EV’s have already won

Should the debate about the future market potential of electric vehicles (EVs) be over?  Yes.  There are now a combination of undeniable and unrelenting forces in place that were not there five years ago.  Let’s put an end to the on-going debate.  EV’s have already won.

Some of you concluded this a long time ago, sooner than you should have.  There are also many of you that continue to resist the reality and perpetuate the debate by asking, “How can that be true when the share of plug-in cars is struggling to even meet 10% of the market?”  The answer is simple, don’t look at the current market results, look at the future indicators.

Here are 5 reasons that EV’s have already ‘won’.

1. Development Money is now Continuing to Flow.

It’s hip to be an EV car company.  Tesla, NIO, Karma, Rivian, Lucid, and the hundreds of the new companies sprouting up in China are all shunning internal combustion engines (ICEs) for electric propulsion.  Essentially, all of the start-up car companies are EV companies.  That is because the powertrain is more efficient, the development price of entry is lower and EVs are what venture capital money and Wall Street likes to see.  Traditional OEM press conferences still highlight sexy dream cars and macho trucks but they can’t get off the stage without making EV launches and promises.

As a consumer, there are no more ‘one-size fits all compromises’ when shopping for an EV.  You can get different shapes, sizes and levels of luxury with additional offerings to be introduced in record numbers starting in the fall of next year.   Incumbent OEMs have had the time to respond in full force with GM’s Bolt, Nissan’s Leaf, Jaguar’s i-Pace, Hyundai’s Kona, Mercedes’ EQC, Audi’s e-Tron, Porsche’s Taycan, BMW’s i-brand and Volvo’s new Polestar brand to name a few.

2. Parts Infrastructure is now Sufficiently Mature.

The days of inventing and developing the necessary modern-day components is over.  We owe a lot to GM and their EV1 electric car, Toyota for the early Prius and Honda for their first Insight hybrid.  These companies had to invent the automotive controllers, charging systems, battery management systems and other key components in the 1990’s because they just did not exist yet.  Even GM’s EV1 windshield defroster had to be invented because there was no heat from an engine to draw from.  These OEMs and their suppliers paved the way by creating the systems and components we needed for the EV market to exist.

Today’s developments are about refining the details of the components and integrating them in a way that provides more value than the competition.  As an example, the electric motor sector is now trying to squeeze more longevity performance out of their e-machines by offsetting dielectric fatigue due to the insulative coating around the motor’s magnet wires.  This comes from ‘partial discharge’ from high voltage in the motor’s atmosphere.  We have come a long way from needing the basics.

Battery production capacity is now plentiful and available.  Too plentiful as a matter of fact at the moment.  Since there are several battery cell manufacturers with production capacity that can provide sufficient energy density, they are competing on other things like cost, longevity, etc.  Battery management system algorithms are key as well but that knowledge can be hired as today’s innovators are now proving.

3. Consumer Sentiment is More Open and Accepting.

EV cars and trucks are getting more fun and affordable to meet various needs.  Traditional OEMs love to hate Tesla but we have a lot to thank them for.  They broke down the barriers and showed consumers that electric cars can be exciting and cool.  If Tesla went belly-up, and closed their doors tomorrow, they would still have succeeded in their mission statement, “to accelerate the world’s transition to sustainable transport.”

The ‘chicken and egg’ problem of availability of public chargers to match EV adoption is working itself out.  Charging networks are growing and there is a competitive landscape of providers that will sustain the growth.  Today, public charging systems are competing on speed of charging in addition to availability.

Cold and remote locations have a harder time making EVs work for people.  For those of you that say, “You’ll never get me in one of those EV’s, I gotta be able to (enter extreme use case here)”.   That’s ok.  Soon the EV market will have a vehicle for you.  That’s what competitive markets do, they encourage companies to meet consumer needs better than the competition.

4. Governments Won’t Let the EV Market Go Backwards

Look past the US’s current politics and lack of an energy policy and look to the coordinated efforts of the Chinese government or the EU. The air quality is poor in many of China’s urban centers and people are getting sick.  As a result, they are continuing their all-out war on tailpipe emissions and CO2.  As the effects of pollution and climate change continue to weigh more in public policy decision making across the globe, zero emission mandates will become that much more prolific.

There are at least two additional reasons why governments won’t go back.  Many developed countries must rely on importing energy.  They will continue to look for ways to lessen their dependence on these external sources.  It is no surprise that Japan as a country is encouraging the use of electricity generating fuel cell technology.  It is better than importing energy from geo-politically sensitive countries.

Finally, countries are choosing to develop a national core competency in EV technology.  The focus on developing this high level of engineered content enables the growth of high paying jobs and profitable companies.  Germany is a very prosperous nation in part due to their emphasis on these and the related technical areas.  China seeks to grow their capability not only to improve air quality but also to enable domestic economic growth and leverage their natural resources, holding the dominant share of the global supply of precious metals used in EV motor technology.

5. Sales are Still Small but Growing Significantly.

There were a total of 2.1 million plug-in vehicles produced in 2018, as part of a global car market of over 70 million units.  Don’t worry that EV sales are a relatively small part of today’s global market.  Global sales of plug-in vehicles grew by 64% in 2018 with the China market accounted for 56% of global plug-in sales.  China is the largest automotive market in the world and their large percentage increases in plug-in cars will carry the day.  Adoption will encourage adoption.

China is now and will continue to dictate the future global automotive product planning decisions.  Even if that were not the case, London has announced Zero Emission Zones going into effect in 2025.  Paris wants to ban all gas and diesel combustion vehicles by 2030 and California has a proposal to ban all gasoline cars by 2040.  Purchase incentives are waning as a means to increase EV usage because it is costly to governments.  With both the ‘carrot and the stick’ available, governments are finding that the stick is cheaper.

As I get around, I always hear the advocate for the incumbent say, “the internal combustion engine is going to be around for a long time”.  Yes, it will be around a long time.  Average car ownership is over 11 years in the US.  Even if some law was passed (not recommended) that forced the immediate discontinuation of internal combustion in favor of 100% EV technology, the process of spooling up capacity, developing, building, selling and systematically replacing the global car park would take decades.

I also get around to the new OEM start-up companies.  Asking them if their powertrain is internal combustion is like asking if a cassette tape player comes standard.  There is little appetite for private capital to invest in and create yet another traditional car company.

I have been betting my paycheck on electric vehicles and their success for 20 years.  Not just talking about them as a bystander but in the mix, working to develop the market.  With that, I have been through the cycles of hype, set-backs, success and failure and have learned the reality of it all many times over.  As the insurance guy says, “I know a thing or two because I have seen a thing or two”.

Should the potential growth of electric vehicle technology really be debated?  Put a fork in it, it’s done.

EVs have already won.  Autonomous Vehicles (AV’s) are the new frontier.

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Sales volume data per source: EV-Volumes.com.  InsideEVs.