Electric Cars Reach a Tipping Point

Say goodbye to gasoline.  The world's slow drift toward electric cars is about to enter full flood.

China, one-third of the world's car market, is working on a timetable to end sales of fossil-fuel-based vehicles, the country's vice minister of industry and information technology, Xin Guobin, told an industry forum in Tianjin on Saturday.  That would probably see the country join Norway, France, and the U.K. in switching to a wholly electric fleet within the lifetime of most current drivers. 

The announcement is important because the most influential players in the global auto market have always been not companies, but governments.  Diesel cars make up about half of the market in the European Union and less than a percentage point in the U.S., largely because of different fuel-taxation and emissions regimes.  Carburetors have been regulated out of most developed markets because fuel injection -- originally a more costly technology -- results in less tailpipe pollution.

I Sing the Battery Electric
Almost 80 percent of the global auto market is pushing toward phase-out of petroleum cars and adoption of electric vehicles.
...
India, due to overtake Germany and then Japan as the world's third-biggest auto market by 2020, is on a similar path.  Prime Minister Narendra Modi's think-tank Niti Aayog aims to get electric vehicles to 44 percent of the fleet by 2030, and is aggressively favoring them with tax rates 31 percentage points below those on hybrids and internal-combustion-engine cars under its new harmonized GST sales tax.  

France and the U.K., the world's sixth- and seventh-biggest markets, are planning to phase out sales of non-electric cars by 2040, while tiny Norway aims to reach that line 10 years earlier. Neither of those targets looks especially ambitious, given the rapid drop in battery costs:  In the U.S. and EU, electric cars will reach price parity with conventional vehicles in terms of purchase and running costs around the mid-2020s, according to BNEF.  The International Energy Agency believes the use of oil in passenger cars has already more or less peaked, with just 7 percent of demand growth by 2040 coming from the sector.

Road Revolution
Electric vehicle sales will overtake internal combustion engines within just over 20 years

The pattern will accelerate as major automakers dedicate more of their research and development budgets -- and, subsequently, lobbying funds -- to the EV transition.  Until the first Tesla Inc. Roadster went on sale just nine years ago, Mitsubishi Motors Corp. was the only major car company to take the prospect of fully electric vehicles seriously.  Now, every large automaker is working on battery-powered cars, with even longstanding skeptics ... announcing plans in recent weeks.

For all the eye-catching symbolism of a ban, it's unlikely that fossil fuel will soon be illegal on the roads.  Gasoline and diesel cars will still be sold in 2040, and probably 2050 and 2100 as well.  But with an increasing cost disadvantage and growing infrastructure issues, as gas stations close or go electric, internal-combustion engines will be sold only to enthusiasts -- like high-performance sports cars, kit cars, and vintage cars are today.  

The conventional car isn't quite dead yet -- but its years are numbered.

Read more at Electric Cars Reach a Tipping Point