Global production of battery EVs will grow to 14.8 million units by 2025
The electric vehicles revolution is undeniably underway. As the energy industry a few ago, the automotive sector is now experiencing a phase of change pushed by increasing government incentives and society’s growing concern towards the protection of our environment.
Yesterday alternative source of energies such as wind and solar power were the focus of this change; today is the turn of electric vehicles (EV)
Technology advances are rapidly reducing the cost of vehicles and government regulations limiting the level of emissions are making more and more appealing to this new form of transportation to customers.
As a result, the number of EVs sold every year is growing exponentially – from the 50,000 units of 2012 to the almost 3 million in 2017.
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40% of new cars sold will be EV
A study of the McKinsey Center projects that in 2030 nearly 40% of the new cars sold in China, US and EU will be some kind of electric vehicle and battery-only vehicles will represent one-fifth of them.
This figure could be higher but, ultimately the widespread of electric vehicles will be influenced by a variety of different factors such government regulation, battery cost and the construction servicing infrastructures needed to support this kind of cars.
The strategy and approach carried forward by the major players in the automotive industry as well as consumer preferences will also play an important part in this process.
Government’s Incentives and Regulations
Many countries all over the world are embracing the same strategy when it comes to electric vehicles.
They are slowly banning cars that produce emissions, lowering the legal standards of emissions allowed in the atmosphere and providing subsidies to consumers who are thinking to switch to electric vehicles.
This approach seems to be paying off and generating a strong demand for EV, making the development and production of these vehicles more interesting for car makers.
The Netherlands is an interesting example in this sense: in this northern Europe country, the government is planning to stop the selling of conventional car by 2035 and consumers are already benefiting by an exception of road taxes and registration fees.
Other countries are still very active on this front.
China, for example, is putting a number of legislations in place aiming to bring on the road more than 5 millions new electric vehicles by 2020.
The increase of Batteries Production
The growing demand for electric vehicles and the encouraging figures have prompted car makers into investing more in the development of these technologies and in new important infostructures (Tesla famous Giga-factory is an example of this) to cater for this growing need.
As a result of this, the cost of batteries has dramatically dropped over the course of the years while their efficiency has also rapidly increased.
In battery terms, in 2010 you needed $1000 to purchase a kilowatt hr (kHr), today the price has dropped to 227 per kWh, an incredible 77% decrease.
This is indeed great news for consumers who are become attracted to EVs.
A study from Mckinsey shows how that the global production of battery EVs will grow from the 500,000 units in 2010 to 14.8 million units by 2025.
Infrastructures for electric vehicles
The lack of infrastructure to support electric vehicles on the road are probably one the most significant problem at the moment for the widespread of electric vehicles.
Currently, there are only 17,000 electric stations in the US, a small number if compared to the 150,000 conventional gas station.
Yes, consumers can also charge their vehicles at home, but this issue still generate insecurity in customers interested in buying and EVs
Lucky governments have significant plans in this sense and have pledged to build more and more facilities for electric vehicles over the course of coming years, and considerable investments are also coming from the automotive industries.
Volkswagen, for example, is planning to invest USD 800,000 million in EV infrastructure from now till 2028.