by Bob Shively, Enerdynamics President and Lead Facilitator
“I think if we look back in a few years we would call 2017 the tipping point of electric vehicles.” ~ Arnoud Balhuizen, Chief Commercial Officer of BHP Billington speaking at a conference in September 2017.
If this quote was attributed to Elon Musk (CEO of Tesla) or maybe the head of an environmental organization we might not take much notice of it. But Arnoud Balhuizen is a top executive in the world’s largest mining company. At a time when the administration in Washington, including the President and the head of the Department of Energy, are very fossil-fuel friendly it is interesting to note that Balhuizen has a different take on the world of transport. So, what is going on with electric vehicles (EVs)?
Numerous key governments have made recent announcements that indicate strong support for the future of EVs:
- Both France and the United Kingdom announced in July that they intend to phase out gasoline and diesel-powered cars by 2040.
- In September, China stated that it too will phase out fossil-fuel cars and development of a specific time-plan is underway; meanwhile China set quotas for car companies to sell 10% NEVs (EVs or plug-in hybrids) by 2019 and 12% by 2020.
- The chairwoman of the California Air Resources Board stated recently that California Gov. Jerry Brown asked her about California phasing out all fossil-fuel vehicles. (California already has stringent greenhouse gas rules that will require a significant shift to EVs if goals are to be met.)
- And other countries such as Norway and the Netherlands are discussing even faster timetables for such as full phase out while Germany is leading discussions about EV quotas in all of the European Union.
Meanwhile, numerous car companies have announced a strong focus on EVs as a source of future sales:
- GM (Chevy Bolt), Tesla (Model 3), and Nissan (the upcoming redesigned Leaf) this year are introducing mass-market cars with ranges in excess of 200 miles.
- Volvo and Mercedes-Benz announced that all models will be available in electric versions by 2019 and 2022, respectively.
- Volkswagen has announced plans to become the world leader in EVs by 2025 and stated that it will introduce two new models (including a cross-over SUV) in the U.S. in 2020 that will have a range of over 300 miles and will fit within the “affordable segment.”
- Numerous Chinese car companies in addition to Volvo are actively and successfully selling EVs in their home market including BYD, Kandi, BAIC, and Chery.
- Meanwhile, Apple and Alphabet (the parent of Google) are both spending significant R&D dollars in the EV market.
So are EVs finally real?
EVs have been a “coming technology” in the news at least since 1996 when General Motors EV1 was introduced in California to great fanfare. But GM famously recalled all EV1s in 2002 as chronicled in the movie “Who Killed the Electric Car?” and momentum seemed lost in a world of cheap gasoline. But now, the electric business is hoping things are different as we see rapid growth in sales of EVs around the world.
Source: LMC Automotive and market 2017 and 2018 as forecast
Utilities in the U.S. and other developed economies are struggling with slow load growth, which makes it difficult to grow earnings. But Bloomberg New Energy Finance, in its New Energy Outlook 2017, forecast that by 2040, EVs will account for 13% of electric usage in Europe and 12% in the U.S. The U.S. Bloomberg has forecast that by the early 2030s, EV sales will beat out those of fossil-fuel vehicles. Many utilities are currently putting forth proposals or implementing pilots to build electric vehicle charging stations.
In California, where the regulators initially resisted utility involvement, the attitude has changed to a belief that utilities are best suited to quickly build the necessary infrastructure to foster rapid EV growth. We believe that growth in EVs is one of the great opportunities for electric companies to overcome the current tepid load growth.
We’ll close with a quote from Jim Avery, formerly the Chief Development Officer for SDG&E. Speaking on the topic of current slow load growth, but considering the potential of EVs, Avery said: “Think I’m worried about growth? I’m worried about how the hell to serve all of that.”