The day after the US presidential election, Tesla EV stock prices dropped dramatically by 5%. Solar and wind stocks also fell, while the share prices for coal and oil companies surged. Peabody Energy, for example, the world’s largest private sector coal producer, saw its stock accelerate by over 40%. This was probably based on speculation that the Trump administration could revitalise an ailing sector and turn its back on a cleaner one.
While it is too early to judge, these initial figures show that the energy industry could be altered by a change in government policy, with clean energy being overtaken by fossil fuels. Bad news obviously for the renewable energy and EV markets.
However, the solar and wind industries have made enormous progress in reducing costs which may insulate them for now from a more antagonistic White House. While a potential reduction in government support may slow growth rates, the clean energy sector may just flourish if it has indeed already left the station. The same can be said for EVs.
Figures reflect bright future for EVs
Cheap gasoline prices, a possible removal or reduction of federal tax credits of up to $7500, and less focus on refuelling infrastructure may slow growth in the short term, say, automakers but, EV’s still have a bright future in the US and the figures are certainly backing this statement.
Despite low oil prices, EVs seem to be charging forward globally, with over 2 million expected to be on the roads by the end of this year. The rise in sales is mainly attributed to a growing Chinese market, followed by sales in Europe and the United States, where Tesla Motors Co. is now dominating the luxury sedan market.
The EV industry is growing 10 times faster than the traditional vehicle market. This growth is expected to continue around the world. EV sales in the US are up 26% in the first 10 months of 2016 compared to the same period last year and they could rise fourfold by 2020 to 320,000 annually, according to the WSJ. Some studies suggest that by 2030, EVs could account for two-thirds of all cars in wealthy cities like London and Singapore.
EV models are evolving fast. The number of EV models is growing rapidly as automobile companies vy for a place in a very exciting and competitive market, meeting a variety of lifestyle needs. Auto-manufacturers are set to introduce approximately 19 new EV models over the next few years. With competitive pricing and a number of models to choose from, the industry seems set to race ahead. With British luxury brand Jaguar launching its first battery-electric SUV, it seems the industry is far from collapsing.
But, what’s driving EV growth?
Consumers are becoming more environmentally aware and want to reduce their carbon footprint. It’s also lighter on the fuel bill. Owning an EV is pretty trendy too nowadays and with all the new models to choose from, customers are spoilt for choice.Technology costs have dipped. The EV industry is also being fuelled by lithium-ion battery costs that have declined by 65% since 2010, helping automakers close the gap on sale prices with fossil fuel-hungry vehicles.
The refueling infrastructure continues to improve, highlighting the fact that EVs are growing in popularity. The number of EV refueling stations had grown by 89% over the last three years in the US.The Obama administration recently announced a new effort to expand the refueling infrastructure. A new plan to build out a national network of recharging stations, establishing 48 national EV charging corridors along existing highways was announced early November by the White House .
The intention is to install signs every 50 miles or so along these corridors, alerting drivers to re-charging stations, similar to the way that current highway signs point to gasoline stations. This is good news since there are only 16,000 EV stations across the country compared to 150,000 retail gasoline stations. It is also encouraging to note that 24 state and local governments have already committed to expand their government vehicle fleets with EVs. Even if the new government was to shelve or even scrap the plans, private investors are likely to snap up the opportunities.
It is currently unclear as to how the Trump administration will impact the country’s clean energy and EV markets but from what we can see, the train may have already left the station. For now, the only real concern when it comes to EV’s is the tax credit but Trump may leave this be since it will expire on its own over the next two to three years-the provision expires for automakers once each surpasses 200,000 EVs sold. Based on the current growth figures, this is bound to be sooner than later. So, while short term growth for EVs and clean energy may be hampered by the Trump administration, current figures show that these industries may well be standing on their own two feet already.