2017 could be EV’s cru­cial year

In­dus­try, na­tions look to bol­ster plug-in mar­ket

Orlando Sentinel - - WALL STREET REPORT - By Peter Holley

Elec­tric ve­hi­cles no longer seem like a fu­tur­is­tic fever dream, but they re­main a rar­ity on most Amer­i­can city streets, ac­count­ing for less than one per­cent of the na­tion’s auto sales, ac­cord­ing to the au­to­mo­tive web­site Ed­munds.com.

Yet, when fu­ture auto his­to­ri­ans look back, they may pin­point 2017 as the year elec­tric ve­hi­cles went from a promis­ing pro­gres­sive fad to an in­dus­try­wide in­evitabil­ity.

The tip­ping point, ex­perts say, fol­lows three de­vel­op­ments, each rip­pling out­ward with eco­nomic and cul­tural con­se­quences.

China’s flex­ing: In ad­di­tion to set­ting ag­gres­sive pro­duc­tion quo­tas for EV’s, China plans to scrap in­ter­nal com­bus­tion en­gines en­tirely as soon as 2030. By tak­ing a lead role in the shift to plug-ins, the world’s largest auto mar­ket is forc­ing the rest of the in­ter­na­tional com­mu­nity to fol­low in its foot­steps.

The de­but of Tesla’s Model 3: The com­pany’s first mass-mar­ket ve­hi­cle has ush­ered in an era of ex­cite­ment about EV’s be­cause of the car’s slick de­sign and start­ing price of around $35,000.

Ma­jor au­tomak­ers an­nounce plans for an “al­l­elec­tric fu­ture.” Gen­eral Mo­tors fin­ished 2016 as the world’s third-largest au­tomaker, mean­ing its de­ci­sion to cre­ate 20 new elec­tric ve­hi­cles by 2023 is bound to have an im­pact on the global mar­ket­place.

“You re­ally do feel like this elec­tri­fi­ca­tion thing is sud­denly very real,” Jes­sica Cald­well, ex­ec­u­tive di­rec­tor of in­dus­try anal­y­sis at Ed­munds.com. “There’s a mo­men­tum we haven’t re­ally seen be­fore. It’s com­ing from other coun­tries around the world and from big au­tomak­ers, and that’s forc­ing ev­ery­one else to com­ply.”

The all-elec­tric fu­ture is still years away, ex­perts say. But as EV mo­men­tum builds, we’ve listed five ways in which EV adop­tion is ex­pected to play out:

Not so long ago, mi­nus­cule sales of EVs made it hard for big oil to take of elec­tric cars se­ri­ously. Now, thanks to grow­ing de­mand in Asia and Europe, ex­perts say, that’s be­gin­ning to change, even amid pre­dic­tions that oil de­mand will con­tinue grow­ing in the de­vel­op­ing world.

A Bar­clays’ anal­y­sis con­cluded that oil de­mand could be slashed by 3.5 mil­lion bar­rels per day world­wide in 2025. If elec­tric ve­hi­cle pen­e­tra­tion reaches 33 per­cent, oil de­mand could shrink by a whop­ping 9 mil­lion bar­rels per day by 2040, Bar­clays con­cluded.

Urg­ing cau­tion about the im­pact of EVs on the oil in­dus­try, John Eich­berger, ex­ec­u­tive di­rec­tor of the Fu­els In­sti­tute, said he doesn’t ex­pect to see sig­nif­i­cant changes in de­mand for an­other 15 years or so. “We don’t know how fast EV sales will pick up, but what we do know is that no mat­ter how fast they pick up, the in­ven­tory in the mar­ket will turn over more slowly, and this will de­lay the im­pact on liq­uid gal­lon de­mand,” he said.

Eich­berger noted that even op­ti­mistic sales growth es­ti­mates con­clude it will take un­til the 2030s for EV sales to reach as high as 16 per­cent of the na­tion’s mar­ket share.

Some ex­perts be­lieve elec­tric cars have sounded the death knell of the Amer­i­can gas sta­tion, but oth­ers aren’t so sure. Ear­lier this year, John Ab­bott, Shell Oil’s busi­ness di­rec­tor, re­vealed that the en­ergy giant is al­ready adapt­ing.

“We have a num­ber of coun­tries where we’re look­ing at hav­ing bat­tery charg­ing fa­cil­i­ties,” he told the Fi­nan­cial Times. “If you are sit­ting charg­ing your ve­hi­cle, you will want to have a cof­fee or some­thing to eat.”

Un­til charg­ing times drop dra­mat­i­cally and su­per­charg­ers be­come wide­spread, wait times for EV charg­ing at gas sta­tions could turn those sta­tions into “hos­pi­tal­ity-type venues,” ac­cord­ing to Guido Jouret, the ABB’s chief dig­i­tal of­fi­cer.

Depend­ing on how elec­tric­ity is pro­duced in your re­gion, plug-ins are from 30 per­cent to 80 per­cent lower in green­house gas emis­sions, ac­cord­ing to Gina Co­plon-Newfield, the di­rec­tor of the Sierra Club’s Elec­tric Ve­hi­cles Ini­tia­tive. If GM fol­lows through on its plan to launch a new fleet of elec­tric ve­hi­cles, Co­plonNew­field said, the re­duc­tions in car­bon emis­sions and the im­proved air qual­ity could be “hugely ben­e­fi­cial.”

“We’ve seen cus­tomers rave about cars like the Chevy Bolt and Volt,” she said.

If GM’s 2016 U.S. sales — more than 3 mil­lion ve­hi­cles — were con­verted to EV’s, the coun­try would ben­e­fit in the fol­low­ing ways, ac­cord­ing to an anal­y­sis pro­vided by the Sierra Club:

6.5 mil­lion tons, or 13 bil­lion pounds, of green­house gasses cut an­nu­ally.

35.6 mil­lion bar­rels of pe­tro­leum re­duced an­nu­ally, cre­at­ing less of a de­pen­dency on for­eign oil, fur­ther boost­ing de­mand on do­mes­tic elec­tric­ity and keep­ing oil money spent in-state.

164.5 mil­lion pounds of car­bon monox­ide re­duced an­nu­ally.

11 mil­lion pounds of nitro­gen ox­ides re­duced an­nu­ally.

1 mil­lion pounds of par­tic­u­late mat­ter re­duced an­nu­ally.

9 mil­lion pounds of volatile or­ganic com­pounds re­duced an­nu­ally.

One of the pri­mary rea­sons that auto own­ers visit a me­chanic is for an oil change, which raises a ques­tion: What hap­pens when ve­hi­cles no longer rely on oil? It’s not that elec­tric ve­hi­cles won’t re­quire main­te­nance (they still have brakes, tires and wind­shield wipers, af­ter all), but the run­ning gear is far sim­pler, ex­perts say.

“Ba­si­cally th­ese things don’t break,” Tony Seba, a clean en­ergy ex­pert and the founder of Re­thinkX, a think tank that fore­casts changes in the trans­porta­tion in­dus­try. “They have 20 mov­ing parts, as op­posed to 2,000 in the in­ter­nal com­bus­tion engine.”

Seba pointed out that there are thou­sands of depart­ment store and dealer re­pair lo­ca­tions — as well as about 70,000 mom-and­pop re­pair shops — that will be sig­nif­i­cantly af­fected by a de­cline in busi­ness.


The Tesla Model 3 sedan has in­creased con­sumer in­ter­est in EVs be­cause of its price of $35,000. Other au­tomak­ers have an­nounced EV plans.

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