The Future Lies With Electric Vehicles

07/05/2023, 19:28 The future lies with electric vehicles | The Economist
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Special report | Electrification
The future lies with electric vehicles

The car industry is electrifying rapidly and irrevocably
Apr 14th 2023
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C arl benz may have been the first person successfully to marry the horseless
carriage with the ice. But early dalliances with batteries predate him. As
early as the 1830s Robert Anderson, a Scot, developed a rudimentary ev, but it
was not a success. Even after the car industry really took off in the 1890s, as
French and American firms joined the fray, electric power was still in the
ascendancy. In America in 1900, almost twice as many electric- as petrol-driven
https://www.economist.com/special-report/2023/04/14/an-electric-shock 1/5
vehicles were on the road. Then the Ford Model T, cheaply made by mass
production, a growing oil industry and a wider availability of petrol sealed the
fate of battery power.
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Despite half-hearted resurrections such as the ev1 from General Motors in 1996,
it was not until Tesla’s arrival in 2003 that the battery-electric revolution began
in earnest. This, in turn, hastened efforts to decarbonise road transport,
propelling evs and phevs from 0.2% of new-car sales a decade ago to 13% in
2022. The surge is set to continue. By 2025 evs will account for nearly a quarter
of sales, says Bloomberg nef, a data firm, and closer to 40% in Europe and
China. Even conservative estimates reckon that by 2040 around three-quarters
of new-car sales worldwide will be fully electric, as better batteries make even
phevs redundant.
Tough emissions regulations have done much to promote evs. A draft law
approved by the European Union in February may mean a total ban on new ice
cars by 2035 (though Germany has won an exception for cars using carbon-
neutral synthetic fuels). Governments and cities are cracking down on carbon
and other emissions that affect local air quality China is demanding that 20% of
and other emissions that affect local
07/05/2023, 19:28
air quality. China is demanding that 20% of
The future lies with electric vehicles | The Economist
cars must be nevs by 2025, with a full switch away from cars with only an ice by
2035. Even in America, the land of the petrolhead, Joe Biden unveiled on April
12th proposals for strict limits on vehicle emissions, the toughest of which
would require around two-thirds of car sales to be battery-powered by 2032. The

president is backing this up with huge handouts to domestic ev industries. The
2022 Inflation Reduction Act, a vast clean-energy package, subsidises sales of
America-made evs with domestic-made batteries from raw materials supplied at
home or from allies.
Carmakers are duly investing vast sums: around $1.2trn by 2030, according to
Reuters, a news agency. America’s gm says it will go all-electric by 2035 and Ford
wants its European arm to do the same by 2030. The goal of Stellantis (whose
largest shareholder, Exor, part-owns The Economist’s parent company), formed by
a merger in 2021 of Fiat Chrysler and psa Group, owner of Citroën and Peugeot, is
for all new cars in Europe and half its American output to be evs by 2030.
Volkswagen says its namesake brand will be ev-only by 2033 in Europe and that
Audi, an upmarket sibling, will go fully electric worldwide by the same year.
The biggest deterrents to buying an electric car—price and range—are slowly

being overcome. Tightening bottlenecks for raw materials, such as lithium and
nickel, caused battery prices, which are still around 40-50% of the cost of a new
ev, to rise slightly in 2022. But scale and new tech have pushed prices down by
as much as 90% since 2008. Better batteries mean longer ranges, partly
alleviating concerns about a slow rollout of public charging infrastructure.
Generous subsidies and an ever-increasing choice of new models mean that
Tesla and a handful of unattractive “compliance” cars are no longer the only
choices. The total cost of owning an ev, including running costs, repairs and
fuel, is already roughly equivalent to some ice cars. By the end of this decade the
sticker price of most evs will be equal to that of ice cars—and they will be
cheaper to run.7
This article appeared in the Special report section of the print edition under the headline "An electric shock"
From the April 22nd 2023

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07/05/2023, 19:28 The future lies with electric vehicles | The Economist

Report: A difficult new world

Special report | Electrification

Apr 14th 2023

Save Share Give

would require around two-thirds of car sales to be battery-powered by 2032. The

The biggest deterrents to buying an electric car—price and range—are slowly

From the April 22nd 2023

Explore the edition

Save Share Give Reuse this content

Subscribe The Trust Project

Group subscriptions Help and contact us

Reuse our content

Published since September 1843 to take part in “a severe contest

The Economist The Economist Group

About The Economist Group

California: Do Not Sell My Personal Information

Copyright © The Economist Newspaper Limited 2023. All rights reserved.

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