One of the most interesting and most challenging things in my career in cleantech media in the past decade has been communicating technology transitions. It is simply so difficult for us humans to deeply comprehend (or “digest”) the arc of the trends as they are occurring. Even a rapid market transition seems like it is going very slowly (“taking forever”) until it happens all of a sudden.
It is sort of like an approaching train. If you watch from far away, it seems like the train is coming along so slowly and taking so long, but once the train is near, it zooms past you super quickly.
I have written or given presentations about the transition to electric vehicles many times, but I never quite feel satisfied with how well I can communicate it. In January, I showed that leading countries have been moving from 2–3% EV market share to 10–50% EV market share pretty quickly. But this point, even with graph included, seemed like it was still lacking and not conveying the message well enough.
So, recently, I decided to create another graph, one with a bit less data (no actual data) based on the most critical part of the transition or trend. The core trend is in the cost of EV batteries. That is what has made the upfront cost of electric cars more expensive than fossil fuel cars historically, and also what has been changing fast, enabling hyper-competitive electric vehicles like the Tesla Model 3 and Tesla Model Y (and, presumably, the coming Volkswagen ID.3 and some other models). If you look at total cost of ownership, the story gets even better, especially for the Tesla Model 3 and Model Y.
So, here’s a graph showing the battery cost trend (with no actual data underlying it, but more or less representative of what’s happening — see the BloombergNEF presentation at the end of this article) as well as the cost trend of battery electric cars and gasoline-powered cars (again, with no actual data underlying it, but see our pieces on Tesla Model 3 TCO, Tesla Model Y TCO, and VW ID.3 TCO):
The point, of course, is that as we move beyond the crossover point we’re in right now, it’s not going to make much sense to buy a gasoline-powered car. In fact, because cars last for a long time and the first owner typically sells his or her car eventually to recoup a large portion of the initial cost, it already doesn’t make much sense to buy a gasoline-powered car.
Where the fake graph above leads in reality is perhaps best explained in Maarten Vinkhuyzen’s article “The Osborne Effect on the Auto Industry,” which is already starting to get backed up by real data. See: “Capital One: Value of Luxury Gas Cars Getting Slammed by Tesla Model 3.” I highly recommend reading both.
For more data-backed graphs and a longer presentation on this general topic, I highly recommend this video of BloombergNEF’s Colin Mckerracher:
Here are a few more related charts and graphs shared in Kyle Field’s article about his presentation in February:
Screen capture from BloombergNEF presentation.
Screen capture from BloombergNEF presentation.
And here’s David Havasi and me talking about this trend and some real-world experiences and products that have resulted from it:
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