Published on September 24th, 2017 | by Zachary Shahan0
Progression Of The EV Revolution (2017–2030)
September 24th, 2017 by Zachary Shahan
Most of you reading this are in agreement: electric vehicles will upend the conventional vehicle industry within the next
50 10–20 years. The pollution industry in the world of transport will be destroyed. Gasmobiles stinking up cities, garages, lungs, hearts, and minds will be retiring to scrapyards and history books. But the endgame is sort of boring — yes, awesome, but boring since it is the end of it all.
One of our most prolific commenters — commenting here on CleanTechnica even before I arrived — once wondered to me in an email what readers would move on to when the cleantech transition is mass market. It threw me off, confused me for a minute. Why would they stop reading about cleantech? But his point came from his own personal history. He had engaged in similar years-long discussions, like the movement from film cameras to digital cameras. But he and others eventually left the daily discussion once the wave of that transition basically engulfed the mass market. Thinking about it a bit, the point became clear: the transition is fascinating; the market after the transition is over, not so much. Well, maybe it can be interesting, but often to different people/communities.
That whole conversation crossed my mind after I was inspired the write this article, though. Mike Barnard’s recent piece is what stimulated this article. He offered a thoughtful take on some of the wide-ranging effects of the transition to electric cars. At the end of it, an extra question somehow popped into my head: “But what will the progression of changes be?”
In other words:
Yes, the number of gas stations will start decreasing, but … When? What will happen right before? What will happen right after?
Yes, EV drivers will have different environments for their long-distance charging needs, but how will those places evolve from what they are now to what they’ll be in 2030?
Yes, some giant automakers will shrink — maybe even collapse — and some upstarts and Chinese auto boxers will rise to unprecedented heights, but how will this transition progress from year to year?
So, I decided to put myself out on a limb. (Also, I’m basically presenting on this topic at Intersolar ME this coming week — my presentation is on the topic of “The Electric Vehicle Market Today & in 2020” — so I figured it would be useful to put myself through this exercise. As usual, I also figured it would be much more fun to do so in public than quietly alone in an airplane window seat.)
There’s no chance in hell the forecast below will be accurate. But I do think the progression of events I’m presenting is a broad overhead view of what’s in store for us in the coming decade or two. In future years, I’ll be sure to revisit the accurate predictions and ignore the supremely idiotic ones. 😉
The first truly long-range and semi-affordable electric car models start arriving on the market. Production is ramping up on the somewhat long-range Renault Zoe (introduced in Europe at the end of 2016) and the Chevy Bolt (introduced in the USA at the very end of 2016). The Tesla Model 3 arrives and production ramps up toward the end of the year. These models as well as a growing stream of other plug-in cars continue to grow electric car sales in the US, Europe, China, and around the world.
To further support long-distance transport in an electric car, Tesla quickly grows and diversifies its already vast Supercharging network, and other automakers lay some behind-the-scenes groundwork for high-power, superfast charging networks for their electric cars. Early EV charging leaders like ChargePoint, EVgo, Fastned, and GreenWay ready their offerings for superfast charging.
Tesla continues to grab headlines in broad tech, car, investment, political, and green circles thanks to futuristic and surprising statements about artificial intelligence (AI), electric transport, space, hyperloop transport, and some boring stuff.
Major automakers make big PR and marketing splashes announcing “100% electrification” plans and timelines. They aren’t really 100% electrification plans since they are about electrifying all models, but not all cars produced — and some of them include conventional hybrids in those targets. But these plans help to finally make it clear to more of the public and industry suppliers that automakers do envision an electric future.
By the very end of 2017, the electric car market is really heating up, especially in the US, thanks to volume production of the highly demanded Tesla Model 3. The electric car market is hitting a new phase, a phase in which one of the highest selling passenger cars in the US is electric.
The electric bus market is booming in China, while US and European transit agencies are moving beyond pilot program orders to real orders for electric buses based on their cost-competitiveness and better attributes for drivers, passengers, and cities.
Similarly, delivery vehicle fleets are starting to electrify to a notable degree — Streetscooter (a fully owned subsidiary of Deutsche Post DHL Group) begins to electrify fleets at low cost.
