The RISE of the ELECTRIC vehicle

The EV revolution would turn our economy upside down if it happened as swiftly as some predict. Until then, the changes will be more subtle.

Canadians are buying more electric vehicles every year, though the rate is still pretty minuscule. In the first quarter of 2017, there were a little more than 32,000 electric vehicles on the road, a small slice of the 24-million-plus registered motor vehicles.

But a steady decline in battery costs and new policies in Canada and around the world aimed at boosting EV adoption has made the electric engine an increasingly formidable competitor for the internal combustion engine (ICE).

To some, the EV is the world’s greatest hope in finally kicking our oil addiction. To others, it’s an overhyped gimmick needlessly mopping up government subsidies.

Either way, most projections suggest that, on a long enough timeline, EVs will begin to take market share from petroleum-based vehicles.

The International Energy Agency, an influential Paris-based energy consultancy, expects EVs to make up 33 per cent of the global vehicle fleet by 2040, and account for 54 per cent of new vehicle sales.

Of course, there are plenty of roadblocks, particularly in Canada where charging infrastructure remains too scarce to satisfy most would-be buyers, a problem made worse by a sprawling geography and relatively small population.

Most stations still take agonizingly long to fully charge a battery, while upfront costs for EVs remain well above petrol or diesel-based cars.

Furthermore, automakers don’t have the manufacturing capacity needed to mass-produce electric vehicles, though some are making exploratory investments.

Tesla Inc.’s plan to build its Gigafactory in the Nevada desert, where it hopes to churn out as many as 500,000 vehicles per year by the end of 2018, is widely viewed as a potential step change in lowering battery production costs.

But any rise in EVs will have impacts well beyond the automotive sector. There will be a surge in demand on an already overburdened electricity grid, and, at a certain level of adoption, EVs could threaten oil producers, already battered by global oversupply and a tepid outlook for demand.

The EV revolution, if it comes as swiftly as some believe, will overturn much of the modern economy as we know it, but the changes until then will likely be subtler.