As you drove your car today, you probably saw approximately 99 gasoline and diesel-powered cars for every one electric car. In fact, September 2016, was the first month ever that new electric car sales in the United States were more than 1 percent of new car sales, and they still account for less than 1 percent of overall auto sales, the automotive website Edmunds.com reports.
When you drive your car tomorrow, think about this — many auto industry experts believe that the highways of the future will not look anything like the highways you are currently driving on. Some experts even believe that every car on the road will be purely electric-powered in the not-too-distant future.
Endorsing this idea is none other than General Motors.
“General Motors believes the future is all-electric,” GM executive Mark Reuss told the press at a media event. “We are far along in our plan to lead the way to that future world.”
On Oct. 2, General Motors announced it will sell two new electric car models in 2018, and will sell at least another 18 models by 2023. On the same day, Ford created “Team Edison” to “accelerate” its effort to produce electric cars, reported Forbes magazine. The company plans on selling 13 new electric car models by 2022.
The Electric Bandwagon
Aston Martin, Audi, BMW, Jaguar Land Rover, Mercedes, Nissan, Tesla, Volvo, and Volkswagen are also focusing on the electric car market, reported The Washington Post, which said that six of these nine companies have announced plans for new electric cars this year.
The large number of electric car ventures launched this year isn’t a coincidence. Electric cars have existed since the 1880s, but gasoline cars have proved more practical and cost-effective since the early 20th century, particularly after manufacturers began using a new starter motor in 1912. In recent years, though, that practicality edge has narrowed as the cost of batteries for electric cars declined. In 2016, they cost less than half as much as they did in 2012 the U.S. Department of Energy reported, according to The New York Times article “A Brighter Future for Electric Cars and the Planet.”
Tesla reported that it can produce batteries for about $125 per kilowatt-hour.
“Researchers say the cost of electric cars will be at parity with conventional vehicles when battery prices reach $100 per kilowatt-hour, which experts say is just a few years away,” reports The New York Times article.
Gas Car Bans Planned
Electric car sales have soared as battery costs have declined.
From 2012 to 2016, electric car sales in the U.S. increased 32 percent annually, and sales rose 45 percent from the one-year period ending in June, 2016, to the one-year period ending in June, 2017, according to Forbes. Nearly 160,000 electric cars were sold in the U.S. in 2016.
If you’re an investor, you might want to know details about the industry’s present and future. The report “Electric Vehicle Sales in the United States: 2016 Final Update” shows that the top selling models of 2016 were Tesla Model 5, Chevrolet Volt, Tesla Model X, Ford Fusion Energi, and Nissan Leaf. The future for electric car models might be much brighter because the percentage of electric cars on American roads will increase from about 1 percent to more than 50 percent in 2038, reports the Bloomberg Businessweek article “The Electric Car Revolution Is Accelerating.”
A chart in the Bloomberg article shows that the cost of a battery will cross below the key $100 per kilowatt-hour threshold in 2025 or 2026. In addition, battery manufacturing capacity will triple by 2021.
Although battery cost and manufacturing capacity improvements are crucial to the future of the electric car industry, they are not the only factors that will help the industry. Other factors include:
* Governmental Commitments:
Many nations plan on banning the sale of gas cars, including the world’s two most populated nations — China and India– as well as France, Great Britain, the Netherlands, and Norway. These commitments are being made because gas cars negatively impact the environment. Most of the nations don’t have a timeline on their planned bans, but China wants to act by 2030 and it also has set “aggressive production quotas” for electric cars, reports The Washington Post article “Why 2017 will go down as the beginning of the end of the internal combustion engine.”
* Citizens’ Commitments:
While there have always been people excited by the prospect of driving cars that don’t pollute the air, that excitement has been tempered by the price of electric cars. The introduction of Tesla’s Model 3 could spur a dramatic increase in electric car sales because its starting price of about $35,000 will make it competitive on the market. Tesla began manufacturing this model in July.
* Technological Improvements:
Electric cars are now three times as efficient as gas cars. This means that they can travel 43 miles on $1 of electricity, or about 25 percent of how much gas it costs to travel 43 miles, reports Forbes. Electric cars also accelerate faster, are more reliable, and cost less to repair because they have far fewer moving parts.
Auto industry analysts are far more confident about the future of electric cars because of all of the industry’s recent developments.
Regards,
Ethan Warrick
Editor
Wealth Authority