EV charging stations start getting connected more systematically with food, retail, and recreational support environments, offering early movers more profit from highly captive humans looking for a place to rest, eat, shop, and be entertained.
Many more “normal people” start getting exposed to electric cars, especially because of the arrival of hundreds of thousands of eye-catching Tesla Model 3 sedans in their neighborhoods, at their workplaces, in their shopping center parking lots, at local sports games, and behind them, in front of them, and next to them on highways. Tesla Model 3 videos invade YouTube.
For many of these people, the idea of an electric car in their life first enters their mind. For the first time, hundreds of thousands of people — or millions of people — are told, “You should get one!” It should take a few more nudges like that before they get it, but they will. Soon, they will be wondering more seriously, “Hmm, maybe I should consider an electric car.”
Despite the persistent naysayers, volume production of the Model 3 stimulates more Tesla Model S, Tesla Model X, and Tesla Model 3 sales than previously expected. It also stimulates more sales of the lower-priced by fairly long-range Nissan LEAF, more sales of plug-in hybrids, and dramatically fewer sales of dozens of gasoline-powered cars.
Oversupplies of gas cars on dealer lots and overproduction of the same cars in automobile factories start to weigh on corporate profits and slowly worsen the depreciation of these gas cars. Proposals to ban diesel cars (and even gas cars) in certain cities in Europe continue to lower diesel car sales in Europe, with more consumers shifting to plug-in hybrids and fully electric offerings.
Non-Tesla superfast charging networks start budding in the United States and Europe, making fully electric car use more practical for certain populations, but not yet resulting in a dramatic uptick in non-Tesla fully electric car sales. Tesla’s Supercharging network nears the stage where basically every major city is within driving distance of a Tesla Supercharger.
Tesla Model 3 deliveries begin in small volumes in Europe. Meanwhile, enough Europeans and Americans learn what Tesla is and learn a bit about the electric cars it offers that more than 50% of these populations have this basic awareness. Similarly, over 50% of these populations come to understand that other automakers have plug-in models on the market as well.
Tesla also unveils the Model Y, announcing a 2019 start of production target. Deliveries of its electric semi truck begin in small volumes. Model 3 reservations/orders take a hit as consumers postpone their first Tesla in order to get a Model Y, but overall awareness of Tesla and the product’s superiority over competitors still leads to growing Model 3 demand that outpaces Tesla’s ability to produce the vehicle. The car also wins every major automotive award it’s eligible for in 2018.
As the Model 3 arrives in volume in Europe and other plug-in options from Nissan, Renault, BMW, Mercedes, Volvo, Volkswagen, and other producers pick up momentum, major markets like the Netherlands, France, Germany, and the UK approach or pass 10% plug-in car sales (as a total of all new car sales in the year). Early implementation of anti-pollution driving zones in certain major cities also stimulate some of this growth.
The delivery vehicle market electrifies at a similar pace in Europe thanks to competitive offerings from companies such as Streetscooter, Renault, Nissan, Daimler, and Volkswagen Group as well as global commitments from corporate giants involved in the EV100 campaign. This market electrifies a bit more slowly in North America but starts to gain real momentum.
EV-only dealerships pick up steam (or electrons?) in North America as consumers look to compare electric offerings across brands more and want to pick the brains of EV experts. These dealerships focus more on making customers happy and sharing their vehicle expertise in the decision-making process, and focus less on funneling customers as quickly as possible into a paperwork tunnel. They also allow online purchasing.
Tesla Gigafactories are under construction or planned in Nevada (almost done), another US state or Mexico, Europe, India, and China. Large battery factories for other automakers that provide a similar total battery production capacity are also under construction, in expansion, or planned in North America, Europe, and Asia. (That means the other automakers combined have deals for batteries in the pipeline that are comparable in volume — GWh of battery production capacity — to Tesla’s similarly scheduled Gigafactories.)
Tesla starts producing the Model Y in limited volumes as Model 3 production is finally catching up to demand and as Tesla semi truck production is starting to ramp. More batteries are needed. Funding is pouring in for high-speed growth and massive investments in battery factories + growing production lines, and Tesla’s valuation is approaching the top of stock world. It has also been benefiting from growing energy storage, solar, and supplementary in-house cleantech product sales.
