NEW YORK (BLOOMBERG) – Until recently, car companies not named Tesla had a general stance on electric vehicles (EVs): We will start making them en masse, when people start buying them en masse.
The late Fiat-Chrysler chief executive Sergio Marchionne went so far as to implore drivers not to buy his company’s seminal electric Fiat. The unit economics were so poor, he reasoned in 2014, that he lost money on every sale (US$14,000 by Mr Marchionne’s maths).
Well, people are buying EVs now, partly because the climate is simmering closer to a boil and partly because the auto industry is finally making appealing battery-powered machines in volume.
Ultimately, the whither and why is less important than the what.
Drivers around the world will buy about 5.6 million electric passenger vehicles this year, according to a new report from BloombergNEF (BNEF) released in concert with the COP26 United Nations Climate Change Conference.
That is almost double the number purchased last year and, more importantly, it represents almost 8per cent of all vehicle sales.
“We are seeing some more organic demand for EVs,” said Ms Aleksandra O’Donovan, one of the BNEF analysts who authored the report.
Among the factors affecting this rise is availability. “One, the wider choice of electric vehicles now available to customers and, even more importantly, vehicles addressing those sought-after segments like the sport utility vehicles,” she added.
Also, EV sales are 20per cent or more of total vehicle sales for several European automakers, including Volvo and Daimler. And there are more than 500 models of EVs and fuel-cell vehicles available for sale today. Just six years ago, that figure was under 100.
Charging often has been cited as the reason why adoption was not happening more quickly. But the narrative around the dearth of public charging infrastructure creating a bottleneck to EV adoption also is set to change, as consumers more and more are taking matters into their own hands.
Garages and carparks will see some 2.1 million vehicle chargers installed this year, according to the BNEF report, a 63per cent increase over the number of private plugs at the start of the year.
Meanwhile, electric motors are being put to work, in trucks, buses and tractors. BNEF expects commercial buyers to purchase 150,000 electric vehicles this year, also nearly double last year’s tally.
Stretching how far these machines can travel between charges – plus predictable drive cycles and relatively low maintenance costs – increasingly tilt the economics in favour of things like electric mail trucks and battery-powered flower delivery vans.
Ms O’Donovan’s cautions there is still work to be done to get road transport on a path to a net-zero fleet by 2050.
“Sales of combustion vehicles need to essentially stop around 2035,” she said. “Automakers accounting for only 19per cent of the global passenger vehicle market have stated their intentions to stop selling vehicles with internal combustion engines by then.”
Indeed, it will be years before EVs outsell their fossil fuel-powered siblings. But change, as they say, happens very slowly and then all at once. And it is no longer happening slowly.