Ladies and gentlemen, start your batteries.
Sure, we’ve been hearing about the advent of the electric car for a long time. But evidence is mounting that it has already arrived — ahead of schedule.
Consider this: General Motors announced in January that it will stop manufacturing gas- and diesel-powered cars by 2035. This after Volkswagen, Europe’s largest automaker, disclosed plans to invest $86 billion to develop electric vehicles, digital factories and self-driving cars over the next five years.
Furthermore, in 2020, investor enthusiasm for electric vehicles (EVs) briefly sent Tesla’s market value soaring from $100 billion to $800 billion, making it more valuable than the nine largest traditional automakers combined. Tesla, which sold just under 500,000 cars last year, expects sales growth of 50% a year.
The International Energy Agency expects global EV sales to rise 28% a year over the next decade. But with emissions standards tightening worldwide and EV costs becoming increasingly attractive to consumers, those estimates may be too conservative, says equity investment analyst Kaitlyn Murphy.
“New developments will potentially make EVs cost competitive not only with new gas-burning cars but with the entire fleet of cars on the road, including used cars,” says Murphy, whose research responsibilities include U.S. automobile and components makers. “That’s about 270 or 280 million vehicles in the U.S. If you take a long-term view, that suggests there could be much stronger growth than the market expects.”