Combine that observation with the IEA statement that global EV adoption increased 25% year-to-year in 1Q24 and it appears that locations that allow Chinese-priced BEVs are being electrified pretty quickly.
The conclusion then is that ICEs and hybrids are on borrowed time. They are viable only until BEVs of comparable performance are price competitive without subsidies/incentives. It is likely that this point will be reached within two years by at least Tesla and BYD.
Maybe.
Although you use the term “locations that allow Chinese-priced BEV’s,” the reality is that most of the global sales growth is happening in China. YoY global EV sales YTD (through July) have gone up about 23%…but global EV sales ex-China have only risen 11%. Because Chinese sales have risen 32%. The Chinese EV market is heavily subsidized, both for consumers and for producers. Rest of world sales are rising, but pretty modestly.
It’s worth noting that the current explosion in Chinese EV sales is being driven by PHEV’s, not BEV’s. Last year YTD the split in Chinese NEV was 70/30 in favor of BEV’s over PHEV’s; that’s fallen to 58/42 YTD in 2024.
Sure, but ex-China includes Europe and the US who are imposing big tariffs on Chinese cars. According to the IEA link:
In relative terms, the most substantial growth was observed outside of the major EV markets, where sales increased by over 50%, suggesting that the transition to electromobility is picking up in an increasing number of countries worldwide.
Also worth noting that this is also mostly price driven. It is not because of a continuing love of internal combustion but more a case of how to buy an affordable SUV.
“The cheaper upfront cost of PHEVs when compared to BEVs and the availability of a fuel tank that eliminates range anxiety were among the main reasons for high PHEV demand.” PHEVs are available in different body types, like sedan, SUV and crossover. Buying mid-priced PHEVs is a more logical choice for consumers since their prices are comparable to or lower than most of BEVs. In this category, PHEVs with the SUV body type is more in demand. https://www.counterpointresearch.com/insights/global-ev-market-q1-2024/
This again is simply a question of when the next generation of batteries get mass produced and made broadly available to car manufacturers combined with the continued expansion of charging centers. All this is happening rapidly.
Nonsense. Even at comparable prices there is a substantial cohort of consumers - I would put it at 50% - who will be dragged kicking and screaming into having an EV. I’ve talked to a lot of them. Until the price is really advantageous , and until there are charging stations on every block that kind of quick uptake just isn’t going to happen.
Eventually? Yes. But even the EV enthusiasts I know still want an ICE car (or hybrid) in the garage because of range.
Not really a chance. They may get close, but it will take many years before they win over consumers in numbers big enough and fast enough to matter. The gas car is a heavily inbred societal meme, and it’s not gonna die easily. Maybe if gas suddenly spikes, or if the price declines accelerate another 100%, but otherwise, slow down. Join the reality crowd. It’s easier to breathe in here.
The boomers are exiting stage left. The younger generations aren’t so close minded or so wedded to carbon monoxide.
Somewhat. There are still differences in fueling that will drive a fair amount of consumer behavior, especially for drivers that do not have access to at-home charging.
But certainly cost is an extremely important factor. A typical BEV is more expensive than a typical ICE car in the same market segment.
Sure. If batteries get materially cheaper in the short term, then you’d probably see more uptake of EV’s in the short term. How much more is uncertain. Even though battery prices have already gone through their massive drop in costs as economies of scale kicked in:
…we still see that BEV’s are still significantly more expensive. I know you’re confident that there’s going to be a step change in battery costs with some new technological advancements coming on line soon - but there’s many a slip between cup and lip, as Tesla has found out with the difficulties in bringing dry coating from promising lab technique to full industrial manufacturing. We’ll see.
I am pretty sure your chart doesn’t show what you think it shows.
Each age group is roughly 15 years wide, plus or minus. And each one moves up in “likely purchase” by about 10%.
So… if we wait 15 years then we will see some minor uptake in EV desirability? Seems like a long time for someone who is predicting that they’re about to swamp the market almost overnight. (Especially if you consider that most ICE cars sold over the next 15-30 years will still be on the road for another 20 years after that. )
To put a pencil to it, if we wait another 15 years for boomers to die, we’re in 2040. And then 42% of the following group has EV intention, still not even a majority? Phew.
Frankly, I’m more optimistic than your chart seems to indicate. Just not as wild-eyed innocent as your text proclaims.
Which is why I pointed out to Bt that, per his link, overseas sales from China of EVs (combined hybrids and BEVs) were only 8%.
DB2
Both BYD and CATL announced early this year that by the end of 2024 they will have lithium iron phosphate batteries at about $57/kWh.
Both companies have been pretty good at following up their announcements with products within a few months of the stated deadline.
You don’t get it. The last few posts have been about the importance of sales price on “EV desirability” so consider what I wrote from that context. There are no good BEVs selling below $30K in the United States so I actually find it remarkable that such a high percentage of younger adults still plan on buying an EV.
Once the price of BEVs reach parity with ICE/hybrids the percentage who will want to buy BEVs will rise precipitously. That’s been empirically demonstrated many times and in many places. Consider for example luxury cars in the USA.
BEVs continue to be popular in the luxury vehicle segment, maintaining about one-third of luxury LDV sales from 1Q23 through 1Q24. Of all BEV sales in 1Q24, 8 out of 10 sales were luxury models, https://www.eia.gov/todayinenergy/detail.php?id=62063
In the US, the good BEVs are all priced at the luxury class level and they turn out to be very competitive with luxury ICEs. A third of US luxury car sales are BEVs despite the relatively small number of available models, range anxiety, lack of charging stations, etc. A 33% adoption in 2024 is pretty impressive, especially since there are still a number of states that prevent the direct sale of Teslas, the most popular BEVs.
