The end of the internal combustion engine has begun

The world reached a milestone for transportation in 2017, although most people would not have noticed it at the time. In that year, consumers bought more than 85 million cars, a sales volume that dropped in 2018, and again in 2019, and then dropped in 2020 due to Covid-19. Meanwhile, sales of electric vehicles rose, and rose again, making EVs the only growth market in the automotive industry – and that meant we almost certainly reached sales of cars with internal combustion engines four years ago. The future looks even more electric, according to BloombergNEF’s annual electric vehicle forecast. The report is full of bold conclusions. For the first time, it sees mostly electric vehicles sold by the 2030s and mostly electric vehicles by the 2040s “- and this is just the normal situation. In a net release world, EVs will account for 100% of passenger vehicle sales just 15 years from now, with all the other classes of road vehicles “from two-wheelers to heavy commercial trucks”, fully electric or powered by the early 2040s. Creating these kinds of scenarios is important in our current moment when more and more businesses are committing themselves to a net zero path. Also important: to describe where we are at present. Electric cars get a lot of attention, but it’s just one type of now electrified road vehicle. Last year, EVs accounted for more than 4% of total passenger car sales and no more than 1% of the commercial vehicle market. Meanwhile, electricity accounted for 44% of electric two- and three-wheel sales, and 39% of bus sales. Just as efficient as modern car factories are, they cannot keep up with an e-scooter factory targeting 10 million units per year. Staff cars still have a long way to go to catch up. That said, I do not want to reduce the pace of change so far. The total sales value for new cars exceeded $ 2 billion last year, even with a large decline in sales. EVs are already an annual venture of more than $ 100 billion, with a striking growth rate.

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In 2011, motor vehicles accounted for 0.1% of total passenger car sales, but BNEF thinks that by 2023 it could be 10% of sales, an increase of 100 in a little over a dozen years. I like to think of fast-growing markets in exponential, not linear terms, and once EVs pass 10% of sales, they are in the last exponent of the passenger car market. At that point, they are not playing for a part of the market, but for everything. It is worth thinking about the upcoming growth in motor vehicle vehicles from a business perspective. There comes a range of new models, many from centuries-old car manufacturers. Some of them are old brands on new vehicle types, such as Ford Motor Co.’s Mustang Mach-E, which is already being manufactured more than the name of the internal combustion engine. But more of the novice EVs are comparable to existing combustion models. I am thinking in particular of the best-selling vehicle in the United States of America over the past four decades, the F-150 and its electrified double, the F-150 Lightning. Once it hits the market next spring, a few things could happen: it could yield regular F-150 sales; it can contribute to other major manufacturers’ truck sales; or it may record sales of other vehicle classes “SUVs”. We already have data on how one company can develop comparable models with different driving forces on the sales front: Porsche. Porsche does not have many models ” – most have been sold for years or decades ”, and therefore the new launches could possibly compete with the existing offering. Porsche sells two SUV models with combustion (one of which is available as a hybrid), and now two sedans: the combustion (and hybrid) Panamera, and the fully electric Taycan. The Taycan accounted for 7% of Porsche’s quarterly sedan sales in North America when it was launched. Two quarters later it was just under half. In the first quarter of 2021, six quarters after its introduction, the Taycan accounted for 82% of sedan sales, even though the total sedan market grew. Porsche has managed to grow its sedan market with a new model, but the competition between its current and its new entrant is also crystal clear. The electric Taycan can push its sibling from the internal combustion engine to the rim ‘- too small a market to be worth a model refreshment. This is a competition that will soon see the global auto market across the board. electrically, and at some point the growth comes at the expense of sales of internal combustion engines.