Tesla production line
Rapid battery cost declines, rising commitment from major automakers, strong policy support from state and local governments, and low operational costs (including discounted charging tariffs from utilities) have put electric vehicles (EVs) on track to pass gasoline-powered vehicles, writes Jeffrey Rissman of Energy Innovation, a San Fransisco-based energy and environmental policy think tank. Indeed, U.S. EV sales have grown an average of 32% annually from 2012-2016 and 45% over the year ending June 2017.
Considering these advantages, automakers and investors face several big questions: How fast can we expect EVs to increase market share in the United States? What penetration will they achieve, by when? How will these outcomes be affected by external factors like oil prices and government policy support?
Energy Innovation has released an updated version of the Energy Policy Simulator (EPS) computer model. This tool can assess the impacts of dozens of policies on emissions, cost/savings, early deaths from particulate pollution, and now, the composition of the U.S. vehicle fleet. By analyzing multiple scenarios in a new research note, the EPS forecasts EVs will make up 65% of new light-duty vehicle sales by 2050 , and EV sales could reach up to 75% by 2050 in the event of high oil prices or strong technology cost declines.
U.S. electric vehicle deployment forecast to 2050
A Powerful Tool For Estimating Electric Vehicles In The Future U.S. Vehicle Fleet
The EPS can estimate the market share of EVs in the U.S., both in the business-as-usual (BAU) case and in scenarios with a variety of relevant policies (such as a carbon tax, vehicle fuel economy standards, EV subsidies, an EV sales mandate, a low-carbon fuel standard, and more). Figure 1 compares the EPS’s projections of EV sales as a share of sales of all U.S. light-duty vehicles (LDVs; meaning cars and similar vehicles) to projections from the U.S. Energy Information Administration’s Annual Energy Outlook 2017(the “no Clean Power Plan” side case) and Bloomberg New Energy Finance’s Electric Vehicle Outlook 2017.
BNEF projects a slow increase through 2021, faster through 2025, and then a dramatic acceleration through 2035, by which point, well over half of all new LDVs sold will be EVs. The EIA projects a very slow increase through 2026 and that the share will remain essentially flat after that point. Our EPS projection is closer to that of BNEF. The EPS projects a slower start than BNEF, but with similarly rapid growth in EV market share after 2026. By 2050, EVs are projected to make up 65% of new U.S. LDV sales.
High Potential Energy, Emissions Savings Put Electric Vehicles On Track For Growth
The transportation sector is a major energy consumer, accounting for roughly 29% of primary energy use in the United States. 80% of this energy is for on-road vehicles, which are predominantly powered by petroleum gasoline or diesel. Unfortunately, petroleum-powered vehicles have a number of downsides. They are inefficient: a typical gasoline car converts only 17%-21% of the chemical energy in the fuel into useful work. Petroleum fuels are expensive per unit energy compared to other fuels, and they would be even more so if the U.S. government did not subsidize oil production by more than $4 billion per year. They emit carbon dioxide (CO2), causing global warming. And vehicle emissions are the biggest contributor to particulate pollution: tiny particles that lodge in people’s lungs and kill 200,000 Americans each year.
Given their host of problems, petroleum-powered vehicles are ripe to be reformed, by making them far cleaner and more efficient, and ultimately, displaced. However, petroleum-powered vehicles are a mature technology, benefitting from decades of refinement and economies of scale that have driven down costs. It is not enough for a new technology to have the potential to be cheaper and better-performing than petroleum-powered vehicles. To compete effectively, electric vehicle technology must climb its own learning curve, driving down costs and improving performance, to the point where it is more attractive than petroleum-powered vehicles.
Battery electric vehicles (EVs) are on track to achieve this break-out. They already enjoy a number of advantages:
- EVs are three times as efficient as gasoline vehicles: 59%-62% of the electrical energy is converted into power to turn the wheels. Their efficiency means that they cost little to operate: a typical electric vehicle can travel 43 miles for $1 worth of electricity . This is about one fourth of the fuel cost of typical 2016 gasoline-powered cars and SUVs.
- EVs have far fewer moving parts than vehicles with internal combustion engines, so they are more reliable and require less maintenance.
- EVs can accelerate faster than gasoline cars, for a variety of engineering reasons.
- The electricity for EVs can be generated using zero-emissions technologies, such as solar PV, wind, hydro, or nuclear power, saving lives and reducing climate change impacts.
