A new report has outlined the ripple effect that electric vehicles will have on the world at large and suggested that the oil industries, retail, city planners and even tax collectors will feel a significant impact.
Bloomberg New Energy Finance Advisory Board Chairman Michael Liebrich and Chief Editor Angus McCrone co-authored the paper entitled: Electric vehicles – It’s not just about the car.
It highlights the fact that batteries are getting cheaper and better. So we’re going to hit a tipping point soon where internal combustion engines look like the poor alternative. In fact we may already be there.
Are electric cars the best solution right now?
We have electric cars that are faster, smoother, cleaner and lower maintenance than internal combustion-powered machines right now. They offer packaging advantages and electric cars are also a far more suitable base for autonomous technology, connection to the Internet of Things.
The infrastructure still needs to improve and then the only things holding the EV movement back will be the cost of the batteries, range and public acceptance.
When the tipping point comes, the authors suggest that there won’t be a linear switch to electric cars. They say it will be an aggressive and wholesale transition, which will have a huge impact on the wider world.
The authors point to the way renewable energy has transformed electricity supply and now influences construction and architecture. Cellphone technology, too, has had a major impact on a number of other industries.
Smartphones killed cameras and maps
Cameras, maps and alarm clocks have fallen by the wayside and cash, newspapers and MP3 players are heading the same way. Our smartphones have given us so much more, though, and are helping to shape the world we live in.
According the Global EV Sales Outlook to 2040, at least 35% of new vehicles will be electric in less than 25 years and in some markets the number could be as high as 47%. This report reckons that falling battery prices and increased range will actually mean that number if conservative, as 40% of cars in the US are second cars and range anxiety just isn’t a factor with the short journeys they’re required to do.
At the same time the likes of the Tesla and now VW are making cars that can return 300 miles on a single charge and battery technology is improving all the time. The stumbling blocks are falling by the wayside in short order.
Good news for battery makers
The report revealed that battery providers will inevitably benefit, but gearbox manufacturers, fuel assembly suppliers and manufacturers of catalytic converters will not fare so well.
The materials supply chain will also change dramatically and, as things stand, lithium will become increasingly important. The demand for steel could drop, though, as manufacturers opt for lightweight materials and continue to experiment with 3D-printed composite frames.
Car dealers tend to make a lot of their money from maintenance, but electric cars have far fewer moving parts. Batteries last for approximately 70,000 miles and there is relatively little the dealers can do to the powerplant. There will be fewer accidents, too, due to self-driving technology.
So Bloomberg suggests that the dealer network and independent garages will suffer heavy losses and largely disappear. They will be replaced by single large dealers and even online purchases.
A new form of electrical grid?
The electricity system will also have to adapt, as EVs are expected to boost the overall demand by 8%, but they are also potentially a useful source of energy. Cars can recharge at off-peak times and then, theoretically, give energy back to the grid if the network is short of power. That assumes, of course, that we don’t have a SolarCity/Powerwall-style set up for each home that effectively covers all of our needs.
Oil companies will inevitably feel the impact of the EV revolution and an industry that is already reeling from reduced investment and falling prices may never recover. The oil companies were banking on a resurgence in prices as supplies dwindled and demand began to outstrip supply. But that may actually never occur if the world finds a way to do without oil.
Petrol stations will inevitably become a dying breed and it remains to be seen whether they can transition into full charging stations and survive or simply die out.
The EV industry will drive battery technology forward and Elon Musk’s Solar City will show the world that we can cope without oil and liquid gold could become basically worthless overnight.
City planners will need to change their ways
Then there’s the road and charging infrastructure, as EVs will need an on-street charging facility and that is a major construction project in the making. This will have an impact on city planning, buildings, regulations and more.
One potentially interesting development could be that the very technology that drives electric cars forward could cost them in the end, in a way. Smaller, lighter batteries could power a new generation of bicycles and motorbikes, which could render cars largely redundant in urban centers.
Governments, too, will have to create strategies to cope with the impact of the electric car. Incentives to switch to electric cars cannot last forever and when the people switch to EVs then governments around the world will lose a vast amount of tax income. Each government will have to find a way to compensate for that lost income in the form of road charging schemes and even an additional sales tax on the vehicle.
Electric vehicles will change the world and they have the capacity to give us cleaner, better cars that can drive the internal combustion out of existence much sooner than many of us can actually imagine. There will be a ripple effect, though.
Some industries and even nations will suffer along the way and it will be fascinating to see how the evolution of EVs affects the rest of the world. Electrification of the automotive industry is potentially an industrial revolution all on its own and there are going to be ramifications we just haven’t considered.
It’s going to be interesting.