Affordable electric cars are coming. With nearly all major automotive companies, as well as Apple and Google, slated to release $40,000 or less (before incentives) electric car models by 2020, the automotive industry has decided to start playing catch up with Tesla Motors.
Though they have just 0.1% market share worldwide, electric vehicles already make up more than 1% of automotive fleets in seven countries, including China, with most major nations taking steps to encourage further adoption. In countries like the U.S. and Germany, “encouragement” tends to come in the form of thousands of dollars in cash or tax incentives for customers buying new electric vehicles.
Infrastructural improvements are also coming fast for the new technology. Last year, the number of public charging stations grew 71%, registrations for EVs tripled in China, and worldwide ownership of electric cars broke 1 million units or a factor of 10 increase over the number estimated in 2012.
In a way, the spread of electric cars comes at the perfect time. Energy efficiency and rooftop solar power are already starting to drag down revenues from electricity sales. Lower revenues means utilities will struggle to pay down fixed costs and accommodate technological advances like renewable energy, a problem that is only compounded by the current state of U.S. infrastructure, which has suffered from decades of neglect. Many utilities would be doomed without some consistent increase in demand acting as a counter balance.
Widespread electric vehicle use would create the substantial demand for electricity utilities need to prevent a breakdown in their business models. Though there is no way of telling how utilities will fare once solar power costs decline to the point when everyone could feasibly install their own panels, electric vehicles could mean the difference between a smooth transition and a disruptive one. According to Bloomberg New Energy Finance (BNEF), electric cars could account for as much as 8% of humanity’s total electricity use by 2040, up from essentially 0% today.