Jump to content
The World News Media

Automakers come to accept that the EV revolution has begun


Guest

Recommended Posts

  • Guest

The last several months have been busy in the electric vehicle revolution. Governments have been announcing their phase out plans for petrol vehicles and automakers have committed billions of dollars to electrification programs. At this point automakers are practically falling over each other racing to get out their announcements. How many electric vehicles they’re developing, how much they’re investing, are they going fully electrified, and when.  Suddenly no one wants to be perceived as falling behind in this revolution. And why should they? Nokia and Blackberry can attest to what happens if you do.

In the past, established automakers have been very cautious with electrification, with many simply watching to see how the situation developed. Generally, their investments could be best described as vague or immaterial to their core business of making cars. That’s clearly changed – take a look at the timeline of announcements below.

Announcements.png

Taken as a whole these announcements are really quite striking. Most recently it was GM and Ford that released their competing declarations of electrification. GM with twenty new fully electric vehicles by 2023 and Ford quickly following up to say they had a new dedicated team for fully electric vehicles, while reiterating their previously committed $4.5 billion in investments for 13 new electrified vehicle options. Ford followed up the next day to say they were also diverting one third of their investments from combustion vehicle development.

The month prior was filled with even more announcements, including tweets between Elon Musk and Mercedes about the size of the latter’s investments. Volkswagen, BMW, Mercedes, Jaguar, Honda, BYD, and Dyson all made significant announcements about their EV programs that month, but it was Volvo’s “fully electrified” announcement that first caught the media’s attention back in July. It was a clever, if somewhat misleading PR move, but it did set important targets for their company and the competition. The fact that Tesla started producing their mass market Model 3 was almost lost amongst all this news. That’s an exaggeration of course, but only a year ago many believed their plans were impossible.

Government announcements have been another important part of the narrative, with targets that provide direction and impetus to the industry. Based on some of the lobbying it hasn’t been entirely welcome, but that’s to be expected. Anytime an entire country is talking about completely phasing out your current business model, it’s going give an industry pause. In this case there were multiple, with China, the UK, France, India, and several others weighing in with their plans to phase out combustion vehicles.

shanghai-china-tesla-model-x-1024x509.jp

Looking at these announcements together suggests that a new phase in the electric vehicle revolution has begun. The fundamentals behind this shift are what I will argue here. My proposition is that the combined macro-economic drivers of regulation, competition, and market growth are pushing EVs to the mainstream. Be forewarned, it’s a long post, but analyzing any of these factors in isolation loses the bigger picture. Electric vehicles are coming, of that there can be no doubt.

Regulation, competition, and market growth.

You’ll notice the analysis below centers around plug-in electric vehicles (PEVs). Today a little more than 60% of new EV sales are pure battery electric vehicles (BEVs) and the rest are plug-in hybrid electric vehicles (PHEVs). PHEV’s are a transitionary technology, which currently offer some benefits that will disappear as battery costs continue to fall and range continues to increase. Note that the analysis doesn’t include hybrids without plugs, they’re old news. Also note that in talking about vehicles and vehicle sales, these are always in reference to passenger vehicles (i.e. no freight trucks). Annual passenger vehicles sales data was taken from the International Organization of Motor Vehicle Manufacturers and electric sales information is from the International Energy Agency.

Regulation:

The 2015 Paris climate agreement requires country specific greenhouse gas reductions by 2030 or sooner. As part of the agreement countries must also submit annual reports on their progress. Transport is a key part of each country’s emissions and it’s one that has a solution at hand, hence the plans to phase out combustion vehicles. France and UK announced for bans by 2040, Scotland by 2032, Netherlands 2025, Norway 2025, and India and China in development. There’s some subtlety to each. Norway for example is leaning towards economic levers to achieve their goals in lieu of outright restrictions, while India has said they expect all vehicles to be electric by 2030 without regulation being necessary, though their official policy is expected later this year.

Personally I tend to agree. I expect we will all be buying electric vehicles long before 2040 largely due to economics, especially with carbon pricing. That said, all of the government announcements are important. They provide both the public and automakers a framework in which to operate, while the more aggressive targets are actually moving the industry forward.

