When Will Electric Cars Replace Gas

When Will Electric Cars Replace Gas? In this post, we will discuss the answers to these questions; can electric cars replace gas? how soon will electric cars replace gasoline cars and should electric cars replace gas cars? Electric vehicles run on battery power, charged by electricity at home or at a charging station. As more people and goods move around the planet, our cars, planes, trains, and ships are having a growing impact on the climate. Electric vehicles are the technology of choice for eco-friendly car buyers because they have no emissions tied to their operation; they can be powered with clean, renewable energy; and even when charged with power from nonrenewable sources, the inherent fuel efficiency of electric motors versus internal combustion engines means they release less carbon per mile (when similar vehicles are compared).

can electric cars replace gas

Even though they’re technically more efficient, how much cheaper electric vehicles are to drive depends on the cost of electricity and gasoline (or diesel) where you live. They usually cost less per mile, but they tend to cost more up front.

The lithium-ion battery packs that power EVs have to be plugged into 240 volts and adequate current to charge in a reasonable number of hours, so buyers should count on additional costs for the hardware and installation. Clearly, renters and those without garages are at a disadvantage.

Public charging should be viewed as an occasional convenience or a means to venture past one’s own region, both because it’s often more expensive (or can become so without warning) and because even fast charging is timed in hours, not minutes, if you use a full gas tank and its associated range as your standard. The most sensible, affordable way to own an electric car is to pay only for the size of battery pack you need and to charge at home overnight, every night, when electric demands are typically lower, taking advantage of off-peak rates if offered.

Shoppers determining how much range they need will have to consider the weather, because range can plummet as the battery pack cools and the occupants sacrifice range to heat the cabin electrically. According to a AAA study, EVs can lose more than 40 percent of their range at 20 degrees.

Though a federal tax credit worth up to $7,500 for longer-range electric cars remains for some EV brands, Tesla and Chevrolet hit their sales caps in 2019, triggering a phaseout that has reduced the amount to a maximum of $1,875, after which it will expire. Additionally, because electric car motorists don’t pay gas taxes, some states have begun to establish recurring registration fees for EVs that are clearly punitive.

In a country with gas prices as low as ours, this still-new technology needs a leg up to succeed, and incentives seem to be waning even as much of the world embraces or even mandates EV adoption.

should electric cars replace gas cars

ELECTRIC VEHICLES WILL one day push gas- or diesel-powered ones to the curb—but how soon? Sooner than you might think, according to researchers at the International Monetary Fund and Georgetown University: Based on how quickly horses and buggies disappeared in the early 1900s, the researchers argue, more than 90 per cent of all passenger vehicles in the U.S., Canada, Europe and other rich countries could be electric by 2040.

Along with a spate of recent commitments to electric vehicles by governments and car companies, the study offers hope about the prospects for weaning the transportation sector off carbon. Of more than one billion registered vehicleson the road today, only two million are electric (with one million of those in China). But if EVs catch on as fast as the researchers project, it could reduce oil use by 21 million barrels a day and cut CO2 emissions 3.2 billion tons a year — equivalent to 60 percent of total U.S. emissions today.

Other studies project a slower rollout, although newer ones tend be more aggressive. Bloomberg New Energy Finance recently bumped up its estimate of the EV market share in 2040 from 35 per cent of all new car sales to 54 percent. RethinkX, an independent think tank, is even more bullish, saying most U.S. vehicles will be electric by 2030 —just 13 years from now.

The authors of the IMF-Georgetown working paper, “Riding the Energy Transition,” base their own optimism on an analysis of past technology transitions, especially the one from horses to cars.

“We were surprised at how fast cars replaced horses as the main means of transport in the early 1900s,” says IMF economist Fuad Hasanov. “It happened in only 10 to 15 years in spite of the many hurdles.” By comparison, the barriers to adopting electric vehicles today seem small.

No Gas Stations. A Lot of Manure

In 1910 there were few paved roads in America, and the biggest worry in cities was what to do with all the horse manure that was piling up. Gasoline was hard to find; today’s massive infrastructure of refineries and gas stations was just beginning to be built. Driving one of Henry Ford’s new Model T’s was a daunting change from a horse, with or without buggy, and it was as affordable to Americans then as a $137,000 car would have been in 2015—which is close to twice the price tag of Tesla’s Model S. Not surprisingly, very few people bought Model T’s at that price.

And yet by 1921, the price had dropped to the equivalent of $35,000, governments and the oil industry had spent massively on roads and other infrastructure, and sales of Model T’s shot up to a million a year. By 1925 they were nearing two million.

