Electric car sales are growing fast, although from a small base. They increased 41% in 2016 and have shown a 32% Compound Annual Growth Rate (CAGR) over the last four years.
Conventional cars, on the other hand are forecast to increase sales by 1.5%, with nearly 94 million units of light vehicles sold in 2017.
The last few years have seen a supportive environment in the US, Europe and China – all key markets for electric vehicles.
California, for example, accounts for more than half of electric vehicle sales in the US because of its zero-emission vehicle (ZEV) mandate that requires manufacturers to sell a certain percentage of electric vehicles.
People are nervous, however, about U.S policy under the new administration.
China has a reduced vehicle exise duty of 7.5% for qualifying vehicles that is expected to support auto sales in the world’s largest car market, with 28 million units expected to be sold in 2017.
Analysts at UBS predict that electric vehicles could reach cost parity with conventional vehicles as soon as 2018 because they will become cheaper to produce.
At present, the Tesla Model 3 is expected to lose $2,800 per car for the base version while GM loses $7,400 per car on every Chevy Bolt.
Car manufacturers need to achieve scale before they will start to break even.
While the running costs of electric cars are much cheaper than conventional vehicles when charged at home, around a sixth of the price at £2-4 per 100 miles, there are some things to watch out for.
Charging at rapid chargers away from home could cost as much or more than filling up with fuel.
Home charging systems add to the total cost of ownership and, as electric vehicles increase in number, will place strain on the grid in areas with high purchases.
The vehicle industry has long product cycles – cars are used for many years, and high capital investments.
This means that change is necessarily slow as the entire system adapts to a changing transport mix.
Oil is still expected to make up a third of European energy consumption due to transport demand.
If governments start banning sales of non-electric vehicles between 2025 and 2040 as many have indicated, we could all be driving electric vehicles by 2050-2060.