California and nine east coast states have long mandated a portion of sales be zero emission vehicles (ZEVs), administered through a credit system. The system gives partial credit to plug-in electric vehicles (PEVs) and more credits to long range zero emission vehicles (ZEVs).  It’s basically the reason automakers have produced ZEVs in the USA. In quite possibly the biggest announcement of the year China is now doing something similar. They’ve mandated a ‘new energy vehicle’ credit requirement of 10% of sales in 2019 and 12% in 2020.  Since one EV can be responsible for multiple credits it means that less than 12% of all vehicles sold will be required to be zero emission vehicles. For example, if the requirement was met with vehicles like the BMW i3, it would mean 4.6% of all vehicle sales in China would be ZEV in 2020, about 1.4 million that year. For reference there are about 2.5 million PEVs on the planet right now.

China is also looking at establishing a date for complete phase out of petrol vehicles, which has caught California’s attention. California is not eager to lose their leadership position in electric vehicles and is now looking to increase their own targets and establish their own timeline for complete phase out. I believe the quote from their governor was “Why haven’t we done something already?”. It seems that an EV target race has begun and that means mandated growth for the EV market.

BMW-i3-2018.jpg

source: BMW

Market Growth:

This one has always been a bit of ‘chicken or the egg’ scenario.   Historically demand for electric vehicles was low, which automakers referenced as the reason for their limited offerings. Others argued that there could be no demand when so few options were available, especially when those that did exist had such weird aesthetics (which was an effective way to prevent scavenging from more profitable combustion sales). Tesla flipped this around with their preorders of the Model 3 and showed everyone the latent demand to the tune of nearly 400,000 preorders. Other automakers took notice. BMW even started having widespread video presentations depicting the threat of Tesla to motivate their employees.

If you’ve only heard the rhetoric of how electric vehicles constitute a small fraction of the world’s annual sales, you might have missed something important. Exponential growth. Since 2012 growth of plug-in electric vehicles has been over 40% every year. Cumulatively that means 10x more PEVs will be sold in 2017 than 2012, as shown in the graph below.

Annual-PEV-Sales.jpg

Historical data from the IEA, 2017 estimate from EVvolumes.com

Don’t get me wrong, the existing market share is almost laughably low at 1.1% worldwide (2016 data from the IEA), but over the last three years sales have grown at an average 54.6% compound annual growth rate (CAGR).

To illustrate the effect of exponential growth consider the following example about bacteria in a jar. If the number of bacteria doubles every minute and after 1 hour the jar is full of bacteria, that means at 59 minutes the jar is half-full, at 58 minutes ¼ full, at 57 minutes 1/8 full, etc. At 54 minutes that jar is only 1.6% full and everyone is thinking that bacterial will never fill the jar. It’s simplistic and exaggerated but that’s where we are today, at 54 minutes.

The example shows the power of exponential growth but also the challenge in forecasting it. Over the long term, small changes in annual growth rates can have big impacts. Solar power projections were notoriously underestimated and each year forecasts had to be revised upwards. That’s not to disparage the forecasters, it’s incredibly difficult to do what they do and certainly some caution in forecasting is warranted. But it is worth considering that electric vehicles may be in a similar situation. For example, Bloomberg New Energy Finance (BNEF) posted an EV outlook report in 2016, estimating that annual sales in 2040 would be 35% of all vehicles sold and the total PEV fleet would be 410 million. This year they revised those projections up, to 54% and 600 million. That’s 200 million more EVs, on a starting estimate of 410 million, after one year of new data. Will the next years’ forecasts also be revised upwards?

Shorter timeframes are usually more accurate, BNEF’s numbers indicate they expect approximately 2.5 million PEVs to be sold in 2020.  That seems reasonable, but it would mean that PEV sales growth slows to 35% annually for the next few years. With more models coming that have better features and lower costs, and with governments now pushing the market with more aggressive targets, it seems unlikely growth will slow.  So as an experiment what happens if the 54.6% growth rate over the last three years continues, to 2020 and 2025?

