EVs Will Start To Take Over Sooner Than You Expect
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The first automobiles were made in the late 19th century, and Ford's first vehicle—the Model A—debuted in 1903, so the car industry has been around for well over a century. But the dominance of gas-powered vehicles is coming to an end as cars powered by alternative methods grow in popularity.
The biggest segment of vehicles powered by something other than gas are electric vehicles (EVs). It's only been in the last decade or so that EVs have entered the mainstream market.
Although they still often have a premium price tag, people are increasingly choosing EVs when making a car purchase—and they're selling at such a strong pace that the EV takeover may happen sooner than you expect.
The electric vehicle takeover is happening faster than expected
Bloomberg explains how EVs are selling at a rate faster than previously anticipated. The publication reveals that consultant Ernst & Young expects EV sales to begin outpacing vehicles powered by fossil fuels in the world's largest auto markets in 12 years. That estimate of 2033 is five years sooner than what was previously expected.
Beyond then, EV sales will only continue to grow and consume an increasingly larger piece of the car industry. Using an AI-powered prediction tool, Ernst & Young projects that by 2045, non-EV sales will account for less than 1% of the industry's sales globally.
Strict mandates are driving demand for EVs
One of the major factors driving sales is strict government mandates to fight climate change. That is especially true in Europe and China, where there are rising financial penalties for selling and buying cars powered by traditional methods, including gas and diesel.
The U.S. lags behind those areas in EV mandates because the country's fuel-economy regulations were eased during the Trump administration. That is changing, though, as President Biden has been firming up regulations since taking office in January. Biden has rejoined the Paris Climate Accord and has proposed spending $174 billion to speed the shift to EVs.
According to Ernst & Young, Biden has "ambitious targets" in that area, so his administration is expected to be a big contributor to EVs gaining a stronghold in America.
The EU is expected to lead sales of EVs for a while
Ernst & Young sees Europe as being the global leader in EV adoption for quite a while to come. Zero-emission models on the continent are expected to outsell all other propulsion systems by 2028.
That same inflection point isn't projected to hit China until 2033, and the U.S. is on pace to reach that milestone in 2036.
Consumers are being drawn to EVs
There is also a growing appetite for EVs among consumers who are excited about Tesla's Model 3 as well as upcoming releases from legacy automakers like Hummer and Ford. Consumers want EVs, and manufacturers are giving them the vehicles, with more than $230 billion invested in battery-powered models.
Ernst & Young credits consumer enthusiasm with EVs to the hopeful and exciting outlook of the future of EV vehicles. Couple that with government incentives, and you get increasing demand for the vehicles, especially among millennials.
Those consumers in their late 20s and 30s are eschewing ride-sharing and public transportation in favor of car ownership, and a third of them want to drive an EV.
Whether you have an EV or a traditional gas-powered car, you need car insurance and want to get it for as low of a price as you can. Jerry can help you find cheap car insurance for your vehicle.