Why Electric Vehicles Are the Future of the Automotive Industry

May 16

For drivers, one question has become increasingly important: Should I go electric? More automotive manufacturers are developing electric vehicles, and some countries have vowed to ban sales of gas-powered vehicles. The future, indeed, seems electric.

While history is full of sharp left turns that took people by surprise, we still believe that electric vehicles are the future of the auto industry. This article aims to explain why, while analyzing some recent changes in the EV market and the current trajectory of the EV industry, especially in regard to how it compares with that of traditional vehicles.

The first question to ask, then, is…

What Is the Future of Electric Vehicles and the Automotive Industry?

While there are numerous small details that differentiate electric vehicles from their traditional counterparts, the most obvious and important is their source of energy. Electric vehicles use electricity, which can be taken from a wide variety of sources (plenty of them renewable), while traditional combustion-engine vehicles are reliant on consuming fuel (primarily fossil fuel). Despite how dependent our world has become on these fuels, the hard fact is that fossil fuels are not unlimited.

Fossil fuels are a finite resource. Eventually, we will run out, and our gas-powered cars will become expensive metal bricks. This may seem like a far-off, apocalyptic scenario, but the years of fossil fuels left on the planet is measured in decades, not centuries. Some estimates mark us as running dry by 2060… less than 40 years away.

That’s to say nothing of pollution and climate change. According to the EPA, roughly 29% of greenhouse gas emissions come from transportation, making it the single largest contributor of GHG emissions in the U.S. Cars are an even greater producer of pollutants with direct toxic effects on human health. Even were we to skirt around the hard limit of fossil fuels by switching to biofuels like diesel, pollution would be a severe problem…especially given that diesel emits anywhere between 25 to 400 times the level of many pollutants.

In other words, the need for fuel — which cannot be avoided with traditional combustion engines — spells doom for non-electric vehicles. The level of pollution they produce is untenable and even if it weren’t, we’ll run out sooner rather than later.

So the question isn’t “if” we’ll switch to EVs. The question is “when.”

When Will Electric Cars Take Over Over and Why?

It’s hard to figure out what marks the moment when EVs overtake traditional cars. Will it be when there are more EV sales than traditional vehicle sales per year? When they’re making more profit than traditional vehicles? Or when they make up more than half the vehicles on the road? Any metric used will be subject to its own problems and biases, leaving us with a vague finish line. Trying to predict when we’ll cross a hazy finish line is an exercise in futility.

Rather, we should focus on looking at the current trajectory of electric vehicles, preferably on a global scale that takes into account trends across various countries.

And in that, things are promising for EVs. For starters, EV sales increased 67% between 2019 and 2020, the same year that overall vehicle sales fell by 16%. While some of this discrepancy could be accounted for by the theory that those who can afford to buy an EV and have the desire to do so might have been more likely to have white-collar jobs capable of going remote without damaging their paycheck too much, it’s unlikely that this explains the entire gap. Some of this increase, particularly in the United States, is attributable to two things: legislative changes that make EV adoption easier, and the drastically improving technology of EVs, which continues to drive their costs down and improve their range and lifespan. This combination alleviates the three biggest concerns of potential EV buyers. In 2020, the total cost of ownership of electric vehicles finally dropped under the total cost of owning a gas-powered vehicle.

The World Resources Institute, cited above, shows that the rate of EV adoption is increasing every year, following something known as an S-curve. At the rate it's going, we could reach 100% adoption by 2040. That said, there are some recent developments that could help or hinder this.

Gas Prices

It’s no secret that gas prices in 2022 have become an enormous talking point. And they’re likely to increase, given the geopolitical climate. While it’s possible for various governments to soften this blow with subsidies, this increase in gas prices may well push many reluctant buyers toward EV adoption faster than they might have otherwise. The cause for this increase in gas prices is at the root of our next topic…

Global Conflict

Russia’s illegal invasion of Ukraine and subsequent war crimes have dominated world politics since March. One topic hasn’t gotten the attention it deserves: Russia’s oil money. Russia is an enormous exporter of oil, and oil is its largest source of revenue by a wide margin. The single strongest economic sanction we could place on Russia would be ceasing oil imports.

But it’s not that easy. Oil isn’t a commodity we can ditch, particularly during cold months. Our modern world has yet to transition to renewable resources to enough of an extent to quit oil entirely. As such, Russia has much of the world in an economic headlock.

This realization has made many recognize that dependence on oil — which is not spread equally throughout the world, meaning that there will always be countries with access to it, and those without — is a geopolitical disaster waiting to happen. Economic sanctions exist to provide an alternative to violent wars. If we remain dependent on fossil fuels, other oil-rich countries will be able to repeat Russia’s playbook, committing atrocities for which no one can hold them accountable.

As such, it’s possible that even the most conservative individuals within the political sphere may begin to push for greater emphasis on renewable energy (and, thus, electric vehicles) to avoid this problem.

Semiconductor Shortage

On the other hand, the semiconductor shortage has affected everything from hospitals to video game systems. While we’ve discussed alternative forms of semiconductors in another article, the existing shortage might still slow EV production and thus adoption.

Final Thoughts

Even assuming we didn’t want to switch to EVs, we won’t have a choice around the halfway point of this century. Optimistic estimates place the potential moment of complete EV adoption around 2040, but global geopolitics could hurry that along, or slow it. Still, the fact remains: EVs are the future. It’s just a question of when that future will arrive.