EV Sales and the End of the Internal Combustion Engine

Internal Combustion Engines (ICE) have served us well for some 160 years, powering our cars, planes, ships, and more. Karl Benz had the patent for the world’s first car powered with a gas combustion engine in 1886. Today, however, ICE cars are nearing extinction, obsolescence is on the horizon. Powerful and macho — they don’t work well in a carbon-conscious world. Internal combustion engines have four strokes: intake, compression, power, and exhaust. The last spells their demise. Meanwhile, Bloomberg NEF reports that the cost of batteries for electric vehicles (EVs) has dropped 87% from 2010 to 2019. The writing is on the wall as one technology falls and the other rises.

Chevy Bolt Leading a New Generation

GM wants market share in the growing EV space, and is no doubt keen on tackling Tesla while fending off other EV upstarts including Rivian. GM produced its first “long-range” battery electric vehicle in 2016, the Bolt. It has been competing nicely with the Tesla Model 3; the Bolt being sold at less cost while offering similar performance.

GM is working in partnership with LG Chem to drive down costs further. By opening a new plant in Ohio to manufacture its new Ultium batteries, GM hopes to cut the costs of its Bolts by another $4,000.

GM is not the only car maker making bold statements: In early February, Ford announced that it will invest $29 billion in EVs and autonomous vehicles by 2025. It too aims to compete with Tesla in the race to bring EVs into the mainstream. By 2030 Ford will only produce all-electric and plug-in hybrid vehicles. An electric version of Ford’s cash cow, the F150 pickup truck, will go into production next year.

More Automakers Make All-Electric Pledges

Other automakers are moving away from ICE. Bentley laid out a target date of 2030 to switch entirely to battery electric vehicles. Nissan will electrify all vehicles by the early 2030s. In early February, Jaguar announced that it will only produce electric vehicles by 2025. Its owner, Indian Tata Motors, reportedly hopes the move to all-electric will turn around the struggling 86-year-old car company’s fortunes.

The end of ICE is being driven by technology and policy. EVs are fun to drive and are more and more affordable to buy. There are many models available. They are low-cost to operate and require no maintenance. Their growth and speed of their adoption, however, are still dependent on government decrees. At the beginning of 2021, there were 31 national and local governments that had announced bans on the sale of cars with internal combustion engines. A list compiled by Charged Future runs from Norway to South Korea, Slovenia, and India. Some governments regulate fleets, other regulations are just for new vehicles. Norway will ban ICE cars by 2025; the United Kingdom, Iceland, Ireland, Sweden, and the Netherlands by 2030.

American states with ICE bans include California, Colorado, Washington, New Jersey, and the District of Columbia. There will be more to come. All these above are reactions to the climate imperative – to clean our tailpipes – and to the sharp rise in EV sales and Tesla’s success.

Global EV Sales Surge

In 2020, global EV sales surged despite a drop in overall sales of passenger cars. According to the market research firm Canalys, EV sales jumped 39% globally. At the same time, sales of passenger vehicles dropped by 14%. EVs are now almost 5% of all new car sales globally. Europe was responsible for much of this growth in 2020.

According to EVVolumes.com, 2020 was a banner year for plug-in electric vehicle sales, with sales increasing from 2.26 million in 2019 to 3.24 million in 2020. These values include Battery Electric Vehicles (BEV) and Plug-In Hybrid Electric Vehicles (PHEV). Europe is the leading region, taking 1.4 million units, 137% more than in 2019. This growth was due to attractive models, incentives from green recovery funds, the European Union’s “95g CO2 mandate” for average fleet emissions, much improved EV availability, and intense promotion of EVs.

Now, let’s look at the share of the market. What percentage of total sales were EVs? Overall, sales of BEVs and PHEVs made up 4.2% of the global car market, up from 2.5% in 2019. In Europe, EV sales were 10.2% of the market, up from 3.3% in 2019. In China the EV share rose from 5.1% to 5.5%. Meanwhile, in the United States, EVs were 2.4% of new car sales, up just 4% from 2019. U.S. EV sales did nevertheless outperform the overall American auto-market, down 15% year to year. Analysts suggest that this was mostly due to the introduction of the Tesla Model Y.

The world’s largest EV manufacturer is Tesla. In the first quarter of 2020 it had a 29% market share. It was followed by Renault-Nissan with 13% of the market share, Volkswagen Group (11%), and BYD (6%). Tesla’s Model 3 has been the world leading EV, but Model Y sales last year equaled Model S, X, and 3 sales combined.

All told, Tesla delivered 499,550 vehicles in 2020. It has new factories in Austin, Texas, and Brandenburg, Germany. It is boosting production with eight massive casting machines. Tesla is going big and building all-electric, semi tractor-trailers. It is also going small, developing the Model 2, a compact hatchback with a price that may be as low as $19,000. There are rumors that Model 2 steering wheels will be optional.

Ted FlaniganrunsEcoMotion, a California-based company with the mission of the cost-effective greening of cities, corporations, and campuses. He has dedicated his career to finding win-win solutions that create financial and environmental benefits while fostering a sustainable society. Connect with Ted onFacebookandTwitter, listen to The NetPositive Podcast, read all of his MOTHER EARTH NEWS posts here.

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