Electric vehicles are a hot topic with the push towards a more sustainable future. To help you understand the market, our vast experience Kiplinger Letter Team will keep you up to date with developments, with their latest predictions below. (Get a free number or subscribe to the Letter.) For more information, see also the last EV News from our digital team taxes on electric vehicles, Tax credits for electric vehicles and much more. Now for the latest forecasts…
However, you feel for electric vehicles (EVs), the government wants you to buy one in the future, as shown by its new fuel economy regulations. The only way automakers can meet the new rules will be through a major shift from internal combustion to electric vehicles (a class of vehicle that has passionate fans and critics).
Leaving aside the pros and cons of electric vehicles, which we will cover in the future, some key questions:
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- Can the industry really switch to electric vehicles for the majority of its sales?
- Can the power grid and charging grid handle a flood?
The electric vehicle revolution
Let’s take a look at the biggest challenges to the Fed’s plan, which calls for at least 54% of new cars to be electric vehicles by 2030 and at least 64% by 2032. Washington believes this will save consumers a bundle in fuel costs (opens in a new tab) while improving the country’s air quality.
The sheer scale of the shift is huge: EVs accounted for about 6 percent of new car sales in 2022, and while sales are growing fast, they’re a long way from the 64 percent the White House wants.
Despite its strong commitment to electric vehicles, the auto industry likely has doubts about meeting the Fed’s goals. One person we know believes that most automakers still don’t know how to make this happen.
Much depends on future technological advances and the openness of future consumers to electricity, factors that can be estimated, but only with great uncertainty.
Large amount of materials needed to build electric vehicles
The amount of raw materials required to build so many electric vehicles seems daunting. The copper needed to build future electric cars and switch to renewable energy, as the US and other countries are planning, would send global demand for copper to 58 million tonnes by 2050, more copper than the world consumed between 1900 and 2021
Other necessary minerals, such as lithium, nickel, cobalt, etc., are also in tight supply unless technological advances allow for future batteries that use less of them.
Then there is the potential voltage in the power grid. A large fleet of electric vehicles would produce substantial new energy demand, at a time when grid reliability is already declining. In addition, many state and local officials are pushing to switch from natural gas to electricity for appliances and heating systems, while the grid also relies more on intermittent renewable energy such as solar and wind.
Money available for infrastructure
The Biden administration has billions of dollars congress (opens in a new tab) improve the network with new transmission lines to improve reliability. But his plans face obstacles.
The charging infrastructure for electric vehicles also needs to be improved. Public stations are often out of service or difficult to use, and there are too few of them.
Don’t be surprised if automakers rely heavily on plug-in hybrid cars that run a modest distance on battery power, with gas engines for longer trips to meet the tighter targets while trying to meet a wider range of vehicle needs. clients.
This forecast first appeared on Kiplinger’s letter. Since 1925, the Charter has helped millions of business executives and investors benefit by providing reliable forecasts about business and the economy, as well as what to expect from Washington. (Get a free number or subscribe to the Letter.)
