Tony Seba, a serial entrepreneur and author believes that cost-effectiveness rather than a green revolution would make all new vehicles being bought to be electric by 2025.
Tony Seba opined these views at a Nomura investment forum.
The internal combustion engine (ICE) wouldn’t be able to compete for much longer due to the fact that the Electric vehicle (EV) performance has been improving very quickly and the prices have been falling similarly faster, Seba said.
Seba is the author of “Clean Disruption of Energy and Transportation”.
“You will soon be able to get Porsche performance for Buick prices and when you get that, neither Porsche nor Buick are able to compete,” he said.
Compared with the $33,000 current median price of a new ICE car in the U.S., the cost of an electric vehicle is expected by him to fall to about $30,000 by 2020, Seba said. He predicts that a low-end EV would be available for as little as $22,000, he predicted by 2022.
Noting that while ICE cars had more than 2,000 moving parts, EVs had about 20, making for few breakdowns, Seba said the “marginal cost” of owning an EV was essentially zero because maintenance costs were so low.
He said that rather than just a “green” choice, EVs were on track to become “the rational, economic choice” very quickly. He added that this was the reason that electric-car maker Tesla felt comfortable offering an infinite-mile warranty on its models.
Seba teaches at Stanford University and is a board director or advisor to several alternative energy start-ups.
He is not alone in expecting a quick uptick in adoption.
However the views of Seba on the speed of the shift to EVs were not shared by everyone.
Compared with 348,000 in 2015, Nomura estimated that sales of EVs globally would grow to 2.4 million units by 2020, the organization said in a research report released this month. This can be compared to the forecast of 91.54 million total vehicles that are expected to be sold globally in 2016.
While Nomura’s forecast for hybrid vehicle sales was at 4.7 million by 2020, up from 2015’s 1.7 million, it also estimated that sales of plug-in hybrids would rise from 384,000 in 2015 to 2.4 million in 2020.
Up from 0.4 percent in 2015, EVs would make up 2.4 percent of total vehicle sales by 2020, forecasts Nomura.
Consumers could be given more incentive to replace their cars even sooner than usual by the automated driving options likely to be widely adopted by 2020 in developed markets, the investment bank also noted.
However market forces alone might not be the driver for adoption of EVs. Since EVs offered other advantages, including the emission of far less pollution than an internal combustion engine, many countries have introduced incentives to buy the cars.
(Adapted from CNBC)