There has yet to be a serious attempt to sell BEVs to the US mass market. This will occur in the next couple of years, at least by Tesla. BYD too if it gets a chance.
I see there is a need to spell things out for you. The Boomers are the last of a demographic where cars had a romantic connotation, symbolizing freedom, power, status, etc. Big, noisy engines and fancy styling used to be desirable. As the Boomers ride off into the sunset, Nascar is once again becoming just a regional attraction as cars are increasingly seen by younger generations as just a transportation tool. They prefer the utilitarian SUV form over that of sport and muscle cars. Fuel efficient aerodynamics over ornamental tail fins and spoilers. Energy efficiency matters more than horsepower, hence complicated hybrids outsell pure ICEs.
Once price parity at the mass market level is reached, the younger generations will choose the far more efficient, quieter, and cleaner BEV over the alternative power trains.
Again, I ask where those numbers come from as they are not in the link. The 8% only applies to BYD, which is dominating the China market. As a result, other Chinese car manufacturers are being forced to export. In 2023, China exported about 12% of its EVs. In 2024, this is more likely closer to 20% and rapidly increasing as Chinese EV exports have gone up 160-fold from 2019-2023. Q&A: The global ‘trade war’ over China’s booming EV industry - Carbon Brief
Chinese EV companies are targeting Latin America.
https://www.reuters.com/business/autos-transportation/brazil-surpasses-belgium-top-export-market-chinese-evs-hybrids-data-shows-2024-05-27/
Chinese EV companies are beginning to dominate the rest of southeast Asia, supplanting Toyota in places like Thailand.
Over 70% of EV sales in the region are from Chinese brands, led by BYD," he said. In the first quarter of last year, 75% of all EVs sold in Southeast Asia were made by Chinese car makers. https://www.reuters.com/business/autos-transportation/chinese-automakers-retain-grip-over-southeast-asias-booming-electric-car-market-2024-06-21/
Well, it’s a few months from the stated deadline. They had said middle of this year, and it’s mid-September. Have they started selling the cells at that price yet?
Depends on who you read. Bloomberg states back in July 2024,
Pack-level prices for the most-sold battery chemistries have been below the often-referenced $100/kWh benchmark in China since October 2023, and LFP pack prices are now at $75/kWh. At that price, EVs can be priced at or below combustion cars in most vehicle segments, marking a huge shift. China’s Batteries Are Now Cheap Enough to Power Huge Shifts - Bloomberg
$75/kWh is getting pretty close and suggests that reaching the $50 level may only be a matter of scaling up.
S&P Global states:
According to the battery price model at S&P Global Mobility, the price of LFP batteries in China has reached $52 per kWh in 2024, which is approximately 25% lower than the price of NCM811 batteries. This significant reduction has enabled price parity between BEVs and internal combustion engine vehicles in China, marking a major milestone in the e-mobility transition. BriefCASE: South Korean companies eye low-cost LFP battery market | S&P Global
It wouldn’t be a shock if these batteries are first available to Chinese customers. The big question is whether Tesla will be able to make these CATL batteries for anywhere near that price at its Nevada and Berlin gigafactories, which would then allow cheap BEVs to be made/sold in the US and Europe.
Tesla’s US battery manufacturing will be greatly assisted by the IRA tax credit amounting to $35/kWh. This combined with the use of CATL manufacturing expertise should allow Tesla to build a profitable $25k BEV even if it takes some time to reach CATL-level battery manufacturing efficiency and scale.
Interesting. Thanks for the link.
I’m not at all convinced this is true. The boomers (more than a third of whom are already dead) typically still buy sedans. It was the next few generations that strongly switched to buying SUVs and pickup trucks. I’m a boomer and I can’t think of a single friend of mine that owned a pickup truck. One guy owed a jeep that he actually used for offroading (he once took me on an off roading trip in lots and lots of mud, we had to hose everyone and everything off after that) but he sold it after 2 years. Those of us that had children a little later than usual switched from sedans to minivans for 10-15 years. But the current generations of people with kids wouldn’t be caught dead in a minivan, they need a large SUV or truck. And sure enough the sales of minivans has cratered with the generational switch.
This is a terrifying number for ICE.
Generational Trends in Vehicle Ownership and Use: Are Millennials Any Different?
Knittel and Murphy
“We find little difference in preferences for vehicle ownership between Millennials and prior generations once we control for confounding variables. In contrast to the anecdotes, we find higher usage in terms of vehicle miles traveled (VMT) compared to Baby Boomers.”
DB2
Choice of vehicle form factor is a different issue. My point is that regardless of the vehicle type that happens to be in vogue, the younger generations will be more open to an electrified version than Boomers. There was a time when people loved the roar of a V8 engine. Not so much these days.
There is a clear generation gap in EV interest.
Generations Y and Z are the generations with the most consumer interest in electric vehicles, as evidenced in a June 2022 report by Ipsos, stating: “Almost three-quarters of Generation Y/Z consumers say they are willing to consider a battery electric vehicle for their next purchase. In stark contrast, less than 30% of Boomers share this same sentiment. To complicate matters further, interest among Gen Y/Z buyers has actually grown more in the past three years than for Boomers. In other words, this gap between younger and older buyers is widening.” EV Adoption Generational Divide: Brand Preferences & Market Dynamics
And again, this generational shift is happening despite the absence of a competitive and profitable <$30K BEV in the American market. The power of Tesla…
The primary factor holding back BEV adoption in the younger generation of Americans is upfront cost. If one believes that price parity at the mass market level is soon to come, then the future of ICEs would seem to be pretty limited. I believe ICEs will soon be a niche market, with new sales limited to rural big truck buyers and muscle car enthusiasts.
