According to a recent study by BloombergNEF, the global ascendancy of battery electric vehicles (BEVs) has reached its tipping point. Though EV acceptability differs from nation to nation, a trend has evolved.
The survey points out that 19 countries have made the EV pivot. It is very important to note that everything changes once 5% of new-car sales switch to electric-only vehicles. Similar to the smartphone, the EV will soon become a common thing.
Marching Towards Glory
The US is the latest country to surpass what has come to be a crucial EV tipping point: 5% of new car sales made up entirely of electric vehicles. This level denotes the beginning of widespread EV use, according to Bloomberg. a new technology enters the almost vertical phase of the “S” curve adoption at 5% penetration as pointed out byTony Seba.
The rest of society will follow once the obstacles are resolved for the early adopters (in this example, range, cost, charging infrastructure, limited supply, and choice).
Bloomberg confirms that The adoption curve followed by South Korea starting in 2021 ends up looking a lot like the one taken by China in 2018, which is similar to Norway after its first 5% quarter in 2013. The next major car markets approaching the tipping point this year include Canada, Australia, and Spain
Global Powers Favour BEVs
The majority of the US and China skipped plug-in hybrids in favour of all-electric automobiles or battery electric vehicles(BEVs). Every nation that passed the EV tipping point did so as a result of a federal incentive and pollution control policy
The Biden administration in the US issued an executive order last year mandating that EVs make up 50% of all new automobiles by 2030. (including plug-in hybrids). The tipping-point study predicts that it will surpass that objective with time to spare.
Tesla, Volkswagen, and BYD have all announced ever-increasing production targets, indicating the haste with which automakers are bringing their electric vehicles to market. Though In the upcoming year, just these three automakers anticipate producing nearly 4 million BEVs. But even the industry’s laggards, like BMW, want to produce 50% BEVs by 2030, pointing in the direction of continuous growth of the industry.
It turns out that automakers too experience tipping points. Things like a retooling of factories and reorganization of supply chains are necessary when switching to EV manufacturing. Also, the entire vehicle must be redesigned with electrification in mind to realize the greatest cost savings. In Europe, the share triples in less than two years once 10% of an automaker’s quarterly sales switch to electric.
Is The Global Switch to BEVs Inevitable?
Up to this point, the US, China, and Europe have accounted for 90% of global EV sales. This means that the tipping point hasn’t been reached in the countries that account for nearly a third of yearly global auto sales. None of the nations in Southeast Asia, Africa, or Latin America has achieved the transition. It’s doubtful whether global miners will be able to meet the demand for battery metals if they do.
However, according to the International Energy Agency, the number of electric car sales worldwide increased thrice during the previous two years. Electric vehicles accounted for the entire net increase in global auto sales in 2021, and BloombergNEF predictions indicate that this trend will last indefinitely.
The market for fossil fuel vehicles appears to have peaked in 2017. There doesn’t seem to be a method for them to return. Indeed, it is certain to happen.
Now let us look into another study that is aimed at identifying the tipping points for widespread EV adoption.
Study Commissioned By Castrol
Oil giant Castrol commissioned a study to research the tipping point of EVs.The study examined the opinions of almost 10,000 consumers, fleet managers, and industry experts in eight of the world’s most significant EV markets. The study concluded that achieving a $36,000 price point, a 31-minute charge time, and a 469km range would significantly increase the global market for EVs.
According to their estimate, reaching these “tipping points” might result in annual EV sales of $376 billion across those eight markets by 2025.
“Even in these uncertain times, the automotive industry is rising to the critical challenges highlighted in our research. EVs that meet at least one of the tipping points for price, charge time, or range is already on the market. With the industry’s inspiring response to the coronavirus crisis demonstrating what we can achieve, and EV technology constantly improving, the challenge now will be to accelerate evolution as quickly as possible to contribute to one of the most important critical challenges of all: decarbonizing our economy.”
-MANDHIR SINGH Chief executive officer, Castrol
The Promising Markets
The research covers eight of the world’s largest, most promising, and most developed EV markets: China, France, Germany, India, Japan, Norway, the United Kingdom, and the United States.
Consumers believe that the majority of new cars purchased won’t be electric until 2030, despite the fact that most consumers testify that they would consider buying an EV themselves by 2024. The survey also shows that while there is a favorable outlook for EV adoption globally, some economies are more progressive than others. Indian consumers said they would think about purchasing an EV as early as 2022, with Chinese consumers following closely behind a year later.
The Tipping Points
According to the Castrol research, mainstream acceptance is the stage at which 50% or more of people would think about buying an electric vehicle. The companies that can overcome these five major obstacles would be in a strong position to gain market share.
#1. The $36,000 Challenge
According to the analysis, the “major challenge” for consumers is the cost of an EV. The price at which widespread acceptance may be attained is $36,000, which is equal to the typical cost of an American automobile. The current selection of EVs on the market, according to nearly two-thirds of consumers, is out of their price range.
#2. The 31 Minute Challenge
The study indicates that the second-most significant “critical challenge” for consumers is how long it takes to charge a battery. The charge time at which widespread adoption occurs is 31 minutes, or about as long as a typical lunch break. Even though this takes a lot longer than the typical internal combustion engine refuels, the average rest stop break is only nine minutes long.
#3. The 469 KM Challenge In Range
The third most significant “critical challenge” for consumers was vehicle range. The research indicates that for EVs to become widely used, their range needs to be increased to approximately 469 kilometres, which is the distance between London and Paris. Equivalent internal combustion engine performance ranges from 500 to 1,000 kilometers.
#4. The Global Charge Point Challenge
The fourth-ranked significant challenge, according to the consumer poll, is charging infrastructure. 70% of consumers think that when charging stations are as widely accessible as gas stations, the majority of new automobiles will be electric.
#5. Choosing a vehicle
For consumers, choosing a car posed the least significant challenge, but for fleet managers, it was the second-most crucial deciding factor. If there was an electric vehicle that could replace their favorite ICE vehicle, more than half of customers and fleet managers stated they would think about switching.