The EV market is growing YoY (Year over Year). The industry is currently valued at $287.36 billion, which is a $40 billion increase from 2020. The industry is expected to grow to over $1.3 trillion in 2028. More than 6 million plug-in EVs are sold yearly.
The three major markets all have grown significantly between 2020 and 2021: Europe’s plug-in EV registration increased with 66%, the US almost doubled (96% growth) and China managed to increase its registrations with a whopping 155%! Electric is hot...
But not everywhere in the world EVs are already in popular demand.
Going green Down Under
After a slow start Australia is finally embracing electric vehicles. With only 2% of national EV sales, Australia is far behind most developed countries. Neighbor New Zealand for example has EV sales up to 10%. Australians continue to spend record amounts on petrol. The spending on transport in the country recently increased by 35,4%. This increase is mostly driven by the rising fuel costs as a consequence of the geopolitical situation in Europe. With current petrol prices (late August 2022), driving an electrical vehicle is 97,96% cheaper than driving an equivalent petrol fueled model. The initial purchase costs of an electric vehicle might be higher but over time the electric vehicle wins (big time). Especially when paired with solar panels, electric vehicles have fewer parts, need fewer repairs and need less servicing.
Financially, there are more than enough reasons for Aussies to start embracing electric vehicles and luckily the message from Australia’s first Electric Vehicle Summit in Canberra last month was exactly this. Australia is starting to embrace electric driving. They might have had a late start but it’s never too late to join the EV party. With Sweden as one of the best examples, they increased EV sales from 18% to 62% in just two years, Australia seems to be formally on a mission to go green.
The government is now in the lead of giving Australians the chance to access the world’s most innovative transport technology. The state is supporting the EV transition with $21 million. The goal is to reach a 25% EV target for light and small passenger cars and for small and medium SUV government fleet vehicles by 2025/2026. With this investment the government also wants to improve the level of awareness and knowledge for all stakeholders.
As an example, standards and guidelines will be developed, and EV charging infrastructure will be created to facilitate easier traveling. Charging stations will be placed at 49 locations across the state. The installation is planned to start in November 2022 with the network being fully operational January 2024.
There seems to be a strong uptick in consumer interest, as one of the big car dealers mentioned that half of the customers coming in, enquire about EV’s.
The Golden State of EV
On the spectrum of EV adoption Australia could learn a thing or two from California.
The Golden State dominates America’s EV registrations. Last year, 38% of the country’s EV sales were in California, about six times as many EVs as Florida, the State that is second on the list.
But California has now decided to take things to a new level with a very comprehensive set of rules for a complete ban on new gas car sales from 2035. Their regulations could serve as a model not just for the rest of the US, but also for the rest of the world governments. That being said, there's been a lot of push-back on these regulations: 17 States have sued in federal court to block the move.
Besides the ban there are many other incentives, such as warranty, durability, serviceability, streamlined charging, and battery label requirement. Some examples are: 1) EVs must come with a charging cord, 2) Adapters must be available for standardized public chargers, 3) Used vehicles must have battery health metrics so buyers know what they’re getting, 4) Batteries must hold 70% of range for 10 years/150K miles (80% after 2030 model year), 5) Warranties must guarantee 70% of battery capacity for 8 years/100K miles (75% in 2031 model year) and 6) EV repair information must be disclosed to independent repair shops.
Some cars will still be allowed with gas engines, in the form of plug-in hybrid vehicles. Up to 20% of the cars in 2035 can still use gasoline, but will be regulated to strict standards.
The regulations will start phasing in gradually over the next decade. In 2026, 35% of the new cars must be electric. From there it will go in a linear line to 100% in 2035. It’s expected that the regulations will cut emissions by 50% from 2026 to 2040. It will also result in less smog-forming and avoid $13 billion in health costs and avoiding thousands of deaths and ER visits.
It will be interesting to see how this plays out, especially given the current macro climate + widening energy crises in Europe and other macro factors.
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