Peak I.C.E. is already behind us

Mustang Mach E GT

The world hit a transport milestone in 2017, though most people wouldn’t have noticed it at the time.

That year, consumers bought more than 85 million automobiles, a sales volume that declined in 2018, and again in 2019, and then plummeted in 2020 due to Covid-19. Meanwhile, sales of electric vehicles rose, and rose again, making EVs the auto industry’s only growth market—and meaning that we almost certainly hit peak internal combustion engine car sales four years ago.

The future looks even more electric, according to BloombergNEF’s annual Electric Vehicle Outlook. (My colleague Colin McKerracher wrote his highlights for Hyperdrive yesterday.) The report is full of bold conclusions. For one, it sees mostly electric vehicles sold by the 2030s and mostly electric vehicles on the road by the 2040s—and that’s just the business as usual scenario. In a net-zero emissions world, EVs would comprise 100% of passenger vehicle sales just 15 years from now, with all other classes of road vehicle—from two-wheelers to heavy commercial trucks—being either fully electric or fuel cell-powered by the early 2040s…

Electric cars get a lot of attention, but they’re only one type of now-electrified road vehicle. Last year, EVs were more than 4% of total passenger car sales and 1% of the commercial vehicle market, at most. Meanwhile, electrics were 44% of electric two- and three-wheeler sales, and 39% of bus sales. As efficient as modern car factories are, they won’t be able to keep pace with an e-scooter factory targeting 10 million units a year.

Passenger cars have a long way to go to catch up. That said, I don’t want to minimize the rate of change so far. Total new car sales value last year exceeded $2 trillion, even with a massive overall sales drop-off. EVs are already a $100 billion-plus annual business, with a striking growth rate.

One of the future delights I miss in advance. As good as my health and fitness have been – and are – unlikely I’ll be around in a decade or two. Ah, well. It’s nice enough, now, to see what’s coming down the Yellow Brick Road.

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