Depending on policy, China’s plug-in car share of new car sales is around 10% going into the year and 15% going out … or perhaps it is near the 10% marker at the end of the year — come on, give me a little wiggle room.
Between lower than expected demand and continued oversupply, oil companies are really feeling the pinch now. Bankruptcies are in full bloom and investors are heading for the doors instead of holding onto shares of the major players — ExxonMobil, BP, Dutch Royal Shell, Chevron, etc. Financial struggles are also rising in the Middle East, and tensions between nations are growing. It is clear that the transition to electric transport is not just another tech transition and certain types of global instability are a risk in the midst of the shift.
Money is now flowing in high volumes into battery factories, underlying suppliers, and quickly electrifying automobile manufacturers. Whether demand is shrinking or growing, though, corporate profit margins and profits are shrinking. Slow-to-transition manufacturers are losing sales and market share, which is hurting their financial bottom line, while leading manufacturers are pouring money into new model R&D and scaling up production of electric cars and their components (batteries, motors, autonomous-driving hardware and software).
In Germany, common political discussions concern the degree to which the government should support automakers in the EV transition. In the US, Ford and GM are teetering on bankruptcy. Who knows what happened to Fiat Chrysler Automobiles? No one has known for years.
EV charging stations are becoming abundant across the United States and Europe, but more focus is now being placed on fast charging, superfast charging, and regulations for charging at multi-family housing developments.
Heavy-duty electric trucks account for 10–20% of market in the US and Europe, while electric buses account for >70% of new bus sales. Proterra and BYD have expanded dramatically in the US, while Volvo, Daimler, and BYD have scaled up the most in Europe.
Utilities are deep into vehicle-to-grid and smart charging pilot programs.
Tesla becomes as valuable as Apple (market cap) toward the end of the year.
One of the world’s largest oil companies declares bankruptcy.
Unless heavily hampered by battery production constraints, plug-in cars account for 20–25% of new car sales in the US and Europe (more conservatively, ~15%). Fully electric cars with long range and superfast charging capability are now cost-competitive with gasoline-powered cars upfront, and cost less to maintain, but mental and cultural inertia (illogical concerns and preferences) leave 75–85% of the market for gas cars.
As battery production is ramping up, funding is flowing into massive new projects around the world — much of the money is flowing out of oil & gas.
Automotive repair shops are not being hit too hard yet, but they are starting to feel the pain and many are eyeing exit routes. Many gas stations have tried to shift to accommodate electric cars, but some much more successfully than others. Gas stations are becoming a bit less common, which is starting to inconvenience drivers in certain regions.
Workplace charging has exploded, further putting the electric car transition in the face of gas car drivers. Most car-buying Americans and Europeans expect their next car “will be electric” or “might be electric,” according to a market research report from CleanTechnica Research.
Plug-in hybrid development starts to fade as fully electric cars with long range and superfast charging become more competitive and because automakers have long since stopped or slowed investment in engine R&D and manufacturing. Engine factories are being reconfigured as electric motor and battery factories.
Tesla is producing ~4 million Model 3 and Model Y vehicles per year as well as ~100,000 Model S and Model X vehicles. It also starts producing an electric pickup truck and electric minibus … or at least unveils an electric minibus. But it is finally seeing some genuine competition to the Model 3 and Model Y in terms of performance, cost, range, and charging options of larger automakers’ electric offerings.
A great deal of investment is being put into solid-state battery R&D and startups, but no commercially competitive solution has come along yet to replace low-cost lithium-ion batteries in the foreseeable future. Lithium-ion battery costs have fallen dramatically in the past decade as production has risen to such a large scale and thanks to well developed supply chains. I’d show you a chart, but none of the researchers from 2017 have projected the trend accurately enough.
Electric buses account for 80–90% of new bus sales. New urban delivery vehicles are nearly 90% electric. New battery markets have been built up around these vehicles to offer a tailored balance between power capacity, energy capacity, and cost per kWh.
Non-Tesla high-power/superfast charging networks are reaching regional distribution in Europe and North America comparable to Tesla’s 2017–2018 distribution. However, they offer higher power — commonly, 150–300 kW max capacity. This makes fully electric cars from all automakers hyper-practical for normal commuting and city driving as well as long-distance trips.
