No turning back for electric vehicles

This decade will see major shifts in our transportation system, the most apparent of which would be in the kind of cars we will see on the road. For many developed economies, a point of no return is forecast to happen when those buying a new car will choose an electric vehicle (EV) over one that is powered by gasoline or diesel.

For many years now, most vehicle manufacturers have produced small numbers of EVs, and while sales continued to constitute a small percentage of their total vehicle production, they have never stopped offering new models, even last year in the midst of the pandemic.

In deciding to buy an EV, consumers in the last decade have still been most concerned about the higher price tag and the inconvenience of charging vehicle batteries. Technology advances in recent years, though, are addressing these concerns.

The price of a new EV is now dropping fast, thanks to the much lower price of lithium-ion battery packs that now power EVs. China, for example, is now producing competitively priced batteries for use in electric buses, which is expected to spill over to the private electric cars segment.

Several noteworthy analysts are already predicting that small electric cars will reach price parity with their counterpart internal combustion powered vehicles within the next five years – and that’s going to happen without government subsidies and tax incentives.

Charging facilities for an EV are expected to be more widely available as governments, notably those that have set firm plans to shift fully to selling EVs in the next decade, introduce systems that will encourage the private sector to lay out a denser network of charging stations. This is expected to significantly reduce the “range anxiety” of consumers who fear that they may not be able to reach their destinations on a single charge.

Other factors

The other big push for EVs is with manufacturers. Swedish vehicle maker Volvo just announced that it would make only electric cars by 2030. Earlier, American car manufacturer General Motors announced an all-electric vehicle – including trucks and SUVs – line-up by 2035, while Ford would sell only EVs in Europe by 2030.

New EV manufacturers, though, are posing a bigger challenge. China’s BYD sold more than 130,000 vehicles running on electricity last year, but the introduction of the budget Wuling Hong Guang Mini EV in China’s domestic market last July has fared even better, with sales already reaching 160,000 in its seven-month run.

The Wuling EV model, manufactured by a joint venture company of two Chinese companies and General Motors, has been well received by Chinese city dwellers, mainly because of its unbelievably low price, ranging from $4,450 to $6,000.

A Wuling EV costs just a quarter of Tesla’s cheapest Model 3, which was dislodged as the top-selling model in China by more than 15,000 units last January.

The tiny Wuling four-seat car is ideal for start-up Chinese families who have just one or two children, but are looking for a better mobility vehicle at a price that is truly affordable. It’s a step up for many who have only owned scooters.

EV manufacturers are also getting a lot of love from billionaires across the globe. Warren Buffet’s Berkshire Hathaway, for example, holds a huge 8.2 percent stake in BYD, whose shares in the last 12 months has risen by more than 300 percent.

Another billionaire investor, India’s Rakesh Jhunjhunwala, is backing up Indian automaker Tata Motors to develop the EV market for the world’s second largest population in the world. India wants sales of EVs by 2030 increased to 70 percent for commercial cars, 30 percent for private cars, 40 percent for buses, and 80 percent for two- and three-wheelers.

Public buses and trucks

The EV market is not confined to private cars, though, even as this sector accounts for sizeable chunk of carbon emissions and the climate crisis. Public transportation had adapted faster and earlier to electricity as a fuel through trains.

More recently, the demand for new electric public buses have noticeably ramped up – and China’s BYD is once again leading the pack of suppliers. A recent study forecasts sales of new e-buses and e-trucks to hit 50 percent of the total market by the end of the decade.

BYD expanded its e-bus network in China by 44 percent last year despite the mobility disruptions posed by the pandemic. Its manufacturing plants in Hungary and France are expanding to fill large orders received last year and the prospects of more from Europe in the coming years.

The Chinese company is now well poised to supply the requirements of governments that have started phasing out diesel-fueled buses. E-bus systems have shown great adaptability in densely populated cities, where travel distances are shorter, but well defined to allow the construction of just enough charging stations.

Environment considerations

Electric kick scooters, both three-wheeled and two-wheeled, have also been gaining popularity with individuals and groups advocating a shift to environment-friendly mobility options, especially in cities where transportation-induced pollution is high.

After finally hurdling technology limitations regarding battery and charging issues, EVs can slowly, but strongly grow to replace internal combustion engines that run on fossil fuels, an innovation that had been popular in the world for a century now.

Most buyers of e-cars are happy about how quiet and quick-starting their new vehicles are. The cost of charging has, likewise, given them immense savings over the longer term. More importantly, they say they are proud advocates of a movement to save the world from climate change.

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