Electric Cars Become Cheaper Than Petrol/Diesel Cars
The advance of battery technology has been rising by around 30% a year. It was estimated a few years ago that electric cars would become cheaper than petrol/diesel by 2020. I expect that will be the case by the end of 2019.
My next door neighbour works 40 miles away on Merseyside, and travels there and back, each day in his electric BMW. A few weeks ago, when I was looking at a house, it was already fitted out with external charging point for an electric vehicle. The big oil companies are buying out the leading battery charging companies, so as to provide fast charging facilities at all of their service stations. Some of the big supermarkets have announced that they will be providing extensive charging facilities on the car parks of their stores. The move away from internal combustion engines to electric is happening fast, and it will largely by-pass the halfway house of inefficient hybrid vehicles.
A driving force in this technological development is China. China is the biggest car market in the world. But, it has a long way to expand, and it makes sense for it to expand that market on the basis of electric vehicles, where it can also steal a march on the old car producers, by moving straight to this new electric vehicle technology. China has the potential to create a large world beating electric car industry. China has other reasons to move in that direction. It currently imports a lot of oil, and replacing petrol engines with electric, therefore, makes sense in reducing oil imports. In addition, China in also rapidly ramping up its industrial production, did so, by using its most freely available fossil fuel, for energy production – coal. But, that has created a big pollution problem. China is, therefore, moving rapidly, and intensively, into the development of electric vehicles, and of alternative energy production.
At current costs for electric, in the UK, electric cars cost around £0.03 per mile to run. That compares with around £0.10 to £0.30 per mile for a diesel engined vehicle. The maintenance costs of electric engines are also much less than for a petrol engined car. As soon as the purchase price of electric cars becomes cheaper than an equivalent petrol/diesel, the advantages of moving to electric for consumers will become irresistible. The only other thing holding them back currently is the existence of a sufficiently extensive system of charging facilities. That is rapidly being dealt with. But, an electric car, today, already has a range of around 400 miles, which means that for most people, who use the car mostly to go to work, or the shops etc., that range is already more than adequate. If in addition, you can charge your car for free at the supermarket, the works car park, or if you can get a full fast charge in around 10-15 minutes, at a service station, for around £12, enabling you to travel longer distances, it quickly ceases to be a constraint.
As I reported last year, we have already seen the first pilotless electric flying taxis introduced, in New Zealand. That is likely to be extended in the next couple of years, and we are likely also to see the introduction of driverless, electric vehicles too. They are likely to be introduced by existing companies such as Uber, but in economies that are increasingly moving to service based industry, I would expect people to move increasingly away from owning their own vehicles, but paying to belong to a service that enables them to call up a driverless, electric vehicle on demand, and simply dispose of it when they have reached their destination. It would be a sort of Netflix for travel. That will also open up a large change in the pattern of car production, as many fewer vehicles need to be produced, as each vehicle gets used far more intensively.
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