Is electric really the future of cars?

It wasn’t that long ago that electric vehicles were somewhat of a rarity, seemingly owned solely by Hollywood A-listers or hardcore environmentalists. But that’s changing quite rapidly nowadays, and if industry experts are to be believed, those electric vehicles will soon dominate our roads – and eventually replace outright their gas-guzzling counterparts.

There are many factors behind the surge in popularity of electric vehicles (EVs). For starters, many of the traditional performance issues associated with electric cars, such as for example slow acceleration times, have been put to rest, with models such as the new Toyota Prius and Tesla Model S now firmly on par with the gas-powered market in this area.

What’s more, lower-priced and longer-life batteries have made electric vehicles not only a viable alternative to traditional engines, but a much more affordable one as well.

And let us not forget what is at the foundation of the push behind all of this: Cutting emissions to meet pollution-reduction targets. With auto manufacturers feeling the pressure to help meet those targets, they are piling more money than ever into the development of electric models and the marketing of these vehicles, and in the process sending the message to consumers that, indeed, electric is an option that can now be taken seriously.

But despite all this recent progress, can we really envisage a time when the gasoline-powered engine is confined to the history books? And, if so, will we be around to see it?

Putting things into perspective

While electric vehicles have been on the cusp of the mainstream consciousness for many years, it is only in the last five years or so that they have really come to prominence.

According to the International Business Times, the number of electric vehicles on the world’s roads has risen from less than 10,000 in 2009 to almost 750,000 in 2015. Thanks to this sharp rise in sales, the global electric car market topped $73bn globally in 2014 – a figure that is expected to rise to around $110bn by 2019.

But what exactly do these figures mean in the grand scheme of things? Are the gas-guzzler numbers in any way dropping? Well, in truth, not really. Not just yet. In the United States, for example, it’s pretty clear that electric vehicles still only have the tiniest of toes dipped in the water. Since 2013, for example, they’ve accounted for just 1.2-1.4 per cent of the total passenger car market, meaning a very insignificant portion of the total 7.8 million cars which were sold in the US in 2015 (total car sales globally reached about 88 million in the same year).

And as we can see from the 2014-2019 revenue growth forecast for electric, analysts are not expecting any major waves in the coming few years in terms of big number shifts to electric and away from gas.

Beyond that, however, from about 2020 onwards, the picture starts to look very different, and if we can believe a recent report by Bloomberg New Energy Finance, in a couple of decades, we will be living in a world where electric vehicles are well on their way to challenging the gas-powered market. Specifically, the report predicts that by 2040 worldwide sales of electric vehicles will top 40 million, which would represent 35 per cent of total new car sales.

The major players

Very briefly now let’s just get a quick overview on some of the key players and models in the electric market.

Perhaps the most recognisable name in the space is the Toyota Prius, having long been the poster child for electric travel. Just how long a history does the Prius have? Well, the first one in fact went on sale in Japan back in 1997, before being released across Europe and America, and then the rest of the world in the year 2000.

Yet despite becoming synonymous with the electric car boom and having that early start, the Prius is far from the world’s most popular electric vehicle. To name just a few of the other players and models making waves, there’s Toyota’s own RAV4 EV, the Nissan Leaf, the Renault Zoe, and Tesla’s various models.

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As for the auto-manufacturer with the largest market share overall, that honour falls to the Renault-Nissan Alliance, whose Leaf and Zoe models account for almost a third (28 per cent) of the global market – more than twice that of its nearest competitor.

And it’s worth noting here that despite prices starting at a very significant $70,000, Tesla’s Model S was the best-selling plug-in car of last year, shipping over 50,000 vehicles – a huge 52 per cent increase on the year before (sales figures that are likely to be smashed in the years to come as new models take the market by storm, including the Tesla Model 3, of which 400,000 pre-orders have already been taken for a car that is scheduled to go into production only next year).

In addition to the above mentions, the reality is you’d be hard pressed to find a manufacturer in the auto industry that isn’t making strides in the electric space. General Motors is on course to launch its newest all-electric vehicle – the Chevrolet Bolt – by the end of this year and is already forecasting sales anywhere in the region of 30,000 and 80,000.

Many more traditional auto-manufacturers are as well flexing their muscles, including BMW, Porsche, and Mercedes. BMW has seen continued success with their i3 range, and its latest incarnation is being talked about in industry circles as a genuine rival for the upcoming Tesla Model 3.

Porsche, meanwhile, fresh from announcing that sales of its electric-hybrid Panamera accounted for 10 per cent of sales of that model in 2014, announced plans to invest over $1bn into its first all-electric vehicle.

Finally, in a move thought by many to be a direct assault on Tesla’s market share, Mercedes announced a $2.3bn project to launch the first of four all-new electric models, starting in 2018.

Startup opportunities

Electric vehicle travel is no doubt a broad industry, and outside of the major players that are manufacturing the vehicles themselves, there are plenty of “to do’s” that present fantastic opportunities for the savvy entrepreneur. One of the biggest areas to keep an eye on is in the charging technology.

For an example we can look at the company ChargePoint. In existence since 2009, the tech startup rolled out a vast network of charging points across the US before expanding into Australia, New Zealand and Canada. ChargePoint has raised $164m in funding to date and is currently looking to launch their EV charging points throughout the rest of the world.

Another startup worth taking a look at is Farasis Energy, a company being credited by many in the industry with kick-starting the push for more affordable EVs through their inexpensive and lightweight lithium-ion batteries. The California-based startup is looking to take the technology that currently powers motorcycles and buses and develop it for electric cars – bringing costs and charge time down. Farasis recently caught the eye of the US Department of Energy who issued the company a $2.7m grant to put its ground-breaking batteries into mass production.

And while I could go on and list dozens of startups in the electric sector, for reasons of space I will wrap up here with a mention of Nomadic Power, a two-and-a-half-year-old startup whose innovative charging system claims to be able to double the range of electric vehicles. The German firm has developed a “mobile battery” that can charge an EV within just twenty minutes, thus freeing the electric car from the shackles of static charging points. Nomadic Power even plans to have a fleet of vehicles which will offer roadside assistance to electric cars that have run out of juice. For its innovations, the company received a $2.3m dollar grant from the European Commission to help put its plans into practice.

Is this really the end of gasoline-powered?

So let’s get down to the big question: Are electric vehicles going to dominate the roads? Clearly, yes, we are on our way. But there are some hurdles still to overcome, with the supporting infrastructure no doubt being the main issue. While electric charging points are certainly becoming more commonplace, they have a long way to go before they are as ubiquitous as the gas station.

This is however surely a matter of supply and demand. As the number of EVs on the road increases, so too will the number of places to charge them, and those charging stations and locations will pop up very quickly when needed. What’s more, advances in mobile charging technologies and longer life batteries will be playing a massive role in lessening the dependency on those charging stations. This should indeed mean that in the coming decades we can expect to be living in a world where owning an electric vehicle comes with pretty much zero inconvenience.

Another way of viewing all of this is that the foundational infrastructure is in plain sight and starting to get a firmer and firmer foothold, and things just need to now take their course. That said, we cannot ignore the political forces at play. Big oil is big business, and it will take time for it (or “them”) to get out of the way (or be forced out of the way) enough to get the electric vehicle momentum really moving.

And so it is a journey we measure in decades. But at least it has begun. And I say that business opportunity aside, we do need to do anything and everything to reverse the destruction of our environment. It’s time for solar, electric, wind, hydro, etc., to start contributing as they should. And for the savvy entrepreneur who finds a way to profit off of it all, power to you (yes, sorry, pun intended).

Neil Petch is the chairman of Virtuzone

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