PEV-Annual-Growth-@-54.6-CAGR.jpgThe impact would be impressive. The graph indicates that over 4 million PEVs would be sold in 2020, for 5% of total vehicle sales. That jumps to 37 million PEVs sold in 2025, nearly 40% of the total vehicle sales predicted. Contrast that with BNEF numbers, of 3% of sales in 2020 and 8% in 2025. Personally I think 8% is a low estimate for 2025, it works out to a compound annual growth rate of approximately 25%. Interestingly UBS  increased their 2025 PEV estimate upwards by 50% this year (from 2016) to 14% of total sales – showing that short-term projections can be just as uncertain.

Perhaps 54.6% isn’t feasible, although Tesla has nearly managed it with a 47% growth rate since 2013. They did this while building up their staff, infrastructure, technology, and procedures virtually from scratch all at the same time. It’s also worth considering the history of smartphones. Globally smartphone sales grew at a rate of 46.4% year over year for ten years from 2004 to 2014, growing from sales of 27 million a year to over a billion.  It was even more dramatic in China, where smartphone users accounted for about 5% of mobile subscribers in 2010 but were 70% by 2015 (Statista). That’s in just 5 years.

Annual-Smartphone-Sales-1.jpg

Data from www.gartner.com

Granted smartphones are not cars. The average smartphone costs orders or magnitude less and is traded in every two years, while the average car is traded in every 6.5 years (in the USA). A smartphone apparently has an average total lifespan of 4.7 years and a car can last to ~200,000 miles, approximately 15 years of average driving.

But electric cars do offer something cell phones never have. A lower cost. Cell phones provide a wealth of new functionality in our lives, but generally at a premium. Today, electric cars already cost less to operate than combustion vehicles, by 2018 they are expected to reach cost parity on total cost of ownership (UBS report), and by 2025 Bloomberg expects them to cost less upfront than combustion vehicles. That’s battery only electric vehicles (BEVs). Perhaps the changeover is longer than it was for cellphones, but once BEVs have an upfront cost less than petrol, why would anyone buy anything else?

Competition:

More and more manufacturers are entering the electric vehicle field with legitimate programs and their EVs are getting excellent reviews. At the end of 2016 the Chevy Bolt came out and won the North American and Motor Trend car of the year awards. Be prepared to see future EVs dominate the awards. VW already has a new e-Golf, Nissan a new Leaf, BMW an updated i3, Hyundai released their Ionic, and Audi, Porsche, and Jaguar are all coming out with pure EV models in 2018. Then there are the massive “electrification” shifts from the likes of Mercedes, BWM, Volvo, Austin Martin, VW, Ford, GM, and others. All now committing to reshaping their companies and the industry by moving to electric vehicles. There’s also that company Tesla which started making their game changing Model 3. Suddenly there’s a lot of competition and if your company isn’t one of those competing…. what are you doing? Those automakers on the sidelines are starting to look obsolete and it’s a short road from obsolete to ‘out of business’. IMG_9497.jpg

With automakers and governments committing to electrification of vehicles, we are going to see a significant ramp up in the electric vehicle market. More plug-in options are coming out, billions are being invested, and governments are seriously planning the end of combustion vehicles. It really is a paradigm shift.  In large part we have Tesla to thank. If they hadn’t shown the world what was possible, who knows when this would have happened. Certainly the future would be a bit darker.

Source

Link to comment
Share on other sites


  • Views 258
  • Replies 0
  • Created
  • Last Reply

Popular Days

Popular Days

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...