Future Factors Will Affect Electric Vehicle Adoption
Given these advantages, why don’t most new car sales today consist of EVs? One reason is price: though EV costs are falling rapidly, and battery costs could decline to $73 per kilowatt-hour in 2030 according to BNEF, it is still cheaper today to purchase a fossil fuel-powered car.
Forecast electric vehicle battery cost projections to 2030
Additionally, not all regions have abundant EV charging infrastructure, and some people (such as people without an off-street parking space) may have difficulty charging their vehicles at home. Nonetheless, strong demand exists for EVs among some consumer segments. Policymakers, desirous of the public health and environmental benefits of EVs, are using a variety of policies to help promote them. Examples include subsidies for EV buyers, access to restricted travel lanes on highways, and public charging infrastructure deployment.
Part two of this analysis examines the effect that factors like EV purchase price, petroleum prices, and fuel economy standards will have upon EV adoption, as well as how EV adoption will increase total U.S. electricity demand.
Editor’s Note
Jeffrey Rissman is Energy Innovation’s Head of Modeling & Energy Policy Expert. This article was first published here and is republished here with permission.
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EVs should become cheaper to manufacture than ICEVs within the next five years. (It’s all about battery prices which are falling fast.)
Depending on how rapidly traditional manufacturers ramp up EV production the cost to purchase an EV could be significantly lower than that of a similar featured ICEV within 10 years.
EVs already cost about a third that of an ICEV to operate.
I walked past a BMW 320i today. Sticker price ~$34k and change. Very close to the Tesla 3 base price of $35k. And – an expected fuel cost of $1,500 per year.
13,000 miles * 0.3 kWh/mile * $0.10/kWh = $390 per year.
Over the next ten years a very extensive rapid charging system should be built out that serves all but the real out of the way places. And in those places it should be possible to slow charge.
So. It’s 2027 and you’re in the market for a new car. Will you pay more to get a car that will cost more to operate? Plus forces you to spend a few hours a year standing out in all sorts of weather filling its tank and take it to the shop a couple times a year for an oil change.
People will have forgotten what range anxiety was. Just like the fear that driving over 60 miles an hour would kill you because you wouldn’t be able to breathe.
I’m guessing we’ll be close to 100% EV for new car purchases by 2030. Car companies will have pretty much quit manufacturing ICEVs.
$0.10/kWh only applies to home charging. “An extensive rapid charging system”, would be expensive to build so charging costs will be much higher than at home. In the UK the cost of charging away from home is around £7.50/30 min. So no cheaper than a diesel which can be fuelled in a minute.
European car makers plan to offer their vehicles in ICEV, hybrid or BEV versions. Consumers will not take kindly to a lack of choice.
“$0.10/kWh only applies to home charging. ”
More than 90% of all charging should be at home or where the vehicle parks during the day. Only on a tiny percent of all driving days do most people travel more than 200 to 250 miles.
Ten cents is likely a high estimate. Being opportunistic loads, EVs should get the very best time of use rates utilities have to offer. If utilities can sell all the electricity generated by wind and solar farms by offering the “extra” to dispatchable loads they can install larger amounts of the cheapest generation.
Having a market for generation that exceeds the normal (non-EV) load means that utilities will need to spend less on storage and dispatchable backup.
Consumers can be offered all sorts of choices. The question is how long will it take them to cease purchasing vehicles that cost more to purchase, cost more to operate, and will probably be banned from many cities.
At what point does rational behavior destroy demand for the ICE?
Bob, Brits generally behave in a very rational way. Hence on grounds of cost electric vehicles are struggling in the UK:
http://www.dailymail.co.uk/money/cars/article-4947726/Electric-cars-330-expensive-insure.html
Right, Nigel….
“The last four years have seen a remarkable surge in demand for electric vehicles in the UK – new registrations of plug-in cars increased from 3,500 in 2013 to more than 107,000 by the end of July 2017.”
“The number of new cars registered in the UK hit a 12-year high in January, with electric vehicles taking a record share of the market, according to the Society of Motor Manufacturers and Traders (SMMT).”
About your source…
The Daily Mail seems to have a poor reputation. Wikipedia editors recently voted to ban the Daily Mail tabloid as a source for their website after deeming it “generally unreliable.”
I pay .25 per kWh, so I don’t care about your silly issue.
No cheaper than a diesel? hahahahahahahahahahahaha
$3.50/g here for diesel so what is the $7.50 compared to a
10g diesel fill at over $30? Even a large battery would only be around $15 to charge. In 2025 a charge will take 10 minutes. Get used to it.
