Electric Cars – Widespread Adoption is Closer than Most People Think
Most drivers worldwide accept the fact that electric vehicles make a lot of sense. Yet only a small number buy them because of cost and concerns about battery range and charging times. These are significant obstacles, but most will disappear within the next decade according to most experts. At that point, the economic and environmental case for electric cars will be irrefutable.
The relatively high costs of manufacturing electric cars and their batteries together with current battery range limitations will gradually disappear. The firsts two are a “chicken and egg” problem: Electric cars have far fewer parts and are much less technologically complex than cars driven by internal combustion engines (ICE). They should be much cheaper to produce than ones with ICEs, but they’re not. That’s because they’re produced in much smaller numbers and so don’t benefit from economies of scale. On the other hand, the production of electric car batteries is beginning to benefit from economies of scale. For at least a decade, their cost has come down every year as companies worldwide increase production to meet the demands of not just the automotive industry, but also of the emergency storage industries and others. In January 2017, electric car batteries were nearly 70% cheaper than they were in 2010. They still don’t store as much energy by weight as gasoline does, but the gap is narrowing fast.
Because they have fewer moving parts, electric cars are cheaper to service. That’s bad news for traditional car dealers, whose bottom line relies on servicing and replacement parts as well as sales. As a result, many dealers don’t promote electric vehicles, and some actively dissuade customers from buying them. The supply chain of dealers, ICE makers, and vehicle parts manufacturers form a powerful, worldwide, and long established, lobby group.
Traditional car manufacturers are understandably conflicted. They know that the future will be electric, but that the present is decidedly gasoline. Many are hedging their bets and make both gasoline powered cars and electric ones. Some make hybrids – cars driven by both electric motors and ICEs. This multiple strategy is costly, but competitive forces give them little choice. Some of the most threatening competition comes from new entrants like Tesla. They’re developing products from the ground up and are not hampered by legacy issues. Their investments are big, but the potential rewards huge. Many of these newcomers don’t sell through traditional car dealerships, but through new dedicated retail outlets. Some sell cars online. They make their products attractive to customers through comprehensive warranties that address known customer concerns about electric cars and batteries.
To most people the cost of any kind of car is significant, so they won’t rush to adopt an unproven technology. They’ll wait for the problems to be resolved. When the price comes down and the battery issues are largely addressed, more will put their money on electric cars. Sales will be slow at first, but as customers give positive feedback, they will accelerate. The tipping point will be when the cost of a new electric car draws level with that of an ICE car. That will happen sometime between 2025 and 2030 according to a Bloomberg New Energy Finance report published in 2017. They predict that consumer sentiment will then rapidly change, and electric cars sales will take off.
“Our latest forecast shows sales of electric vehicles (EVs) increasing from a record 1.1 million worldwide in 2017, to 11 million in 2025 and then surging to 30 million in 2030 as they become cheaper to make than internal combustion engine (ICE) cars. China will lead this transition, with sales there accounting for almost 50% of the global EV market in 2025.”
The spread of electric cars will benefit humanity in general by displacing gasoline and diesel powered cars, which contribute greatly to global greenhouse gas emissions and urban air pollution. In addition, electric car owners will see a significant drop in their transport costs. The electric car’s arrival can legitimately be described as a win-win development for just about everyone.
Three microcap companies in our crosshairs exploring for Lithium and Cobalt, key elements needed in batteries for electric vehicles:
Zenith Minerals – The shares are traded on the Australian Stock Exchange, trading symbol: ZNC at $.19 AUD. The Company’s main focus is advancing its project portfolio of high-quality lithium, gold and base metals projects. (Zenith and Bradda Head are joint venture partners on various projects.)
Bradda Head – The vision of Bradda Head is to create value for shareholders through the acquisition and development of world class lithium deposits and resources. The company is still private and will soon transition to publicly traded. Bradda Head is backed by UK billionaire Jim Mellon.
Global Energy Metals positioning itself as a leading cobalt explorer and developer in the famed Mt. Isa mining district in Queensland, Australia. The shares are listed on the TSX Venture – GEMC-V $.10 CAD, OTC US – GBLEF and Frankfurt – 5GE1-F.
Wishing everybody a great weekend!
The IBR Team
Dr. Anna, David and Jeff