Plug-in hybrids are primarily being bought by more conservative “early majority” consumers and for niche use cases, but since the “early majority” and beyond is a sizable portion of the market, this segment of the EV market seems strong on the surface. Early majority buyers and late majority buyers will soon realize that fully electric cars do the job they need at a better deal and with more consumer driving benefits.
Almost all hot new models from automakers have been designed electric (to some degree at least) from the ground up. Common electric platforms, like Volkswagen’s MEB platform, have come to dominate automakers’ production focus while they work at a faster and faster pace to modify vehicles in order to accommodate (or morph with) fully autonomous driving functionality, which a growing number of cities and countries are allowing in specific zones. Automakers are also increasingly focused on designing models for robotaxi use.
25–35% of new passenger car sales are plug-in cars in the USA and Europe.
As massive battery factories are in production around the world and EV charging networks are expanding and innovating their business models, there’s an exodus underway from oil company stocks. Additionally, city and national governments feel emboldened to set 100% electrification targets and roll out gas and diesel car bans, fees, and/or scrappage subsidies. These are replacing previous electric car subsidies.
Autonomous vehicles are picking up steam in certain cities, states, and countries but are still in primarily limited use as robotaxis. However, business models are more quickly developing around the robotaxi concept and what is being offered to supplement that — both outside the vehicles in terms of customer and car service as well as entertainment-wise within the cars. Tesla’s robotaxi network has launched in limited markets. Otherwise, in other markets, it is running as a carsharing service for owners who opt into that.
35–50% of the new car market in the US and Europe are plug-in cars. In China, 50–70% of the new car market is plug-in cars. Nonetheless, air pollution problems are still plaguing cities in all of these places and there’s growing impatience with pollution in an era when electric transport is so viable and there are so many options on the market.
Traditional gas stations and auto repair + oil change shops are being squeezed significantly, shuttering windows and taking down signs as a result. This “sorry, the world is changing and we’re gone” message is slapping late majority consumers in their faces and telling them it’s time to venture outside their comfort zones and adopt the “new tech.” What are generally termed “laggards” and “die-hards” are not yet convinced and prefer to stick with what they’re familiar with, but it becomes clear they are pushing against the waves of change (yet again) and will have to adapt a bit to navigate the shift that is happening around them.
People are still hyping hydrogen. But not many more people than the number skeptical that we landed on the moon.
Depending on battery supply constraints up till now, the overall market transition to electric cars, and the development of EV charging infrastructure, the transition to electric transport among new vehicles spirals up to 50–100% in the following 5 years.
This still leaves plenty of legacy gas and diesel cars on the roads, since used electric cars haven’t been able to trickle down to the majority just yet. But the growing use of on-demand taxis and robotaxis hastens the retiring and scrapping of crappy old rumbling engines and the metal + plastic boxes around them. It is both cheaper and more luxurious for many people to order up a ride when they need one than to be burdened with owning a car — plus, mountains of debt have pushed many consumers toward this alternative and public transit.
Oil companies have long shrunk in value, have gone through or are going through restructuring, and are facing lawsuits around the world for their role in obfuscating* the scientific knowledge around global warming and climate change. The main executives at the helm of the oil companies in those times have long since retired, jumped ship, or been handed golden parachutes.
Chinese automakers are gliding into US and European markets while the major brands of the previous century are shrinking or in some cases have gone bankrupt from their slow movement into the EV transition.
Vehicle-to-grid technology starts to become an option, but it’s not yet clear if it will achieve mass-market uptake. Simpler smart charging that gives utilities or homeowners the option to charge more at times that help to keep the grid balanced is becoming common, offering a slight reduction in electricity bills as a result. Much charging is done in the middle of the day when solar power generation is high, but nighttime charging is still a large portion of charging as well and soaks up extra wind power generation in many regions.
Cities are much, much cleaner and quieter even though traffic is more or less what it was a decade prior.
Fleet managers are rising in a world of growing robotaxi use … and let’s hope Tesla Shuttle has spread across Europe by now. 😀
*h/t Stephen Hanley
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