In my episode of The Commute, I spoke about the electric vehicles (EV) market from a consumer and investor perspective. I specifically focused on major companies like Tesla and Ford. I also dove into the “secret” project Apple is working on in the EV space and what that might mean as we move forward.
In this blog I will be breaking down those topics a bit more in-depth and give some specific numbers and data regarding the EV market. This will also cover any future predictions I find in my research and any data those predictions come with.
First, I feel it is most important to give the sales numbers of EVs as far as September 2021 is concerned because it is hard to paint a clear picture without that type of data. In doing this research, a couple things jumped off the page, some valid and others not as valid in my opinion. The not so valid, the incredible jump in sales in the first half of 2021 compared to the first half of 2020. I think it is understandable to take the comparison numbers from 2020 to 2021 with a grain of salt due to the pandemic and that understandably stalling most car sales. When you’re looking at the EV market beyond what 2020 brought us and to today, Europe and China are the leaders. The United States lags significantly behind them. In the first half of 2021 according to Canalys.com, 1.1 million EVs were purchased in China, 1 million in Europe, and only 250,000 in the US. We’ll get into why I think this is later.
In 2019, EV sales rose 15% compared to the prior year (see more on that here). We then came into 2020 which, of course like I said earlier, will leave a big impact on EVs that potentially doesn’t show the true potential of what EV sales would have been. I’ll be more curious to see what sales numbers are in 2021 compared to 2019, but we will have to wait until we see official numbers for the year. My prediction is that we will find EV sale numbers grow in both the US and globally.
Even though the US lags behind, I think an increase in gas prices might lend itself to more sales in EVs. Potentially playing a factor in why the US would lag behind is the low gas prices for much of the last few years. After all, why pay for an all-electric vehicle when getting a traditional gas-powered vehicle isn’t breaking the bank at the pump. However, gas prices are now rising. More domestic car companies are putting an emphasis on producing EVs, and there are more charging networks as that effort continues to grow. All these combined with the effort from a government level to push towards clean energy, I think we see sales increasing.
As I mentioned in the video, the initial price tag of EVs is potentially another reason for lesser sales than traditional automobiles. When I looked into this, I was surprised to see just how much that initial price differs between the two types of cars. In 2019, the average cost of a new gas-powered car was $36,000. Compare this to the price of a new EV which came in at an average of $55,000, and you have a roughly $19,000 difference. Definitely cause to think this could have something to do with the sales numbers of each. Of course, the initial price tag is one cost, but owning the vehicle for the next 3 years and beyond is something totally different. Comparing these costs however is very difficult for a few reasons. There are a ton of factors that go into it. Where you live, what kind of driving, and how much driving you do. The price of gas over the life of owning the vehicle. The type of vehicle and it’s MPG. If it’s an EV, what is the battery life and what factors play a role in that. Installation of the charging station. All of this just to name a few. We still need more adoption of EVs over a longer period before we will be able to see any consistent numbers around operating costs that we can truly compare. Unfortunately, until then there are rough estimates of each that don’t give us a clear understanding of what our personal cost breakdown would be.
Going back to the global adoption of EVs; they are still a small percentage of the total number of vehicles on the road, right around 2%. However, this may be changing slowly. So what does the future look like for EVs? Automakers are anticipating and betting on the future for EVs to look very bright. They anticipate a huge increase in sales, and by 2030 are hopeful to turn the current 2% total vehicle sales that they are seeing into 24% of global vehicle sales. Much of this relies upon the continued investment by both the government and automakers to make the push towards EVs. Even if that means their profits get stifled for a bit by the slow adoption of these cars.
Ultimately, like I said in the video, I think we see a world where EVs that have the ability to also be autonomous vehicles take us everywhere. Even Walmart is getting in on the action by testing autonomous vehicles to complete their deliveries. In 2019, Elon Musk claimed that Tesla would have 1 million robot-taxis operating on the road. While that number was not reached, impacted by some elements out of Tesla’s control, it shows the overall mindset some automakers may have. There will be enough robot-taxis to go around you may not need to own a car if you don’t want to. I’m not saying you won’t, but as time goes on, I don’t think it will be as much of a necessity.
With the EV market there is still a lot of room to grow and see where things are in the future. I think the writing is on the wall that EVs and autonomous vehicles will play a larger role as time goes on, but I’m not sure how fast we will get there. This will definitely be something to keep an eye on as a consumer and investor.