GreenBuzz: Clocking the EV transition

By Katie Fehrenbacher

GreenBiz Senior Writer and Analyst

As Microsoft co-founder and billionaire philanthropist Bill Gates has opined: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10.” The oft-repeated quote has been rattling around my head this week as I’ve been thinking about the wide range of projections for electric vehicle sales over the next two decades.

This week, Bloomberg New Energy Finance updated its outlook for electric vehicles and predicted that 80 percent of the world’s city bus fleet and 33 percent of the world’s cars will be electric by 2040. The research firm has one of the more aggressive outlooks on EV sales and penetration out there.

In comparison, the Organization of Petroleum Exporting Countries (OPEC) has projected that 12 percent of global vehicles will go electric by 2040. Oil nations, of course, have an incentive for this transition to happen slowly. But the International Energy Agency (IEA) also has estimated a slower transition, with 8 percent of the global car fleet going electric by 2040.

I can see why such organizations are looking at electrification so conservatively. Electric cars have been around a century, and as recently as a decade ago haven’t been taken seriously.

But now that the price of lithium-ion batteries has dropped dramatically, electric cars are supposed to have the same upfront price as internal combustion cars by 2024, according to BNEF. They’re already cheaper to operate and maintain in certain circumstances (like for city bus fleets).

The oil industry has woken up to the electrification transition. Behemoths like BP have their own predictions (15 percent by 2040). However, the oil industry doesn’t seem to envision a severe disruption coming. It expects more of a long-standing gradual plateau and an eventual decline in global oil consumption.

For others, the transition appears much more rapid and disruptive. In response to the new BNEF figures, the CEO of electric bus company Proterra, Ryan Popple, tweeted out that while the report was great work, the 2030 estimates were probably 16 points too low. And likewise, Proterra benefits if the EV transition happens much more quickly.

I’ll be moderating a debate about what the transition from the internal combustion engine to the electric vehicle will look like between Popple and the president of the Western States Petroleum Association, Catherine Reheis-Boyd, on Thursday morning in Redwood City, California. If you’re interested in hearing a lively discussion about how swiftly, or slowly, this transition will occur, come on down and hang out with us.

And before you do, check out these stories below.