Electric Vehicles Are Picking Up Speed

Last month saw U.S. Electric Vehicle (EV) sales up 40% year-over-year. Every Tesla (TSLA) owner I know loves their car – although the February jump was helped by the launch of Ford’s (F) Mustang Mach-E. EV market share (which includes hybrids as well as all-electric vehicles) rose from 1.8% to 2.6% in February. Nonetheless, EV sales fell last year due to Covid, from 331K to 296K.

Forecasts of booming EV sales are so common as to scarcely be news anymore. It’s possible to go back and find old forecasts that were way off. This one from 2011 looking ahead to 2020 includes a few the authors would like us to forget. Deutsche Bank’s forecast of U.S. sales was off by 2X. However, McKinsey’s global estimate was only slightly high.

David Victor recently published Energy Transformations in association with Engine No. 1, the activist investor pushing for Exxon Mobil to respond more quickly to the energy transition. The chart below is from his report – the small chart in the inset is a 1992 forecast from Shell on EV sales which has turned out to be wildly inaccurate. But the point of the main chart is that sales really are going to take off over the next decade.

It’s possible to find other old forecasts that were wildly inaccurate. Futurist Tony Seba predicted in 2017 that by 2030 100% of auto sales would be autonomous (self-driving) EVs (see A Futurist’s Vision of Energy). It’s still nine years away, but for autonomous EVs in the U.S. to reach that level would require their market share to double approximately every 20 months.

Growth in renewables and EVs have been about to break out for years. The world will need more energy – the U.S. Energy Information Administration (EIA) expects global energy consumption to increase by 50% over the next three decades. They expect every source to increase, including coal.

High among Elon Musk’s many talents is marketing, because he’s successfully linked EVs with clean energy in the minds of consumers. America generates around 60% of its power from coal and natural gas, with renewables (including hydro) and nuclear each providing around a fifth.

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Disclosure: We are invested in all the components of the American Energy Independence Index via the ETF that ...

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Brad Bartilson 1 month ago Member's comment

All getting played...Physics 101:adding 1200lbs to a vehicle consumes more energy. Notice Musk never discusses energy consumption, simply range, improving lethargic charging times, and the useless "wall to wheels" efficiency, meant to mask the truth. In true comparison, the system boundary for analysis includes combustion for both ICE and battery electric. Once you include the increased energy demand of overweight battery-electric vehicles (50 times less energy dense than gasoline), the inefficiency of charging through the high internal resistance of batteries you end up with no gain. Notice your chart shows energy consumption greatly increasing with electric vehicle expansion. The DOEs response to my challenge on this, and request for a technoeconomic justification is simply that they 'hope that someday this will make sense'. We'll end up with high-priced electricity, no way to choose where we buy it, increased road wear, and more power plants (big $$$) the most of which will be fossil fuel powered, meaning we only succeeded in putting the pollution in someone else's back yard. Good practice for technology transition is the stage gate process used in industry. Guess the government thinks they know better by pushing this agenda. They need a lesson in physics, and technology management.

Ayelet Wolf 1 month ago Member's comment

Good point.