I’m sure you’ve heard that Elon Musk unveiled Tesla’s new electric car to much fanfare last week. People across the US, Canada and other countries stood in lines for hours to register their $1000 deposit for the Model 3 – which won’t be ready for two years!
Yes, Tesla has made it into the hearts of people around the world, as no car has for a long time. Orders were placed for an astounding 276,000 cars – more than halfway toward the goal of producing 500,000 cars a year.
Imagine a car manufacturer introducing a new model the way Elon Musk did:
"It’s very important to accelerate the transition to sustainable transport. This is really important for the future of the world." The crowd cheers!
Then he presents a slide show – not about the car, but about climate change – with graphs displaying rising carbon emissions and global temperatures.
Priced at $35,000 (before incentives), the Model S is Tesla’s first car that’s affordable for mainstream purchasers. Its features can’t be beat: a gorgeous car with an all-glass top; a 215-mile range; the ability to accelerate to 60 mph in under 6 seconds; and a 5-star safety rating.
In January, General Motors unveiled its Chevy Bolt, which also has a 200+ mile range, a $30,000 price tag and similar acceleration.
All the big automakers are investing heavily in the space. Audi, for example, has a goal of increasing EVs to 25% of US sales by about 2026 – underpinning "a lasting and sustainable strategic shift."
2020’s: The Decade of the EV
With gas prices so low, it may be hard to believe that EVs are about to make life even harder for petroleum producers. In the US, even sales of hybrids are way down.
But by the mid-2020s, EVs are expected to hit their stride, becoming cheaper than conventional cars in most countries (without subsidies).
With an average price under $22,000, they will reach 35% of global new car sales by 2040, says Bloomberg New Energy Finance.
They predict 41 million EVs will be sold in 2040, up from 462,000 in 2015. And this is true even if gas prices remain low.
It’s all about battery prices, which account for about a third of an EV’s cost. They are already 65% cheaper since 2010.
At the Paris Climate Summit, 13 US states and four countries signed onto the International Zero Emission Alliance, pledging that all new passenger vehicles sold will be zero emissions by 2050.
Enter The Koch Brothers
This year, they will launch a new "nonprofit" to spread a pro-petroleum message to the public. It will do "independent research," and use paid and earned media to get their points across, spending about $10 million a year, reports Huffington Post.
"The Kochs have invested heavily in a pugnacious defense of fossil fuel consumption. They’ve done this in the electricity sector, and as the debate shifts to transportation they’re behaving true to form," an energy analyst told Huffington Post.
"Electric vehicle adoption started slowly, but it certainly is going to follow an exponential growth trajectory," says Varun Sivaram, at the Council on Foreign Relations. "Once electric vehicle adoption hits a critical mass, I think it will take refiners, petroleum producers and automakers by surprise."
US gas consumption is already down because of more efficient cars, even as Americans are driving more, according to the US Energy Information Administration.
Vehicles account for 27% of US greenhouse gas emissions – the second largest single source after power plants.
While petroleum producers have a lot to lose, electrification of transportation is an enormous opportunity for utilities. 52% of power companies are already pursuing EV charging as a revenue stream, according to research.
Read our article, Tesla’s Next Goal: Transform How We Get Electricity.