What a difference a year makes: just about a year ago, Goldman Sachs was confidently predicting a seismic change in road transport, with way fewer fuel-burning engines on the road and far fewer humans at the wheel (www.goldmansachs.com/insights). But then a certain Donald John Trump was re-elected to the White House: "We will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers" (this, of course, is from his inaugural address)…. "in other words, you'll be able to buy the car of your choice." And one of his first knee-jerk acts in Office was to revoke Joe Biden's 50% EV target. So where does that leave the electric vehicle, and where, in particular, does it leave sustainable development in this crucial sector, given our precious planet is increasingly threatened by carbon-based climate change?
Well, like a lot of things to do with Donald Trump, it's very much a question of wait-and-see. Executive Orders are one thing, but forward trajectories are quite another.
Bending the bow back a year, Goldman Sachs was confidently projecting electric vehicles would make up roughly half of the World's global car production by 2035 (less than a decade from now), and EV sales already accounted for 16% of worldwide passenger car sales in 2023 (an increase of 2.8% year on year since 2014: www.statista.com/statistics/1371599, with the overall rate of sales accelerating significantly). That's our baseline. Where are we now in the Trump-inspired age of destructive destruction and "drill baby drill"?
Recharging and the Super-e Platform
We should start with recharging, which has become something of a totemic pinch point for sectoral analysts (and certainly a key point of concern for potential buyers of EVs). Last week, the Chinese manufacturer BYD announced that it had created an innovative charging system that would enable electric vehicles to be recharged in less time than it takes to fill a conventional, carbon-hungry car with petrol (www.byd.com). For the very first time, BYD will also be building a comprehensive charging network across China, and as we know by now, in these rapidly changing times, where China leads, others are likely to follow.
The so-called "super-e platform" is capable of delivering charging speeds in excess of 1,000 kW/hour, which will enable the average saloon car to travel 249 miles on a five-minute charge up… that's as near as doesn't matter to an uninterrupted journey from London to Newcastle on a single charge. So we've certainly come a long way since you had to leave the car plugged in all night to travel there and back to an out-of-town Sainsbury's, which has to make the purchase of an EV much more attractive for potential purchasers: leaving aside, of course, the Elon Musk inspired opprobrium of buying a Tesla at the moment.
On a single day this year (10 March), Tesla's stock fell by a striking 15%, but that was due to the unhealthy association Elon Musk has chosen to forge with Donald Trump: championing non sustainable causes and ruthlessly cutting the federal workforce in areas such as DEI and environmental safeguarding. In short, the present plight of Tesla has little, if anything, to do with the future of electric vehicles…quite the contrary.
Battery Charges
Add to this that we are also likely to see a rapid troughing in the price of batteries over the course of this year (which is highly significant in itself given the average Kw/hour cost of a battery is currently $110 to $120: making up nearly a third of the capital and running costs (combined) for a new EV vehicle). The same Goldman Sachs report (see above) predicts this figure will fall by 40% over the coming year…levelling off at something in the order of $91 per Kw hour. And in fact, the position is even rosier for consumers because the main production centres for EV batteries (South Korea, Japan and China) are currently in the middle of a production war which is likely to push effective aggregate battery prices down still further.
A Brighter than ever Future
So don't focus too much on the here and now: Trump and Musk won't be in the White House in four years' time, which is a heartbeat in the scheme of global economics. For the electric vehicle, the future still looks bright …brighter than ever in fact.
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Red Ribbon Asset Management (www.redribbon.co) aims to harness the full potential of fast evolving and emerging technologies to meet the needs of global communities as part of a circular economy, fully recognising the compelling demands of planet people and profit.
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