Fact Sheet: Electric Vehicles Are The Future
The automotive industry is already rapidly shifting to an electric vehicle future as costs fall and consumer interest is on the rise.
Interest In EVs (And Concern For The Climate) Is Rapidly Growing
At the start of 2021, nearly 40% of U.S. adults reported they are likely to purchase an all-electric EV in the next decade. By December 2021, that number increased to 51%, with even 40% of Republicans and 43% of Baby Boomers looking to switch. In recent years, Americans have become increasingly concerned about climate change, which is exacerbated by the use of gasoline-powered cars. In comparison, EVs emit less climate pollution, even when powered by mixed sources of electric power and accounting for the emissions of manufacturing.
In 2012, some 130,000 EVs were sold worldwide. Today, that many are sold in a single week. Globally, EV sales reached 6.6 million in 2021, doubling 2020 sales and tripling 2019 sales, and in the U.S, EV sales more than doubled in 2021 to surpass half a million. The share of EV sales is projected to grow, outpacing traditional cars in the next two decades. 20% of global car sales are expected to be electric by 2025, over 50% by 2030, and nearly 60% by 2040.
The Auto Industry Has Shown It’s Ready For EVs, Making Significant Investments In New Technologies And All-Electric Models
Nearly every automaker wants to get in on the EV revolution; every major manufacturer now offers fully electric or hybrid car models, and several plan to cease production of gas- and diesel-powered cars entirely within the next 20 years. This year, the number of EV models available in the U.S. is expected to increase to at least 100, from 62 in December of 2021. The world’s biggest automakers, including GM, Ford, Volvo, and Volkswagen have made bold commitments towards transitioning to EVs, and in the coming years, automakers plan to launch production for all-electric CUVs, SUVs, motorcycles, vans and trucks.
Gas-Powered Cars Are On The Way Out, And New EV Technologies Are Improving Auto Travel
26% of U.S. adults report they are not likely to purchase a gas-powered car in the next 10 years, and as climate change worsens, EVs will become increasingly cheaper and more reliable. EVs generate much more torque than gas vehicles, eliminating the need for a traditional transmission in many modern designs, and are also quicker to start.
EVs Are Already Reaching Price Parity, And Prices Are Set To Drop Further
EVs aren’t actually more expensive when stacked up against their comparable combustion engine counterparts. A 2020 analysis found that after factoring in fuel and maintenance costs, EV owners end up saving $6,000 to $10,000 over the vehicle’s lifespan. A 2021 analysis showed that the average cost of EV maintenance in the first three years is $77, significantly lower than the $228 average for gas vehicles. Several EVs are priced at under $35,000, less than the average price of a new conventional car, and tax credits and rebates can help customers offset initial upfront costs.
The higher upfront cost of EVs is largely due to the cost of EV batteries, but prices have decreased significantly and are predicted to drop further. Over the last ten years, a surge in production of lithium-ion batteries has led to an 85% price drop for battery packs used in EVs, making them more commercially viable. Global average battery prices fell 6% between 2020 and 2021. And by 2024, production efficiencies are set to make EV batteries drop below the 2020 price of $100/kWh, which is considered an industry benchmark for EVs reaching price parity with internal combustion engine vehicles. Automakers like GM are investing billions in production facilities to produce battery cells for EVs, and dozens of new models of pure battery EVs are set to debut by the end of 2024. In addition, EV powertrains are expected to reach price parity with internal combustion engine powertrains by 2030, further reducing the cost of EVs.
With gasoline prices nearing $4.50 a gallon across the country, a big draw to EVs is the significantly lower cost of fuel. As of 2018, the typical household in the U.S. spends almost $1,330 per year on gas, which represents about 9% of household income for lower-income households. EVs are already displacing more than 1 million barrels per day of oil demand, with potential to cut 21 million barrels of demand by mid-century. EV fueling costs are 50 to 75% lower than for conventional vehicles, producing lifetime savings of about $12,000 for owners. Despite regional variances in gas and electricity costs, research shows that charging a vehicle is more cost effective than filling up at the pump across 50 major U.S. cities. In addition, EVs typically charge at night when electricity is cheapest to generate, and by balancing the demand for electricity, EVs decrease the average cost of electricity and reduce overall rates.
EVs Can Even Help In Stabilizing The Grid
In the coming years, “vehicle to grid” charging could allow EV owners to make money simply by charging their car. Through V2G, by tapping into batteries that are plugged in and not in use, power companies could pay consumers to send energy back into the grid to handle sudden spikes in electricity demand. This extra electricity can reduce the usage of fossil-fuel powered generators, thereby offsetting costs and environmental impacts of energy generation. Initial studies estimate that EV owners can make between $300 and $500 per year through V2G, with possible revenue of up to $5,000 through participating in “spinning reserves” generation.