Are You a Dirty Electric Car Owner?
Do you own an electric car? How about a hybrid?
Electric cars are touted as eco-friendly… but they still leave a huge carbon footprint today.
The cars can require twice as much energy to build as conventional vehicles. And when they hit the road, they use charging stations that rely heavily on fossil fuels.
Charging stations usually connect to the electrical grid… the same grid that powers our homes. The grid’s energy comes from many sources, but only a small sliver comes from renewables.
The chart below shows that 10% of U.S. energy consumption in 2016 was from renewable sources.
With this data in mind, it’s clear that electric car owners aren’t really green today. They’re dirty fossil fuel users. But the electric vehicle (EV) trend has one major upside for the planet. The demand for electric cars is paving the way to a green future.
The Rise of Renewables
At the turn of the century, solar and wind were expensive. Only a few forward thinkers thought of them as viable energy sources.
Fast-forward to 2016: Solar accounted for 39% of new power generation – the most of any source. And in the last two years, the U.S. added a third of its total renewable generating capacity.
Elon Musk predicts that, in 20 years, we’ll be getting 50% of our electricity from solar.
Think that’s bold? Renowned futurist Ray Kurzweil believes that we’ll be getting 100% of our energy from solar by then.
The rate at which renewables grow is up for debate… but there’s no doubt that with each passing year, clean energy will command a larger slice of the pie above. So although electric car owners aren’t green today, they will be down the road.
The demand for EVs is fueling great change.
Goodbye to Gas Guzzlers
In the next few decades, more electric cars will hit the roads.
The Energy Information Agency (EIA) predicts that annual EV sales will top 1 million by 2035.
At that level, electric cars will still account for less than 10% of new cars sold… But the EIA is known to underestimate the growth in renewables. So let’s look at what David Fessler, our resident electric car expert, has to say on the matter…
I believe the period from 2020 to 2030 will be the “Decade of EVs.” Mass adoption will happen when prices are no different from those of ICE-equipped vehicles.
Last year, battery prices for EVs fell 35%. And they are on a downward trajectory that will make EVs as affordable as ICE vehicles within the next six years.
That will signal the mass-market launch for EVs. By 2040, you’ll be able to buy a long-range EV for less than $22,000 (in today’s dollars).
By that time, 35% of all new cars sold worldwide will have a plug. And even though I’ll be in my late 80s, I might live long enough to see it.
All car companies are preparing for an electric car future. Tesla (Nasdaq: TSLA) is grabbing the headlines, but more established players are getting in on the action as well. Ford (NYSE: F) recently announced a $4.5 billion investment into electric cars by 2020.
Electric cars will continue to replace gas guzzlers. They might not be green today… but they will be down the road.
P.S. Today’s electric cars might not be as eco-friendly as they seem. But they’re still an incredibly fast-growing trend… And they’re getting greener as time goes on.
Dave Fessler and Matthew Carr have been working on some groundbreaking research into the future of automobile technology. The companies behind the coming car revolution could bring incredible profits to investors. To learn more, click here.