At the beginning of the 21st century, if someone were to utter the words “electric” and “cars” in succession, people would inevitably disregard it as a preposterous idea and move on. Fast forward to 2018, and electric cars have not only raced into the hearts and minds of 1st world country consumers as a safe and plausible product but also drifted into the lives of many of them as a necessity.
Funny enough though, most people think electric cars to be a concept and product of recent years, when in fact the first electric car was built in London in 1884 by Thomas Parker. In 1897, electric cars found their first commercial use in the USA. However, advances in the internal combustion engines in the first decade of the 20th century diminished the relative advantages of electric cars. The broader range of gasoline cars and their much quicker refueling times saw them overtaking electric cars soon enough. So, how and what brought electric cars back to light again after a century?
Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. With the vision to build electric vehicles that use clean energy, Tesla launched The Roadster in 2008. From there, Tesla designed the world’s first ever premium all-electric sedan from the ground up – Model S – which has become the best car in its class in every category. Combining safety, performance, and efficiency, Model S has reset the world’s expectations for the car of the 21st century with the longest range of any electric vehicle, over-the-air software updates that make it better over time, and a record 0-60 mph acceleration time of 2.28 seconds as measured by Motor Trend.
Since then Tesla has not looked back once. It has continued to shape the electric cars market, and 2017 has been no different. Over the course of 2017, the company’s market capitalization has skyrocketed well beyond those of major manufacturers like Ford, GM, BMW, Honda, and Nissan. This thrust can be partly attributed to the company’s Model S, which still reigns supreme as the top-selling plug-in electric car worldwide in 2015 and 2016.
Consequently, whenever we talk about the electric cars market, Tesla’s current standpoint comes into play and in fact plays the most integral role in shaping the future of the industry. Tesla, today, is ranked #4 automaker globally and #1 maker in the USA. Despite the hype and expectations surrounding Tesla, its investors are in a tight spot, also known as the speculator’s gambit. But why is that? The company has just a fraction of the employees, vehicle deliveries, and revenue of its competitors. In fact, and most people may not know it, but Tesla has yet to churn out profit!
Nonetheless, there is no doubt that Tesla will live up to its market value and may even far outperform expectations. There is a multitude of reasons for this.
01. Elon Musk the X factor – The CEO of Tesla can’t seem to be doing anything wrong as of now. He has recently sent a Tesla into the orbit and is constantly pushing the boundaries of what is possible and what is not. He has become a global icon of trust and infinite possibilities. As such, consumer’s faith in Tesla will hardly deter.
02. User experience – If I am no connoisseur of cars or even investing, but last year I had the good fortune of riding a Tesla Model S sedan. From my experience, I can say with utmost certainty that any investor or any consumer who takes a Tesla out for a test drive will come out fully convinced to invest in the company, or buy a Tesla even if he or she is not into electric vehicles. Tesla has a supercharger in every state in the USA and is available all over Canada, Australia, and the UK. Consequently, the barriers to using an electric car are being overcome steadily, leading to an increase in demand.
03. Gigafactory – Musk’s giant battery factory in Nevada, The Gigafactory, is about 5.5 million square feet. The completion of this factory will be a game changer, because it is expected to help the company cut the cost of its batteries by as much as 30%, making Tesla’s electric cars far more accessible for the normal consumer. To put things into perspective, Tesla has said it will create more battery cells at the Gigafactory than all of the lithium-ion battery makers combined did in 2013.
Future of Electric Cars
While Tesla is undoubtedly paving the way for the future of Electric Cars, certain car manufacturers are not falling behind. Behind Tesla, in the top 5 influential Electric Cars manufacturers of 2017 are Nissan Motor Corporation, BMW, Kia Motors, and Chevrolet. If things go the way they have in 2017, those cars are more likely to be emblazoned with a Tesla Inc. logo than BMW AG’s. Furthermore, the shift to electric cars will be accentuated by diesel demise in Europe, battery technology advancements and regulation in China and Europe. During this period, Europe will have the highest electric cars penetration.
Environmental benefits of Electric Cars
When an electric car is running on electricity, it emits no tailpipe (also known as direct) emissions. When evaluated on that factor alone, electric cars are a lot eco-friendlier than conventional gasoline-powered vehicles on the market today. However, when assessing the eco-friendliness of an electric vehicle, the “well-to-wheel” emissions need to be taken into account as well. It is an overarching term that includes greenhouse gas and air pollutants that are emitted to produce and distribute the energy being used to power the car. When taking well-to-wheel emissions into account, all-electric vehicles emit an average of around 4,500 pounds of CO2 equivalent each year. By comparison, conventional gasoline cars emit over 9,000 as much annually.
So, overall it is quite safe to say that electric cars are not only becoming more convenient and cheaper to use, with the increase in superchargers and decrease in battery cost but also a lot more environmentally friendly than conventional cars that use fuel. This dynamic certainly begs us to ask the question: Is this the start of the electric cars revolution?
The answer is a resounding yes! The demand for electric cars will increase exponentially, and leading manufacturers will be able to meet that demand; in no time electric cars will overtake the automobile market and one day in the distant future fuel powered cars will become a myth.
Source: Business Insider, Bloomberg, INC, Technavio.com, Energysage.com