Recently, Consumer Reports more and more Americans are considering buying or leasing an electric car. In fact, in the latest survey, 15% of licensed drivers who responded said their next car would be an EV. utilities Bloomberg (paywall) tells its subscribers that electric cars have passed a critical tipping point in the US and that a quarter of all new cars sold in America will be electric by 2025, several years earlier than expected.
The S-curve
In the tech world, people like to talk about the S curve, a graphic (and somewhat mythical) symbol that claims to predict when new technology will become mainstream. In theory, once a new, new thing reaches 5% market penetration, its adoption rate goes up exponentially before declining at the end. Think of the smartphone. At first people thought it was a fad, then everyone had to have one. There are a few holdouts rocking flip phones these days, but they are by far the minority.
CBS News reports that the United States is the latest addition to a growing list of countries where all-electric cars account for 5% of new vehicle sales, a hurdle opening the gate to mass adoption, based on the latest findings from Bloomberg† In the past 6 months, the US has moved past that tipping point, after 18 other countries. If the previous trends continue, a quarter of new car sales could be electric by the end of 2025. Bloomberg predicts.
When it comes to electric cars, 5% seems to be the magic number where the early adopters are joined by most of the rest of a country’s population. Bloomberg found that the scenario had played out in Norway after the first quarter of 5% in 2013, followed by China in 2018 and then South Korea last year. Canada, Australia and Spain are among the other major auto markets approaching the tipping point this year.
Every country that has crossed the border has a program of federal incentives and pollution regulations. That includes the US, where the White House last year called for EVs to make up half of all new cars, including hybrids, by 2030. The US should meet that target several years ahead of schedule, Bloomberg say.
Global efforts to get rid of the internal combustion engine have weakened the historically close relationship between GDP growth and crude oil demand, said Ed Morse, chief of commodity research at Citigroup. CBS† “We are confident that China has reached its peak in diesel demand and has reached its peak in gas demand,” Morse said. CBS MoneyWatch last week, citing China’s high share of electric cars or hybrids. World oil demand will peak by the end of the decade, he added.
Many a slip Twixt the cup and the lip
All forecasts are like weather forecasts – advisory at best. Some people think local weather forecasts would be better if there were windows in meteorologists’ work areas so they could see what’s happening outside.
Interest in electric cars in the US is boosted by high gasoline prices. If they fall as quickly as they have risen, the demand for electric cars could decline. Supply issues are also a challenge for manufacturers struggling to source enough battery cells, computer chips and other critical components to meet the demand for electric cars. Dealers don’t help by imposing exorbitant price increases on cars that are in high demand but in short supply.
America needs more electric car chargers to overcome the range fears many motorists have, and the fossil fuel industry is still using its power to sow fear, uncertainty and doubt among potential EV buyers. But for all that, America seems poised to embrace electric cars and trucks, thanks in large part to Ford, GM and Dodge Racing to bring to market battery-electric trucks and SUVs — vehicles that buyers of conventional cars and trucks crave.
The S-curve is not a law of physics like Einstein’s theory of relativity. It is a device that be able to suggest when a new technology will be widely adopted, but there are still many things that can go wrong on the road to the EV revolution. Many of you don’t like to talk about politics, but if the reactionaries take control of both houses of Congress in November, the impetus for clean transportation policies at the national level could be dampened. And battery supply may not be as close to demand as hoped.
Whether the tipping point for electric cars will be as fast as Bloomberg thinks it will is largely irrelevant. The momentum is building, the EV revolution is coming, and nothing will slow it down for long.
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