- 13 countries & 31 cities have plans to phase out ICEVs and introduce EV-related incentives
- Battery costs have fallen 89% over the past 10 years
- Pure-play EV companies have a strong head start with software and data advantages
- Charging infrastructure providers are the pick-and-shovel play
A brave new world – transformational shift to electrification. It has been 118 years since Henry Ford introduced the Model A in 1903. Until now, never has the global automobile industry witnessed such transformational change lurking at its doorstep. With advancements in technology and a changing regulatory landscape, Electric Vehicles (EV) are poised to overtake Internal Combustion Engine Vehicles (ICEV) as the automobile of choice in the next century.
There is, however, a sense of déjà vu in this EV vs ICEV rivalry as the very same comparison actually took place more than 100 years ago, long before the days of Elon Musk and Tesla Inc. Back in 1912, American inventor Thomas Edison built three prototype electric cars. Unfortunately, with a price tag double that of normal gasoline-powered vehicles, the first electric cars failed to take off. Sounds familiar?
However, the narrative has changed since. Today, technological advancement and rising affordability are paving the way for widespread adoption of EVs. There is also an overarching environmental angle to this argument. Automobiles are the largest contributors to greenhouse gases by far and the transition to EVs would dramatically reduce greenhouse emissions that contribute to climate change.
Catalysts spurring mass adoption of EVs
According to the Environmental Protection Agency (EPA), the Transportation space accounts for the largest share of greenhouse emissions at 29%, followed by Electricity at 25%. As carbon footprint reduction becomes a top global priority, ICEV usage is expected to undergo substantial decline.
Instead, electrification is slated to be the main driver of vehicle sales in coming years and the outlook is electrifying. According to BloombergNEF, EVs are expected to account for 58% of new car sales by 2040.
It is hard to start a conversation on EVs without first talking about price. From a consumer perspective, affordability is everything. If the total cost of maintaining an EV is lower than an ICEV in the long run, the shift in the consumption trend will come. Recent developments suggest that the days of affordable EVs are near and the underpinning drivers are: (1) Falling production cost and (2) Progressive government regulations and incentives.
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