  • Recently Browsing

    • No registered users viewing this page.
  • Popular Contributors

  • Topics

  • Posts

    • It appears to me that this is a key aspect of the 2030 initiative ideology. While the Rothschilds were indeed influential individuals who were able to sway governments, much like present-day billionaires, the true impetus for change stems from the omnipotent forces (Satan) shaping our world. In this case, there is a false God of this world. However, what drives action within a political framework? Power! What is unfolding before our eyes in today's world? The relentless struggle for power. The overwhelming tide of people rising. We cannot underestimate the direct and sinister influence of Satan in all of this. However, it is up to individuals to decide how they choose to worship God. Satanism, as a form of religion, cannot be regarded as a true religion. Consequently, just as ancient practices of child sacrifice had a place in God's world, such sacrifices would never be accepted by the True God of our universe. Despite the promising 2030 initiative for those involved, it is unfortunately disintegrating due to the actions of certain individuals in positions of authority. A recent incident serves as a glaring example, involving a conflict between peaceful Muslims and a Jewish representative that unfolded just this week. https://www.theguardian.com/world/2024/mar/11/us-delegation-saudi-arabia-kippah?ref=upstract.com Saudi Arabia was among the countries that agreed to the initiative signed by approximately 179 nations in or around 1994. However, this initiative is now being undermined by the devil himself, who is sowing discord among the delegates due to the ongoing Jewish-Hamas (Palestine) conflict. Fostering antisemitism. What kind of sacrifice does Satan accept with the death of babies and children in places like Gaza, Ukraine, and other conflicts around the world, whether in the past or present, that God wouldn't? Whatever personal experiences we may have had with well-known individuals, true Christians understand that current events were foretold long ago, and nothing can prevent them from unfolding. What we are witnessing is the result of Satan's wrath upon humanity, as was predicted. A true religion will not involve itself in the politics of this world, as it is aware of the many detrimental factors associated with such engagement. It understands the true intentions of Satan for this world and wisely chooses to stay unaffected by them.
    • This idea that Satan can put Jews in power implies that God doesn't want Jews in power. But that would also imply that God only wants "Christians" including Hitler, Biden, Pol Pot, Chiang Kai-Shek, etc. 
    • @Mic Drop, I don't buy it. I watched the movie. It has all the hallmarks of the anti-semitic tropes that began to rise precipitously on social media during the last few years - pre-current-Gaza-war. And it has similarities to the same anti-semitic tropes that began to rise in Europe in the 900's to 1100's. It was back in the 500s AD/CE that many Khazars failed to take or keep land they fought for around what's now Ukraine and southern Russia. Khazars with a view to regaining power were still being driven out into the 900's. And therefore they migrated to what's now called Eastern Europe. It's also true that many of their groups converted to Judaism after settling in Eastern Europe. It's possibly also true that they could be hired as mercenaries even after their own designs on empire had dwindled.  But I think the film takes advantage of the fact that so few historical records have ever been considered reliable by the West when it comes to these regions. So it's easy to fill the vacuum with some very old antisemitic claims, fables, rumors, etc..  The mention of Eisenhower in the movie was kind of a giveaway, too. It's like, Oh NO! The United States had a Jew in power once. How on earth could THAT have happened? Could it be . . . SATAN??" Trying to tie a connection back to Babylonian Child Sacrifice Black Magick, Secret Satanism, and Baal worship has long been a trope for those who need to think that no Jews like the Rothschilds and Eisenhowers (????) etc would not have been able to get into power in otherwise "Christian" nations without help from Satan.    Does child sacrifice actually work to gain power?? Does drinking blood? Does pedophilia??? (also mentioned in the movie) Yes, it's an evil world and many people have evil ideologies based on greed and lust and ego. But how exactly does child sacrifice or pedophilia or drinking blood produce a more powerful nation or cabal of some kind? To me that's a giveaway that the authors know that the appeal will be to people who don't really care about actual historical evidence. Also, the author(s) of the video proved that they have not done much homework, but are just trying to fill that supposed knowledge gap by grasping at old paranoid and prejudicial premises. (BTW, my mother and grandmother, in 1941 and 1942, sat next to Dwight Eisenhower's mother at an assembly of Jehovah's Witnesses. The Eisenhower family had been involved in a couple of "Christian" religions and a couple of them associated with IBSA and JWs for many years.)
  • Members

    • lrramey

      lrramey 23

      Member
      Joined:
      Last active:
    • Pudgy

      Pudgy 2,380

      Member
      Joined:
      Last active:
    • Anna

      Anna 5,079

      Member
      Joined:
      Last active:
  • Recent Status Updates

  • Forum Statistics

    • Total Topics
      65.4k
    • Total Posts
      158.9k
  • Member Statistics

    • Total Members
      17,669
    • Most Online
      1,592

    Newest Member
    Miracle Pete
    Joined
×
×
  • Create New...

Important Information

Terms of Service Confirmation Terms of Use Privacy Policy Guidelines We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.