Electric vehicles (EV) of all kinds are a common sight in most major cities. What were once rarities or novelties on the road just a few years ago have become an everyday fact of life. That’s because while electric vehicles still make up only 2-3% of overall vehicle sales globally, their total share is growing quickly.
Global totals of EVs on the road have grown from 4.7 million vehicles in 2013 to 71.7 million by the end of 2019. China and the US lead the world for absolute number of EVs in use, followed by Europe. In Norway, for example, almost 40% of all vehicles on the road are EVs or hybrids. However, what is important to note in this trend is the pace at which the adoption of electric mobility—the use of vehicles powered by electric motors—has picked up speed in recent years. Societal attitudes are shifting definitively in favour of green mobility, and technological advances are keeping pace.
Recent advancements in EV technology
Part of the reason EV transportation has become more prevalent in recent years is the technological advancement that has allowed the cost and efficiency of these vehicles to more closely match conventional internal combustion engine automobiles.
Globally, the cost of electricity for battery storage, for example, has dropped to $150 US per megawatt-hour—roughly half the price it was just two years ago.
Improved battery production efficiency has not only reduced the battery unit price (the largest cost in an EV’s total price) but simultaneously increasing battery range between charges. The improvements have been so dramatic that battery storage is now the cheaper option in gas-importing regions like Europe, China, and Japan. And these gains are only set to compound. Energy storage costs could drop an additional 66% to 80% over the next decade, while energy costs themselves are projected to continue their downward trend until at least 2040.
Other tools that are already making their way to consumers via traditional automobiles, features like lane departure monitoring, collision warning, automatic braking, and parking assistance, are the kinds of technologies that will help smooth the eventual transition to fully autonomous electric vehicles.
In the meantime, EV technology is moving beyond automobiles. EV buses look like the next category of vehicles ready for an EV revolution.
The UK Government has committed to a new National Bus Strategy, which commits £3 billion to the purchase of British-built electric or hydrogen buses (coupled with an end to the sale of diesel-powered buses) to combat climate change and air pollution.
And the Toronto Transit Commission (TTC), which already operates the largest electric bus fleet in North America, has announced plans to add 300 electric buses to their existing 60 electric vehicle fleet. The $300 million purchase comes just six months after the TTC approved the addition of another 300 hybrid electric vehicle buses for $390 million. The TTC aims to have the 300 fully electric buses in service by early 2025 on its way to a zero-emissions fleet by 2040.
The benefits of EV green transport
The benefits of EV green transport are self-evident: EV technology helps decrease emissions linked to climate change and air pollution. For those vehicles which are all-electric, there are no emissions at all.
And while it is their eco-friendly nature that is the draw for many EV drivers, there are other less obvious benefits to an electric or hybrid car.
The first that often comes to mind is the reduced running costs. Simply put, not paying for gas saves EV drivers a lot of money over the short and (especially) long terms. And those costs won’t be replaced by the cost of recharging your car. If you charge at home, it could cost you just $300 to $400 to charge your vehicle over the course of a year. And if you use a public charging station, you can fill your battery for as little as $5 to $7 for a full charge.
Hurdles to an EV transition
Despite EVs growing popularity, the transition to a green transport future isn’t without its challenges.
One of the biggest hurdles remains the relative scarcity of public charging stations. This remains perhaps the most significant barrier to widespread EV adoption (besides vehicle price). However, with many EV models now featuring up to 400 miles on a single charge, so-called “range anxiety” is less of a concern than it used to be. And strides are being made to improve the charging infrastructure. Almost one million charging stations have been installed globally, and in the United States alone, charging infrastructure is growing at a compound annual growth rate (CAGR) in the mid-30% to low-40%.
There are also some environmental concerns with the mining of certain metals and materials crucial to electric vehicles. Lithium, a key component in EV batteries, requires enormous amounts of water to extract. There are child labour and human rights concerns associated with cobalt mines in the Democratic Republic of Congo (where virtually all the world’s cobalt comes from), and nickel mining has been associated with negative environmental issues, including toxic by-products and contamination of other natural resources.
Social attitudes shaping the transition to green mobility
Consumers and investors alike are increasingly demanding more environmentally conscious transportation options as concerns about climate change and pollution grow. In response to these concerns, governments worldwide have toughened environmental legislation. Many businesses have also begun to factor in their ecological cost of doing business and provide greater transparency about climate change-related risks.
As just one example of the dramatic shift in consumer and social attitudes, a recent KMPG study in Canada found that 68% of Canadians who plan to buy a new vehicle within the next five years are likely to purchase either a fully electric or hybrid electric vehicle. “Our poll research illustrates huge consumer demand in Canada for EVs, putting the onus on manufacturers and governments alike to shift gears not only to meet the expected surge in EV sales but to invest heavily in the necessary infrastructure,” said Peter Hatges, Partner, National Sector Leader, Automotive, KPMG in Canada.
And while many of the respondents surveyed indicated that environmental concerns were a motivator for their switch to EVs, these consumers also highlighted lower operating costs, tax incentives, and the prospect of reduced insurance premiums as reasons for making a move to an EV.
With the speed of growth in green transport, it’s essential to keep pace with where the change is happening in the EV sector. For information on electric and autonomous vehicles and other disruptive innovations, sign up for our newsletter today.