As concerns about climate change and air quality intensify, Electric Vehicles (EVs) are increasingly seen as a critical component of a sustainable transportation future.
According to the data, nearly one in five cars sold in 2023 was electric. Almost 14 million electric cars were sold and registered in 2023, 95% of them in China, Europe and the United States, bringing the total number of electric cars on the road to 40 million (IEA).
Will EVs truly fulfill their promise of being a better mobility tool to replace the internal combustion engine (ICE) vehicles? Are there other complimentary options for a mass transportation system?
The upsides of EVs
1. Environmental Benefits:
Reduced Emissions: EVs significantly reducing greenhouse gases and pollutants that contribute to climate change. When powered by renewable energy sources, their carbon footprint is even smaller.
Energy Efficiency: EVs convert over 77% of the electrical energy from the grid to power the wheels. Traditional gasoline vehicles, in contrast, only convert about 12%–30% of the energy stored in gasoline (US Department of Energy).
2. Economic Advantages:
Lower Operating Costs: Electricity is cheaper than gasoline, and EVs have fewer moving parts than internal combustion engine vehicles, leading to lower maintenance costs. An ICE powertrain consists of around 2000 parts, while battery electric vehicle powertrains have around 20 parts and sometimes fewer (CNBC). This makes them more economical over the vehicle’s lifespan.
Government Incentives: Many governments offer tax credits, rebates, and other incentives to encourage EV adoption, making them financially attractive to consumers.
3. Technological Innovation:
Advancements in Battery Technology: Innovations in battery technology are leading to longer ranges, faster charging times, and lower costs. Solid-state batteries and other emerging technologies promise even greater improvements in the near future.
Smart Integration: EVs can be integrated into smart grids, allowing for better energy management and storage solutions. Vehicle-to-grid (V2G) technology enables EVs to feed electricity back into the grid, enhancing grid stability and efficiency.
4. Enhanced Performance:
Instant Torque: EVs provide instant torque, resulting in quick acceleration and a smoother driving experience. They often outperform traditional vehicles in terms of acceleration and overall driving dynamics.
Quiet Operation: The absence of a noisy internal combustion engine makes EVs much quieter, contributing to reduced noise pollution.
The downsides of EVs
1. Infrastructure Challenges:
Charging Network: Despite rapid growth, charging infrastructure is still not as widespread or as convenient as traditional gas stations. This can be a significant barrier for long-distance travel and for people living in apartments or without access to home charging.
Charging Times: While fast-charging technology is improving, charging an EV still takes longer than refuelling a gasoline vehicle. This can be inconvenient, especially on long trips.
Electricity Supply: The rapid adoption of electric vehicles (EVs) poses several challenges to electricity supply and infrastructure, including factors related to increased electricity demand, grid infrastructure and stability, renewable energy integration, affordability and accessibility.
2. Initial Cost:
High Purchase Price: Although prices are decreasing, EVs generally have a higher upfront cost compared to traditional vehicles. This can be a deterrent for some consumers, despite the lower operating costs and available incentives.
3. Battery Concerns:
Range Anxiety: Although many modern EVs offer sufficient range for daily use, range anxiety remains a concern for potential buyers, particularly those who frequently travel long distances.
Battery Degradation: Over time, EV batteries can degrade, leading to reduced range and performance. Replacement costs can be high, though advancements in battery technology aim to mitigate this issue.
4. Environmental Impact:
Resource Extraction: The production of EV batteries requires minerals like lithium, cobalt, and nickel. The extraction and processing of these materials can have significant environmental and social impacts.
Recycling and Disposal: While EV batteries can be recycled, the processes are not yet as efficient or widespread as they need to be. Addressing the end-of-life impact of batteries is crucial for the sustainability of EVs.
Air and water pollution: As with ICE vehicles, EVs do not completely solve the problem of tire emissions.
EV trends
Although sales of electric cars are increasing worldwide, they are still heavily concentrated in a few major markets. In 2023, just under 60% of new electric car registrations were in China, just under 25% in Europe and 10% in the United States – together accounting for almost 95% of global electric car sales. Sales in emerging markets are increasing led by Southeast Asia and Brazil, but they remained low overall (IEA).
Quarterly electric car sales by region, 2021-2024
Venture capital investments in electric vehicle start-ups
Over the past century, most automotive manufacturers have typically developed ICE technology and manufacturing through in-house research and development, but now investing in start-ups has become a notable trend. This allows established companies to strengthen their own position and maintain a competitive advantage within the fast-changing environment. They are using corporate VC to fund start-ups in the development of new technologies or to acquire concepts developed by new market players (IEA).
Although VC investment in electric vehicle start-ups declined in 2023 in line with the global trend, VC funding for electric vehicle start-ups has boomed over the past ten years. Financial investors such as banks and VC or PE funds see potential for considerable future returns in EV start-ups (IEA).
Is EV the future of mobility?
Electric vehicles need electricity to power their batteries. The demand for electricity is increasing worldwide due to the demand for electric vehicles and electrification in general. Richer energy countries will handle this without too much hardship. For instance, Norway has installed extensive hydropower and wind energy systems. However, some countries that are still struggling to meet their daily electricity needs will face greater difficulties.
The next question lies in the mass transportation system. Will everyone be able to afford EVs, or will price remain a deterrent in the future? Even if EVs become accessible to all market segments, can they address issues like congestion and air quality related to toxic pollution from tires? The problems of mass mobility need to be solved by measures that go beyond the widespread introduction of individual EVs. When public policy focuses solely on shifting to individual EVs, issues like congestion and tire-related pollution persist.
Mass rapid transportation, such as trains and buses (including electric buses) powered by renewable energies, would address mass mobility problems more effectively. Although trains and buses also have some downsides, their environmental impact per passenger is significantly lower compared to typical individual EVs, which carry fewer passengers.
Conclusion
The adoption of electric vehicles is one way of solving the problem of greenhouse gases and pollutants that contribute to climate change. We need more EVs to replace fossil fuel-based ICEs.
However, the growing demand for electricity, the challenges faced by less affluent countries, and the need for affordable and accessible mass transportation highlight the need for a more comprehensive approach. While EVs offer a promising solution for cleaner mobility, there is a need for a complimentary panacea for problems associated with mass transportation.
Mass mobility challenges, such as congestion and tire-related air and water pollution, so far cannot be fully addressed by individual EVs alone. Mass rapid transportation systems, like trains and buses powered by renewable energy, present an efficient and environmentally friendly alternative. For a sustainable future, a balanced approach that includes the development of robust public transportation infrastructure powered by renewable energy is essential.
