A report, released by Dutch bank ING, predicts the end of fossil fuel reliant cars in Europe within two decades. ING says the relatively fast rise of Electric Vehicles (EVs) will be due to the decrease in the price of the cars in conjunction with increased government support. The report suggests electric cars will “become the rational choice for motorists in Europe.”
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The price of EVs to dramatically drop due to cheaper batteries
The decrease in price is due to cheaper batteries being produced and more range in the EV marketplace. The charging infrastructure surrounding the product is also becoming more widespread with governments over Europe moving to legislate the E-mobility market.
The report will come to no surprise to most. Volvo was ahead of the game, this month announcing that they would only make electric and hybrid vehicles after 2019. The ING report predicts the cost of owning an EV in Germany in 2024 to be close to that of a fossil fuel dependent car.
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France preparing to ban fossil fuel dependent cars by 2040
The cost in France should also be lower, as the cheese-loving nation announced last week its plan to ban petrol and diesel cars by 2040. All of this is backed up by Stanford University economist Tony Seba, who in a report he published on EVs predicts that “essentially all vehicle miles traveled will be electric by 2040.” He goes on to say, “The car industry faces an imminent technology disruption by AEVs [autonomous electric vehicles] in the early 2020s. Even without autonomous technology, the internal combustion engine car industry will have been long decimated by 2040.”
China is currently the biggest consumer of electric vehicles, last year the country purchased 507,000 vehicles out of the 873,000 sold worldwide. It is predicted that sales of electric and hybrid vehicles will increase to reach 10.6 million by 2025.
New industries could be created thanks to the rise of electric vehicles
Traditional European carmakers will be feeling the pressure from these reports. The move to electric vehicles gives a bigger share of the market to North American and Asian manufacturers who have already taken steps into EV development. But the report also highlighted opportunities for carmakers and the associated industry. Manufacturers who make components for electric motors will see increased demand. More electric vehicles might also see the industry develop into new markets away from the product into services. The way Europe moves from its traditional fossil fuel dependent industry to an electric vehicle dominant market will be key for established businesses to survive the trend. Governments need to be prepared to adapt to the changes and assist consumers and businesses alike to move to the future.
Sources: ING, Futurism, Forbes