We all love a David-and-Goliath story. Elon Musk is a great showman and has played this narrative for all it’s worth in the spectacular rise of his electric car company Tesla. A few weeks ago Tesla launched the Model 3, hyped as the first mass-market full-range all-electric car. But what we really want to know is not whether Tesla will beat Ford and GM and VW, and whose shareholders will make or lose money. It is the answers to two questions:
- Is the electric vehicle revolution is on track to take over from fossil-fuel vehicles in the coming decades?
- If yes, will the revolution happen fast enough to be consistent with the Paris 2 degree C warming cap and net zero emissions not too long after 2050?
Here is a growth chart for global sales of plug-in electric vehicles (EVs).
Another one from me, using IEA data – copied into a spreadsheet here. The growth rate for pure battery cars is higher than for hybrids, a complex transitional technology that is fated to fade out.
The rate bounces around and hasn’t settled down, so it would be hazardous to pick a CAGR as a prediction. You can pick a rate and find an expert who predicts it. A nice chart from BNEF shows the scatter.
BNEF leaves out the outlier, Stanford professor Tony Seba, who predicts EVs will be 100% of new sales by 2030. His growth rate is not particularly high – 33% CAGR by my calculations. He does expect self-driving plus rideshare to slash the size of the market by two-thirds.
I see no reason not to join the party with my own blunderbuss. The growth rate looks to be higher than the 42% that gives a doubling time of 2 years. The global light vehicle market is currently 93.5 million a year, growing at 1.5%. Project the 42% CAGR, and EV sales take all the market in 2031, in line with Seba (my spreadsheet, and footnote). That’s without his rideshare revolution.
In all the professional scenarios, the answer to the first question is yes. Electric cars will take over. So will buses and light commercial vehicles (sooner), and eventually heavy ones.
But the answer to the second question is still very doubtful. The problem is that the stock of ICEVs is huge, over one billion, and they last a long time, about 20 years for cars. Even if no new ICEVs are sold after 2030, emissions from the fleet don’t hit zero until 2050. Rideshare does not affect this problem unless it accelerates scrapping of the legacy stock. Net zero by 2050 requires extremely high growth rates to hold up; follow anybody else’s forecasts than Seba’s and mine, and the deadline is put off. The govrnments of the UK and France have announced ICE cutoffs for cars in 2040: this is not too bad, as cars over 10 years old tend to have low annual mileage. Net zero by 2050 also calls for extension of the technology to trucks. This is all possible, but not at all certain.
It’s easier to argue that this can happen than that it will. I can at least offer you a qualitative list of downside and upside risk factors, over the jump. Continue Reading…