Bloomberg Declares That The Tipping Point Has Been Reached!
A recent report by BloombergNEF declares that the tipping point for battery electric vehicle (BEV) ascendency has been reached globally. Although acceptance of EVs varies from country to country, a pattern has emerged. “Once 5% of new-car sales go fully electric, everything changes — according to a Bloomberg analysis of the 19 countries that have made the EV pivot.”
Just like the smartphone, soon the EV will be normal. Some have even compared driving an ICE to smoking — it will not just be unusual, it will be antisocial and detrimental to your health.
“The US is the latest country to pass what’s become a critical EV tipping point: 5% of new car sales powered only by electricity. This threshold signals the start of mass EV adoption,” Bloomberg writes. At 5% penetration, a new technology starts the almost vertical part of the “S” curve adoption, as popularized by Tony Seba.
Once the issues are sorted for the early adopters (in this case — range, cost, charging infrastructure, limited supply and choice), the rest of society will follow. Related: 15 European Countries Have 15%+ Plugin Vehicle Sales (New Car Sales).
“Thus the adoption curve followed by South Korea starting in 2021 ends up looking a lot like the one taken by China in 2018, which is similar to Norway after its first 5% quarter in 2013. The next major car markets approaching the tipping point this year include Canada, Australia, and Spain,” Bloomberg adds.
“The US and China mostly skipped plug-in hybrids and went straight to fully-electric vehicles. … Behind every country that crossed an EV tipping point is a program of federal incentives and pollution standards. In the US, the Biden administration last year issued an executive order calling for EVs to make up half of new vehicles by 2030 (including plug-in hybrids). According to the tipping-point analysis, it should beat that goal with several years to spare.”
Carmakers are rushing to get their electric vehicles to market, with Tesla, Volkswagen and BYD announcing ever increasing production goals. These three carmakers alone expect to produce over 4 million BEVs in the next 12 months. Even laggards like BMW are aiming for 50% of their production to be BEVs by 2030.
“It turns out, automakers have tipping points, too. Factories must be retooled and supply chains reconfigured. To achieve the most cost savings, the entire vehicle must be redesigned with electrification in mind. In Europe, once 10% of an automaker’s quarterly sales go electric, the share triples in less than two years.”
So, BloombergNEF asks the question: Is the world’s transition to BEVs inevitable?
“So far, 90% of the world’s EV sales have come from the US, China and Europe. That means countries responsible for about a third of global annual auto sales haven’t passed the tipping point. None of the countries in Latin America, Africa, or Southeast Asia has made the jump. If they do, it’s uncertain whether global miners will be able to keep up with demand for battery metals.
“Still, global sales of electric vehicles tripled in the last two years, according to the International Energy Agency. All of the net growth in global car sales in 2021 came from electric cars, and that’s a trend that BloombergNEF forecasts suggest will continue indefinitely.”
Fossil fuel vehicle sales seem to have peaked in 2017. There doesn’t appear to be any way that they can come back. Yes, Bloomberg, it is inevitable.
Featured photo by Majella Waterworth
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