On October 25, 1955, the first microwave oven for residential use was sold. There weren’t many buyers, since the unit was heavy and bulky, required a 220 volt outlet, and cost $1,295 — equivalent to more than $10,000 in current dollars. Today, most homes have one and prices for small microwaves have tumbled to just over $100.
From VCRs to cell phones to flat screen TVs, technology follows a now familiar pattern: Expensive early models are affordable only by wealthy people, but quickly fall in price as they go mainstream. Will the same thing happen with electric cars? Auto analysts in Europe and the UK certainly think so. According to a report by The Guardian, 2020 is poised to be the Year Of The Electric Car, at least on the eastern side of the Atlantic.
Part of it is down to regulations. Starting on January 1, 2020, automakers must meet strict new exhaust emission rules or face substantial fines. The upper limit is set at 95 grams of carbon dioxide for every kilometer of driving. Going over the limit triggers a fine of €95 for every gram per kilometer above the limit, multiplied by the total number of cars sold by the manufacturer. If the new rules had been in place in 2018, auto makers would have been hit by fines of more than €33 billion.
There is a special incentive for electric cars built into the regulations. Every car sold that emits less than 50 grams of carbon dioxide per kilometer gets double credit in the regulatory scheme. No wonder the companies are pedaling as fast as they can to get electric cars on the road.
Felipe Muñoz, of automotive consulting firm Jato Dynamics, says the automakers will still sell lots of conventional cars and use the profits to pay the fines. They really have little choice. “It is very difficult for carmakers to change manufacturing infrastructure in such a short period of time,” he says. “A lot of action has been postponed until [the carmakers] need to,”adds Julia Poliscanova, the clean vehicles director at Transport & Environment. “What they’re planning to produce is more or less what they need to hit their CO2 targets.”
IHS Markit predicts the number of electric car models available to European buyers will jump from under 100 currently, up to 175 by the end of 2020, according to The Guardian. That number is expected to grow to 330 models by 2025. Bloomberg New Energy Finance sees the market for electric cars in the UK growing from 80,000 this year to over 130,000 next year. LMC Automotive suggests 540,000 electric cars will be sold in the EU in 2020, more than 200,000 higher than in 2019.
In 2020, the principal new electric car offerings coming to market include the Volkswagen ID.3 in its various configurations starting sometime this summer. It will be joined by the MINI EV, the Vauxhall Corsa-e, and the all new Fiat 500 electric designed from the ground up to be an EV instead of a converted conventional car. Coming in 2021 will be the German-built Tesla Model Y and the Ford Mustang Mach-E electric SUV.
Rising interest in electric cars is also putting upward pressure on used EV prices. Tom Leathes, CEO of Motorway, a UK used car sales platform, says the market for used EVs is growing “extremely fast. We expect this segment to grow year on year for at least another 10 years as electric’s share of the new car market continues to grow exponentially,” he tells The Guardian.
To get an idea where the electric car market is headed, just think of what happened with microwave ovens, cell phones, and flat screen TVs. Hold on to your hats. Things are about to get interesting.