Until this winter, the transition from good-old-gasoline cars to cutting-edge electric vehicles (EVs) felt like a distant, probably leisurely affair. To many in Midcoast Maine, it still does. And why not? You don’t see many EVs around and nobody seems to be trying very hard to sell them to Mainers. EVs still accounted for barely over 2% light-vehicle sales last year for the entire US.
But the calm is deceptive. Change is coming and it’s coming fast, for two very good reasons. First, carmakers of all nationalities, sizes and shapes are determined to make it so. Tightening mileage and carbon-emission standards combined with fast-approaching outright bans on gasoline and diesel car sales – including in California – give them little choice. And second, these companies are starting to make EVs people want to buy, on the basis of performance, price and prestige.
In fact, there’s every likelihood that the transition to EVs will happen faster than even the EV optimists imagined a year ago. General Motors’ aim to go all-electric in its light vehicle sales by 2035, announced in early January to gasps of amazement, looks tame just six weeks later. Since then, Ford has come out with plans to go all-electric in Europe by 2030 and has nearly doubled its EV-related spending worldwide to $22 billion by 2025. Volkswagen this month doubled its 2030 EV sales targets to 70% for Europe and 50% in the US and China. And Volvo just proclaimed it will go all-electric everywhere by 2030.
This rapid acceleration didn’t come out of nowhere. For EVs, 2020 was a game-changer. In Europe (UK included), preliminary estimates show 2020 EV sales up by 137% from 2019, even as the total market shrank by 20% amid covid closures, leaving EVs with over 10% of all car sales. Momentum built through the year and, by December, Europe’s year-on-year increase hit 250% and the EV share of all passenger vehicle sales exceeded 20%, according to website EV-volumes.
In the US, 2021 could well be the EV breakthrough year. In February, EV sales were up 34% year-on-year in this country, while conventional car sales fell 5.4%, according to estimates from Morgan Stanley. Prognosticators in the EV specialty press are forecasting jumps as high as 70% in US EV sales for 2021 as a whole. Of course, they could be wrong. But big misses in EV forecasting have almost all been on the downside lately, expecting too few sales, not too many.
For Mainers, it’s notable that the big gainer in EV sales so far this year has been Ford’s Mustang Mach-E crossover, more than half of them with the all-drive feature that has helped make Subarus so ubiquitous in our wintry state.
Automakers see no alternative to EVs. A major 2020 tightening in European Union carbon-emission caps – akin to the US tailpipe emission standards President Biden looks set to tighten up again – provided big impetus for last year’s surge in European EV sales. All-electric carmaker Tesla earned over $1.5 billion last year selling emission credits to automakers worldwide who exceeded such caps. Since the legacy automakers have given up on trying to meet the regulations by selling more fuel-efficient gasoline cars, EVs are the only way to avoid having to buy ever-more of the emission credits that have done so much to make Tesla profitable.
Reinforcing this turn to EVs is the fact that countries and cities worldwide, plus individual US states, are increasingly adopting outright bans on diesel and gasoline passenger vehicle sales. Most notably, California Gov. Gavin Newsom last September issued an executive order “requiring sales of all new passenger vehicles to be zero-emission by 2035.” California and other states that follow its emission rules – frequently including Maine, although not yet for the gasoline vehicle ban -- account for roughly 40% of all US auto sales. It’s even possible that Biden may adopt California’s rules at the federal level, according to press reports.
Still, even if automakers are in a rush, will consumer tastes change that fast? A look back 100 years to the transition from horses to automobiles suggests radical transport change can come in the span of a single decade. In 1907, only 140,300 cars were registered in the entire US, according to Scientific American. By 1917, the number of registered cars had multiplied 33 times to almost 5 million.
Fast-forward to 2020. US sales of EVs totaled just 345,300, out of overall passenger vehicle sales of 14.5 million. Multiplying that 345,000 by 33, to match the 1907-17 surge, would push EV sales up to nearly 11.4 million by 2030. This is not a scientific forecast. It’s just an anecdotal demonstration of what’s possible. Looking ahead, though, it’s easy to imagine how momentum behind EVs may build in the 2030s, and gasoline and diesel vehicle sales collapse.
What factors will people consider in 2030 as they think about which new car to buy if well over half of new-car sales are electric? Will they worry about being able to get a decent price for a used gasoline car? How about replacement parts? Certainly, automakers won’t be designing sexy new models of the gasoline vehicles they are phasing out. If you think about it, who’ll want to be the last person on their block to buy a gasoline car?