Bloomberg Says US Has Hit Electric Car Tipping Point
Recently, Consumer Reports found more and more Americans are considering buying or leasing an electric car. In fact, in its latest survey, 15% of licensed drivers who responded said their very next car would be an EV. Now Bloomberg (paywall) is telling its subscribers that electric cars have passed a critical tipping point in the US and that a quarter of all new cars sold in America will be electric by 2025, several years earlier than expected.
The S Curve
In the tech world, people like to talk about the S Curve, a graphical (and somewhat mythical) symbol that purports to predict when new technology will go mainstream. In theory, once a new, new thing hits 5% market penetration, the rate of acceptance goes up exponentially before tailing off at the end. Think of the smartphone. At first, people thought it was a fad, then everyone had to have one. Today, there are a few holdouts who are rocking flip phones, but they are by far the minority.
CBS News reports that the United States is the most recent addition to a growing list of nations where fully electric cars make up 5% of new vehicle sales, a threshold that opens the gate to mass adoption, based on the latest findings from Bloomberg. During the last 6 months, the US moved past that tipping point, following 18 other countries. If prior trends continue, a quarter of new car sales could be electric by the end of 2025, Bloomberg predicts.
When it comes to electric cars, 5% seems to be the magic number at which the early adopters are joined by most of the rest of a country’s population. Bloomberg found the scenario had played out in Norway after its first 5% quarter in 2013, with China following suit in 2018 and then South Korea last year. Canada, Australia, and Spain are among the other major car markets nearing the tipping point this year.
Every country that has crossed the mark has a program of federal incentives and pollution rules in place. That goes for the US too, with the White House last year calling for EVs to make up half of new cars by 2030, including hybrids. The US should hit that target several years ahead of schedule, Bloomberg says.
Global efforts to get rid of the internal combustion engine have weakened the historically tight relationship between GDP growth rates and demand for crude oil, Ed Morse, Citigroup’s global head of commodity research, tells CBS. “We’re quite confident in our view that China has peaked in terms of diesel demand, and is peaking in terms of gas demand,” Morse told CBS MoneyWatch last week, citing China’s high proportion of electric cars or hybrids. The world’s appetite for oil will peak by the end of the decade, he added.
Many A Slip Twixt The Cup And The Lip
All predictions are like weather forecasts — advisory at best. Some people think local weather forecasts would be improved if windows were included in meteorologists’ work spaces so they could see what’s going on right outside.
The interest in electric cars in the US is being enhanced by high gasoline prices. If they go down as quickly as they went up, the demand for electric cars may moderate. Supply issues are also a challenge for manufacturers who are struggling to find enough battery cells, computer chips, and other critical components to meet the demand for electric cars. Dealers aren’t helping by slapping exorbitant markups on cars that are in high demand but in short supply.
America sill needs more electric car chargers to overcome the range anxiety fears many drivers have, and the fossil fuel industry is still using its muscle to sow fear, uncertainty, and doubt among potential EV buyers. But despite all that, America seems to be ready to embrace electric cars and trucks, thanks in large part to Ford, GM, and Dodge racing to bring battery-electric trucks and SUVs to market — vehicles that buyers of conventional cars and trucks crave.
The S Curve is not a law of physics like Einstein’s Theory of Relativity. It’s a device that may suggest when a new technology will gain widespread acceptance, but there are still lots of things that can go wrong on the way to the EV Revolution. Many of you don’t like to talk about politics, but if the reactionaries wrest control of the both houses of Congress in November, the impetus for clean transportation policies at the national level may be blunted. And battery supplies may not come close to matching the demand as quickly as hoped.
Whether the tipping point for electric cars happens as quickly as Bloomberg thinks it will is largely irrelevant. The momentum is building, the EV revolution is coming, and nothing will delay it for long.
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