If electric vehicles are adopted at that pace, say Hasanov and Reda Cherif of IMF and Aditya Pande of Georgetown, they’ll account for 5 percent of all vehicles by the late 2020s and 36 percent by the early 2040s. The researchers call that the “slow-adoption scenario.”

In their “fast-adoption scenario,” the researchers extrapolate the rise of electric vehicles, not from the rate at which gas-powered cars were adopted a century ago, but from the rate at which horses disappeared. That happened much faster—in part because public transit was expanding rapidly at the same time. Many people who gave up horses didn’t buy cars at first; they hopped on electric street cars.

Today there’s no comparable public transit boom, and switching from gas-powered to electric cars is much easier than switching from horses to cars was a century ago. The researchers conclude that the fast-adoption scenario—which matches the actual EV adoption rate between 2011 and 2015—is much more likely.

It projects 30 percent of vehicles in the U.S. will be electric by the late 2020s and 93 percent by the early 2040s.

Projection produced in five-year increments starting from 2017 and is based on an assumption

of constant vehicles per capita with around 0.8 percent U.S. population growth per year.

If that sounds implausible, consider cell phones, says Cherif. In the 1980s, when cell phones were bulky, expensive, and had a short battery life, experts predicted that by 2000 the industry might sell 900,000 units a year. Actual sales that year were 109 million—and by 2014 another unexpected technology transition had happened: Virtually all of those phones were smart phones.

“Adoption of a new technology like electric cars may seem slow or look like it’s never going to happen,” says Cherif, “until it passes a threshold and then it just takes off.”

A Kodak Moment?

Tesla’s new Model 3 is priced at $35,000 and can travel 220 miles on a full charge. That may be the threshold price for electric vehicles, Cherif says. Between March and June 2016, more than 400,000 people placed $1000 deposits to pre-order the Model 3—a car that didn’t yet exist. The first 100 Model 3s were delivered this past August.

Those four months in 2016 may come to seem like the car and oil industries’ “Kodak Moment”. Kodak made film for cameras and was one the world’s most powerful companies; it invented the digital camera in 1975. But it failed to adapt to the new technology and filed for bankruptcy in 2012.

Fearing a similar fate, just about every automaker is now jumping on the electric-powered bandwagon. Sweden’s Volvo Car Group will only produce electrified models — hybrids and fully battery powered — by 2019. Jaguar Land Rover will follow suit in 2020. VW has pledged to become the world leader in electric vehicles by 2025. Even James Bond could be driving an all-electric Aston Martin as soon as 2019.

Governments are joining in. Norway will ban the sale of fossil fuel-burning cars and vans in 2025. Governments in the U.K., the Netherlands, and France have promised the same by 2040. Germany, home of Volkswagen, Mercedes-Benz and Porsche, is talking about a similar ban.

China just announced it too will ban the sales of gasoline and diesel vehicles—though it has yet to set a timetable. China is the world’s biggest car market, selling 20 million vehicles a year. It already has more than 40 different electric vehicles available, most made by Chinese companies.

This past May India’s Energy Minister Piyush Goyal predicted to National Geographic that only electric vehicles will be sold in India by 2030— even without a government restriction, because they are cleaner, quieter, longer-lasting, and will cost less.

In China and India but also in western Europe, air pollution is providing a big motive to go electric, says Bloomberg analyst Albert Cheung. Conversely, any reduction in government commitment to fight air pollution could slow the uptake of electric vehicles. So could super-cheap gas prices and a lack of investment in charging infrastructure.

But all in all, Cheung says: “it is looking harder and harder to apply the brakes to that electric vehicle bandwagon.”

The Revolution Will Be Autonomous

Stanford economist Tony Seba pushes the vision of an EV revolution a step further: He says it’s coming in the 2020s, and it will be self-driving. In a new study, “Rethinking Transportation 2020-2030”, Seba and his colleagues at RethinkX say 95 percent of all passenger miles will be in autonomous electric vehicles by 2030.

How is that even possible? First, Seba assumes electric vehicles will be much cheaper to buy than today because of falling battery costs and the fact that they’re easier to manufacture and maintain — only 20 moving parts versus 2000 for gasoline or diesel vehicles. “Today’s electric vehicles have gone over 200,000 miles and all they needed were new sets of tires,” Seba says. One Tesla S has logged 500,000 miles with the same battery.

