Did You Hear that “Bang”?

If you missed it, it was the starting gun for the electric car revolution. It went off on March 31, 2016 in the form of the Tesla model 3’s launch. Within 24 hours there were around 250,000 orders with deposits paid. There are now well over 400,000 orders. To put that into perspective, Tesla only sell about 60,000 cars a year and the entire global tally of electric vehicles is around 1 million. This will not just the first mass-produced electric vehicle in history, it is be the biggest launch of any motor vehicle in history. It will bring electric vehicles (EV’s) to the middle class and spawn a host of new industries.

We are now in a similar period to the 1920’s when internal combustion vehicles started to take over from horsepower. Early adopters are now giving way to mainstream buyers. Electric is the new oil. By 2035 it is estimated there will be 140 million electric vehicles on the world’s roads, somewhere around 10% of all vehicles and EV’s will represent 30-40% of all new sales. Volvo plans to sell over a million EVs by 2025. Volkswagen, Nissan, BMW, Ford, Toyota, Kia, Hyundai and Daimler all sell EVs/hybrids.

The Chinese plan to rival Tesla with cheaper cars. China’s Amperex Technology Co.’s new manufacturing plant is expected to be 1.5 times the size of Tesla’s. A few years ago China deliberately crashed the global solar panel market so it could corner the lion’s share of production. It is doing the same thing now with electric cars by banning all foreign competitors and subsidising local production. Tesla better be careful.

The electric vehicle revolution will push up global demand for nickel by 20%, copper by 25%, cobalt by 100% and the sky is the limit for lithium and graphite. Big oil, and the Middle Eastern dictators should be worried. Base metal miners and electricity suppliers are rubbing their hands with delight.

The electric vehicle revolution could turn out to be more dramatic than governments and oil companies have yet realised. Battery prices are the most expensive part of an electric car. They have halved from a few years ago. Tesla’s giant battery factory will bring them down again, and the price is expected to halve again in the next seven years. During the 2020’s EVs will become a more economic option than petrol or diesel cars in most countries.

This projected change between now and 2040 will have implications beyond the car market. Research estimates that the growth of EVs will mean they will displace 13 million barrels per day of crude oil but use the equivalent of 11% of 2015 global electricity demand. Many expect and hope that this increased supply of power will come from solar sources. The dream of environmentally sustainable individual transport for the planet will then be well on the way to being solved.

There is one last link in the chain to be discovered for this to come true, and that is how to store large chunks of solar power for release when demanded. This is where the next fortunes will be made and where the big global corporations are spending billions to be first off the rank.

Kevin