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You don’t have to look far to see signs that electric vehicles are the future. A recent poll conducted by Protocol in conjunction with Harris Poll highlights this perfectly. The poll aimed to determine how many people would choose an EV as their next vehicle. The results were eye-opening and yet not altogether surprising. Over 51% of those surveyed said they’d be willing to go the EV route in the future. And most of those were millennials. Then there’s the fact that EV sales have skyrocketed over the last few years.
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Consider this. In 2016, EVs made up a mere 0.2% of new car sales globally. This number has jumped by over 4000% in just five years to the point that in 2021, 8.6% of new car sales were EVs, while traditional car sales dropped by 11% in a similar period. In 2022, electric vehicle sales accounted for 6.6 million units, up from 2.2 million units in 2019. All this is welcome news.
After all, on the road to meeting the 2050 net-zero goals, EVs are going to play an increasingly pivotal role. Especially when one considers the transportation sector’s carbon footprint. Some estimates suggest that this sector accounts for as much as 24% of global CO2 emissions. That’s why the world needs to transition to EVs – the greener alternative. And now, there is a greater chance people will make this choice because EVs are also more economical than ever before.
Transportation is at the heart of daily life and our supply chains. It’s fundamental to the growth of the economy. In the US alone, this sector is estimated to employ more than 10 million people, and in 2015 was responsible for over 8% of the GDP. And Europe is no better. Following a slight drop in emissions due to a decrease in transportation during the COVID-19 pandemic, emissions across Europe have since risen. In 2021 greenhouse gas emissions from transport in Europe increased by over 7%. Transportation remains one of the dirtiest sectors. A sector that’s ripe for intervention and decarbonization.
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What’s especially problematic is that much of this sector is still powered by polluting fossil fuels like petroleum. Typically on-road transportation (which includes cars and trucks) accounts for the greatest emissions, and in the US, this is the largest direct source of greenhouse gases. The same trend can be seen in Europe, where emissions are falling in almost all sectors except the transportation industry. Factors like this industry’s dependence on oil, as well as predicted population growth, make decarbonizing this sector so challenging.
What is especially worrying is that even though there are policies to reduce emissions, the transportation sector’s emissions are still projected to grow by as much as 20% by 2050. And even with the most stringent policy change, this sector won’t ever get to zero. It’s against this backdrop that EVs have risen to prominence.
EVs were once considered out of reach for many. In fact, there’s research that indicates that at least 63% of people believe an EV is beyond their budget. But as prices continue to drop, EVs are proving to be an attractive option. And to add to this, there’s the issue of rising gas prices. The EY Mobility Consumer Index found that 34% of those surveyed cited rising gas prices as well as gas penalties in the wake of the Russian invasion of Ukraine as the reason they’re considering an EV.
We’re also seeing how EVs are becoming more affordable as new players come to the table and more entry-level EVs are released. Companies like BYD Auto, which have overtaken Tesla as the world’s largest EV manufacturer, are now vying for their share of the Indian market.
BYD is already winning buyers with its attractive prices. Consider BYD’s latest release: a Seal Sedan, which feels like a Tesla Model 3 but is $8000 less than a Tesla! And because of this competition, manufacturers are slashing prices in China, the world’s biggest EV market. In fact, recently, hot on the heels of price cuts from Tesla, Mercedes-Benz announced that it is also reducing the price of its EVs in China.
There’s also a general shift in the industry where manufacturers are releasing more entry-level models. Chevrolet, Hyundai, and Nissan have all introduced EV models which are more affordable. Tesla CEO Elon Musk recently noted that Tesla is developing a vehicle that will sell at roughly half the price of the Model 3 and Model Y.
Incentivization is also adding to the appeal of EVs.There are more and more companies that are offering incentives to employees considering an EV. For example, earlier this year, Bank of America launched a program to provide its employees interested in leasing or purchasing an EV with financial support. Apex also offers EV incentives and has been doing so since 2015.
But these incentives aren’t just for those lucky enough to work at a Fortune 500 company. For example, in the U.S., there are now many incentive and rebate programs (thanks in part due to the Inflation Reduction Act) designed to make leasing and owning an EV affordable. This includes a Federal Tax Credit of between $2,500 and $7,500 for new car owners, as well as a range of other state grants and incentives.
More people than ever before are buying EVs. Some estimates suggest that EV sales are triple what they were just three years ago. Furthermore, a recent report from ARK predicts that EVs could account for at least 90% of the market share by 2027. And this demand isn’t likely to slow anytime soon.
After all, green, efficient EVs are becoming cheaper all the time. This is not only good for the economy but will have a positive environmental impact. And as EVs become the obvious choice so the need for EV charging stations will rise significantly.
EVs are a source of clean, sustainable transportation. Increasingly, they will play a central role in helping countries worldwide meet their net-zero goals by significantly reducing this sector’s emissions. And the good news is that there are already many regulatory frameworks and financial incentives to accelerate EV adoption.
Signs of the EV revolution can be seen all over the world, from the US and Europe to much of the Asia-Pacific. In India, for example, the government has prioritized the transition to EVs with its Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which is currently in its second phase. Even in Vietnam, the government plans to test a loan program, incentivizing the shift to EVs. In the European Union, EV tax benefits and purchase incentives are fundamental elements of economic and sustainability policies.
We’re in the fast lane now, and there’s no turning back. EVs are here to stay, and it’s time for all of us to prepare for this exciting new (automotive) chapter.