This is one of those topics that seems to come up more and more frequently. Maarten Vinkhuyzen was ahead of the curve (as usual) and wrote the article “The Osborne Effect On The Auto Industry” in February 2019. Here’s a key graphic from that excellent piece (which you are required to read if you haven’t yet):
There are three key elements of this. One is that growth of a disruptive technology is not linear. It is much faster than a normal person, or even a professional forecaster, typically presumes it will be in the early years of the disruption. The second is that, conversely, the decline of the outgoing technology is rapid as well, with the market collapsing like when you step on the edge of a little sand cliff on the beach and slip down rapidly. The third point, one that is almost always ignored, is that the transition period can also lead to an overall market drop/dent for a while.
The third point can be a bit confusing, and it’s related to the title of this article. It may seem that the growth of the new tech should rise perfectly to match the decline of the old tech, but that’s not how the world works (or how the other planets some of you plan to move to will work). Once the new, better, cheaper technology is in the eyesight of much of the population, people start to realize that there’s no point in getting the old technology. They may not be ready to get the new tech just yet — because of money, product delays, high availability and relatively low supply, or timing — but they most logically will presume that it’s not wise (or fun) to buy an outgoing product that can’t match the hot new thing. The mismatch between the consumer desire to get a new product and the ability of the industry to produce that new product as much as consumers want it leads to a big dent in the market. Or, on the flip side, lack of interest in the old product, while the producer is still wanting to sell it, leads to a market collapse of some scale.
This article I am writing right now was stimulated by a comment under an article I wrote yesterday. “I’d generally agree except with the stipulation that by 2030 it’ll be hard to sell a new ICE car,” the person wrote in response to another reader’s comment. This is the question. This is the big question. When we’re looking at 2030 and trying to forecast EV market share, or trying to push for some specific EV market share, the result isn’t just dependent on scaling up EV production. The market share result is also totally reliant on what the actual drop of sales of the old tech will be.
Without doubt, there are people today who are avoiding/foregoing fossil fuel vehicle purchases while waiting a bit longer to get an EV. But that will be happening more in 2023, and even much more in 2025, and sooooo much more in 2030. Scaling up battery production for the number of sales Tesla and other EV producers are aiming to sell by 2030 will be a challenge — more than a challenge. The producers need a lot of lithium, nickel, graphite, and other minerals, significantly more than I expect to be secured by 2030. But I think few people will be okay buying a gasoline-powered car at that time.
So, taking all of that into account, what do you expect the plugin vehicle (or fully electric vehicle) market share to be in the US in 2030? What about globally?
And, circling back to the title, when do fossil fuel car sales collapse?
My wild guess is that plugin vehicles will be at 70% in 2030 due in large part to consumers deciding that they are going to skip the outgoing ICE (internal combustion engine) tech. I expect fossil fuel car sales to start to really collapse in 2025–2026 in Europe and 2027–2028 in the USA. Though, it seems that is already beginning — the early stages of it. Inarguably, though, one way or another, it’s going to get messy by the end of the decade. Even 50% plugin vehicle share, as Biden’s team is targeting, is not a peaceful state of equilibrium as it may sound. It’s a point of hyperfast change and disruption. Be sure to put it on your Google Calendar now.