A boom in electric vehicles (EVs) is coming.
Battery-powered vehicles account for less than 1% of total vehicle sales today. Between limited driving range and slow recharging times, automakers have struggled to sell their electric cars in the past: BMW sold fewer than 24,100 of its i3 electric city car last year, while Renault-Nissan has sold fewer than 350,000 electric vehicles since 2010.
Yet, the number of EV sales is rising rapidly and most analysts expect a major shift to take place by 2025 as battery costs fall and governments try to curb air pollution.
Analysts from Bloomberg are predicting a tidal wave of EV sales that could make or break many companies.
Fueling the shift is a change in battery technology. The battery is the component of EVs that decides much of their price and driving range, and so far battery technology is getting better by the year.
Thanks to Tesla’s aggressive work in lithium-ion battery development, prices are far below forecasts with further cost reductions expected once its Gigafactory completed.
While their own EV programs are in development, major automakers are building the infrastructure needed to sustain the switch to mass usage of electric cars. Volkswagen AG, BMW AG and Ford Motor Co. are planning to build a charging network in Europe — around 400 sites in 2017 and thousands by 2020.
On the regulatory side, governments across the globe are encouraging adoption of electric vehicles. Eight nations – Canada, China, France, Japan, Norway, Sweden, the UK and the US – have already signed a Government Fleet Declaration, pledging to increase the share of electric vehicles in their government fleets.
The Declaration signals intent to speed up adoption of low-carbon technologies with an aim of 20 million electric vehicles deployed globally by 2020. It also aims at encouraging cities, state governments, companies, and other organizations to accelerate the introduction of clean vehicles in their fleets. Athens, Madrid, Mexico City and Paris have already pledged to phase out diesel vehicles by 2025.