I was talking about the UK and Europe, not the US and low fuel prices driving excessive consumption. The world doesn’t revolve round the US. Try reading posts properly before you reply.
Everything points to Mr. Wallace’s prediction being right on. No ICE’s will be allowed on public roads ANYWHERE in the world by 2050.
That is a just an unfounded prediction too. I can tell you that the UK is not planning to ban hybrid sales post 2040, just sales of ICE only cars. Also the proposed ban is on sales, not ICE cars on public roads.
Nigel, why do you think there will be any hybrid cars to ban by 2040? (Aside from a tiny number owned by car collectors.)
Within five years, if it’s not already the case, it should be cheaper to manufacture a EV than a hybrid. Economics will kill off hybrids.
Bob, Schalk Cloete’s article indicates your prediction that hybrids will be killed off by BEVs is highly unlikely:
https://energypost.eu/15743-2/
I’ve read the article. I am unimpressed.
Did you notice his heavy thumb on the scale?
He used 80 kWh battery packs which throws the math way off.
They are only 25 years wrong in this prediction. And by 2030, greater than 90%. Prices will continue to drop by 5% a year for the foreseeable future as economies of scale expand and the billions being invested in EV’s and battery technologies pay dividends in reducing prices.
Model 3
2018 – 35,000
2019 – 34,000
2020 – 32,000
2021 – 30,000
2022 – 29,000
2023 – 27,000
2024 – 26,000
2025 – 25,000
All, while ICE vehicles go up in price by 2 to 3% per year.
Not mentioned at all is autonoumous vehicles – easier to implement witj EVs than ICEs. This will be the killer for ICEs – I have driven for more than 40 year – I hate it – & can think of 100 things to do rather than drive – & I’m not alone.
With respect to Mr West – I suggest you get up to speed with the endless trials of EVs in the the Uk in the period 2010 – 2015 – home charging was around 80 – 90%. Anybody that is OK with charging from a 16 amp socket outlet should be paying circa 20eurocents.
You will no doubt be aware of the network issues with charging EV’s at home in the UK. LV networks will not be able to cope with many EVs charging overnight targeting low price periods, due to lack of capacity particularly at 32A. That will take possibly decades to fix and will be very costly overlaying LV mains cables across the UK. Public fast chargers will not be so disadvantaged. They will trump at home charging too at rates comparable to pumping fuel into a car’s tank.
I don’t doubt the trials showed home charging to be popular. Perhaps because there were few public chargers then, they are not much faster yet, and EV trials involved people who could park on a private drive to hook up a lead. Let’s not forget that in densely populated parts of the UK there are many flats and homes without drives making charging at home difficult too.
UK Government takes about £30bn on fuel tax/duty. It’s inevitable that as EVs become more popular Government will move to tax them to make up for lower revenue on sales of road fuels. So the current cheap EV running costs might not last.
“LV networks will not be able to cope with many EVs charging overnight targeting low price periods”
Right. In the UK you have to work out a schedule so that you don’t make a cuppa, roast a joint in the oven, dry clothes and run a hot bath at the same time.
Electric kettle 1200 watts
Oven 1200 watts
Clothes dryer 3000 watts
Water heater 4500 watts
9,900 watts
A Tesla S charging from a 240 50A circuit pulls 9,600 watts.
At that rate the S charges 29 miles an hour. In 2013 Brits drove an average of 21 miles per day.
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Finally electric mobility is a reality. Some governments are more into this process than other, but eventually the whole world will accept and use electric vehicles instead of petrol one.
Governments will likely be catalysts, speeding or slowing the transition, but the move to electric transportation will largely be driven by economics.
We should be only short years from purchase price parity between EVs and ICEVs. After that is should cost less to purchase an EV. Add in the lower operating costs, better and safer ride, improved acceleration, and overall convenience and the internal combustion engine will go away.
They have been a reality for some time, but pure EV sales have plunged in the UK. A £4500 Government subsidy is being withdrawn at the end of this month which will further impact sales of EVs here.
https://www.thetimes.co.uk/article/electric-car-sales-tumble-over-price-and-plugs-6db2tbwf3
The UK preference is for hybrids, not pure EVs requiring massive expensive batteries.
I bet you’re going to be really surprised to see EVs with their “massive expensive batteries” becoming cheaper than PHEVs.
Leaving EV subsidies in place for a while longer would be desirable but will likely have no impact on how rapidly EVs replace ICEVs.
It’s all about battery prices and battery prices are plunging.