cost shrinks to under $30,000 or about $220 when leasing the vehicle on a monthly basis. The company hopes to sell 500,000 vehicles in 2020 that is about ten times the number of sales it made in 2015.

The cheap pricing of model 3 and the availability of free charging network might influence people’s purchasing option. There are about 274 Tesla’s free charging stations in North America and 613 globally. At commercial charging stations owners, pay $5 – $10 only for a full recharge. The Model 3 only requires a recharge after 320 KM.

The current cheap gasoline price is one of the factors hindering massive adoption of electric cars. The Organization of Petroleum Exporting Countries (OPEC) projected that EV will not gain a significant market share without a technology breakthrough.

Ultimately, Jeremy Michalek, a professor of engineering and public policy at Carnegie Mellon notes that adoption of electric cars might come down to educating the masses. New EV models and marketing behind them will influence car-purchasing decisions by mainstream consumers who currently have very limited information concerning the vehicles.

Featured image credit:sfgate