It’s becoming an almost everyday event for a car maker to launch a new electric car, such as Audi’s e-tron SUV last month.
Forecasters believe that this is the very early days of an exponential growth cycle as the world shifts to electric-powered vehicles (EVs) from petrol and diesel engines.
Projections from investment bank Morgan Stanley show that EV sales are expected to surpass those of traditional vehicles by 2038, and the global fleet of EVs is expected to blast through the one billion mark by 2047.
Driver objections, such as range anxiety (the fear of running out of juice on the road with no means of topping up), limited recharging networks and high purchase cost, are still works-in-progress, but the invisible hand of the market is likely to address all of these concerns in time.
Supporting the transition from internal combustion engine (ICE) vehicles to EVs are diminishing returns for carmakers. Morgan Stanley’s analysis sees the average profitability of ICE models falling through the early 2020s, eventually turning to a loss per unit by 2028.
EVs currently account for no more than 1% or 2% of new vehicle purchases, with 40% coming in China.
Source: Morgan Stanley, Visual Capitalist
Data shows 1.23m EVs were sold in China in 2017, versus approximately 3.1m worldwide sales. That compares to roughly 1.2bn ICE vehicle sales, according to Morgan Stanley’s research.
By 2050, analyst predict that four in five new car purchases will be EVs.
BATTERIES ON WHEELS
This shift is also sparking a surge in demand for batteries to keep cars on the move, not to mention battery technology development to improve range, power output and the economics in future.
In 2016 EV batteries represented an already sizeable industry, worth about $15bn annually, says BIS research and Statista. Next year (2019) that market is forecast to jump to just shy of $38.8bn, and to be worth more than $90bn by 2026.
Readers keen to find out how to invest in this exciting EV space can click through to our in-depth feature, ‘How to invest in the electric vehicle revolution,’ from October 2017. We flagged several engineers, chemical firms and miners plugged into this fast growing industry.
We also took a deep dive into changing vehicle technology in March 2016, which may also be worth a read. That piece took a hard look at how ballooning electronics and connectivity kit is transforming cars, and how we use them.