Second, according to Seba, the majority of vehicles will be owned not by individuals but by transportation companies. Commercial fleets are eager for electric vehicles—especially self-driving ones. Eliminating drivers could generate huge cost savings for the likes of UPS and FedEx, Uber and Lyft. Self-driving taxis and commercial vehicles are being tested in Pittsburgh, Phoenix, and Boston, as well as Singapore, Dubai, and Wuzhen, China.

Cost is what will push Americans out of their driver seats, Seba says. Electric vehicles are four times more energy efficient and cheaper to fuel; autonomous ones could be even better. Owning and operating the average gasoline-powered vehicle costs close to $10,000 a year when driven 15,000 miles, according to the auto club AAA, and that vehicle is parked 95 percent of the time.

In Seba’s vision, there will be 200 million fewer passenger cars on American roads in 2030. Instead there will be millions of self-driving vehicles that anyone can access with the touch of a button, to go where they want for a few pennies per mile.

“Instead of spending $10,000 a year for road transportation, a family might spend only $1,000,” Seba says. “It will make no rational economic sense to own a car, because it will be so cheap to hail an autonomous electric vehicle.”

But will it still make irrational, emotional sense? Aren’t cars part of the American identity? For now maybe they are—but so were horses once.

Right up there with global warming, the best quarterback of all time, and whether a daily glass of wine is healthy for you, is the debate over whether electric vehicles will ever put the internal combustion automobile in the garage for good.  While some feel that this day of reckoning is right around the corner, others scoff at it as if it was just a pipedream hoped for by Elon Musk and his avid followers.

The History of the Electric Car

To put things into perspective, electric cars pre-date their fossil fuel-burning cousins by about 60 years, as battery-powered vehicles first came onto the scene in the 1830s.  In fact, by the early 1900s, electric cars outsold gas-powered vehicles 2 to 1, as the noisy, smoke-emitting internal combustion vehicles were considered second-rate to the quieter and cleaner electric models.  However, by the 1920s, as internal combustion technology improved, and as intercity and interstate roadways became more developed, the electric engine just couldn’t keep up with the speed and range that motorists began to demand.  As a result, electric cars were summarily abandoned by the 1930s, and it looked like the days of the electrics were over.

The Resurgence of the Electrics

Fast forward 70 years (if you can call that fast), after numerous commercial attempts fell flat throughout the second half of the 20th century, battery-powered vehicles have made a comeback.  Improved battery life, coupled with higher gas prices and government-mandated fuel economy requirements, gave electric cars the momentum that they needed to become commercially viable.  While range, power and infrastructure remained problematic, the pressure to find alternatives to fossil fuel burning was high, and vehicle manufacturers redefined their priorities as a result.

Enter Tesla

The electric car market got a proverbial jolt, when after four years of development, Elon Musk and his Tesla Motors introduced the Tesla Roadster in 2008.  The Roadster, which was the first all-electric production car that had a range of 200 miles, would be the vehicle that broke the glass ceiling with respect to wider acceptance of an alternative fuel vehicle in the US.  With such a development, there has since been a mad scramble among most of the major auto manufacturers to produce an electric vehicle that will be universally accepted by drivers across this continent and others.  While many have tried and failed, it was the Tesla that brought the electric car onto the world stage and upped the ante for all auto manufacturers who clung to their traditional fossil fuel-burning ways.

At an Inflection Point Today

Despite Tesla’s success with the Roadster, and subsequent Model S and Model 3, and despite Nissan’s inroads with the Leaf, electric vehicle sales still represent less than 1% of global sales.  While the Model 3 sets new sales records with each successive month and quarter, electric cars are still not accepted widely in US households, or abroad.

Benefitting continued internal combustion dominance on the roadways, the US’s new self-reliance on oil production, coupled with an output glut from OPEC, and a corresponding slowdown in the economy, has put gas prices back to where they were 15 years ago-and that has taken a lot of the spark out of the batteries of the electric car market.  Moreover, considerations of relaxed, or an elimination of, national fuel economy standards, now proposed by the current administration, would further set back manufacturers’ needs for finding electric and/or hybrid solutions.  With such, electric car makers currently face a renewed uphill climb in battling for consumers’ attention and consideration.

how will electric cars affect gas prices

As much as consumer preferences will ebb and flow, and electric vehicles will come into and out of vogue, it will be national macroeconomic factors that will ultimately determine whether alternative fuel vehicles gain further traction, or whether fossil fuel dominance will continue into the foreseeable future.  The four big factors that have, and will continue to shape the future of electric vehicles will be:  1) fuel prices, 2) economic incentives, 3) corporate regulation, and 4) infrastructure.

The Relative Cost of a Fill-up

It’s not earth-shattering to suggest that the price of a gallon of gas will affect electric car purchases going forward, as it always has.  However, we believe that low gas prices are here to stay for many years.  The price of oil in the US will likely have a cap on it for quite some time, as natural gas and oil production through fracking and other technologies, provides a high degree of energy independence from OPEC and other oil-producing nations.  Even if the US economy should regain its pre-Covid momentum, Russia and Saudi Arabia have broadcast loudly that they will do whatever it takes to maintain market share on the production side.  Meanwhile, other members of OPEC+ are in no hurry to cut their own production, and cheating on production quotas is common as a hot day in Qatar.  With all that, barring significant unrest (more than normal) in the Middle East, don’t expect high gas prices to return to US pumps anytime soon.

Tax incentives/rebates

Our federal and state governments have a lot of say over whether the electric vehicle industry continues to grow.  Tax incentives for both manufacturers and consumers were big catalysts for growth over the last decade, with up to $7,500 in tax credits for consumers who purchased new electric cars.  These incentives were powerful tools in reshaping the competitive landscape for electric autos, as the federal and state governments spent billions essentially subsidizing products that were uncompetitively priced.  As of late, these incentives have diminished, with the cost of purchasing an electric car becoming more affordable, as Tesla, Nissan, and others have been able to reduce unit production costs as a result of their higher sales volumes.  This has diminished the need for government to step in and provide subsidies, which is convenient, as the appetite for continuing to do so has diminished as well.  Of course, success begets success for electric car manufacturers, as increased sales further brings down per vehicle costs, making it more economically viable for Tesla and others to compete vis-a-vis their fossil fuel-burning rivals.

Just Following the Rules

Much of the impetus behind the development of electric vehicles can be traced back to 1975, when Corporate Average Fuel Economy (CAFE) standards were put in place for auto manufacturers, forcing them to conform to fuel efficiency requirements, or be penalized significantly for not doing so.  These annually-escalating requirements, which have been in effect for the last 45 years, are now under review by the current administration, and the Transportation Department, headed by Elaine Chao (Mitch McConnell’s wife), is contemplating whether these rules have been helpful or hurtful to US consumers and businesses.  Should these requirements be repealed, the motivation to produce fuel-efficient cars and trucks for those auto manufacturers selling into the US market, will diminish greatly, and tip the scales once again towards bigger, stronger, faster cars and trucks.  (Note:  Have you noticed that Mr. Musk is careful not to poke the bear, lest he make it angry and suffer from the wrath inflicted upon those who do.)

when will gas cars be phased out

As is widely known, the commercial viability of electric vehicles is only as good as the infrastructure that can support it.  Currently (no pun intended), there are 168,000 gas stations across the US, as compared to 17,000 public recharging stations.  This 10-to-1 advantage suggests that electric vehicles have a long way to go (no pun intended here either) before they enjoy the convenience of refueling that gas-powered drivers have today.  And, we’re not even discussing the speed at which the refueling occurs.  It’s one thing to go into a 7-Eleven for a Diet Coke and a pack of gum while you fill up with gas.  It’s another thing, however, to hang out in the Walmart parking lot for a half hour or more, while your car is recharging. (Damn, I left the charging cord in the garage!)

As the private sector has little to be gained by investing in recharging stations (just ask Panera Bread and Olive Garden), it will be incumbent upon the public sector, aka government, to fund the additional infrastructure needed to ensure that you can get from point A to point B in an electric car, and not be left stranded with a dead battery.  Today, the motivation for such is just not there, and it falls low on the priority list for the current administration-especially with gas prices at a decade low, and the need for votes within the oil patch.  With Congress unable to move any form of infrastructure bill forward, even at times where it is needed the most, don’t look to government to fund anything on behalf of the man who’s net worth just passed $70 billion.

electric vs ice cars?

Electric-powered autos will certainly have their place in the US market.  Postal trucks, Amazon delivery vans, Ubers and city buses all have operating models that support the use of electric vehicles, as their fleet management and centralized recharging stations fit well with the benefits afforded by electrics, without the logistical concerns of the average motorist.  However, the widespread use of electric vehicles will be heavily reliant upon the priorities of the US administration, given that discussed above.  Today, the growth of the electric car market is not a focus of the current administration, and it could even be argued that the opposite is true.  So, if you were to ask me whether Tesla and other electric manufacturers will enjoy headwinds or tailwinds over the next four years, ask me on November 4th, following election day.  When you see the election results, you’ll have your answer.

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