Elon Musk bets half of all cars built in 2032 will be electric
July 18, 2012
Tesla Motors CEO Elon Musk recently predicted that in 20 years, half of all new cars sold would be plug-in electric cars, says Green Car Reports.
The problem: knowledgeable industry analysts suggest that such a goal requires a highly unlikely growth rate in plug-in sales and production.
There are now 1 billion vehicles on the planet, with 2 to 2.5 billion likely by 2050. The auto industry now builds 60 to 80 million vehicles a year, which is likely to rise to 100 million or more by 2020.
Globally, in 2012, fewer than 100,000 of those will be plug-ins. Musk’s half-plug-ins-by-2032 guess is a worthy goal.
But Pike Research analyst Dave Hurst is willing to take Musk’s wager. His analysis addresses the U.S. market, not the global total — which would require going from south of 100,000 plug-in cars a year today to 50-million-plus in 12 to 20 years.
Instead, assuming a U.S. market of about 15 million vehicles for the foreseeable future (since the U.S. vehicle population is pretty much maxed out and has actually fallen slightly over the last few years), Hurst asks what would be necessary to get to 7.5 million plug-in sales by 2032.
It expects the U.S. plug-in market to grow at a 32-percent average rate from now through 2020. That takes sales to roughly 200,000 units in 2020.
Even if that rate continued for another 12 years, which Hurst considers unlikely, that would only take plug-in cars to roughly one-third of the market in 2032, or about 5 million sales.
But Hurst thinks 8 or 10 percent annual growth in plug-in sales is more reasonable, taking the total to 480,000 or 574,000 plug-ins sold in 2032 in the U.S.
Hurst’s analysis assumes a continuation of current trends, and does not incorporate what plug-in promoters — most notably Nissan CEO Carlos Ghosn — call the “hockey stick effect.”
That refers to a sharp increase in sales in some future year — perhaps between 2016 and 2022 — when mass production has driven down battery costs sufficiently that electric cars become much more price-competitive with gasoline cars, which will get steadily more expensive in real dollars to meet stringent new fuel-economy rules.
Hurst suggests that for plug-in vehicles to grow at the rate Musk predicts, three things will have to happen.
First, plug-ins must spread from small cars into full-size sport-utility vehicles and pickup trucks, which remain a huge portion of the U.S. market. Second, an oil price shock would have to drive gasoline prices to $8 or $10 a gallon.
And, he suggests, drivers will have to get comfortable with overnight recharging and limited vehicle range — and the public charging infrastructure must grow to support those volumes of plug-ins on the streets, including both wireless charging and more widespread DC quick charging.
What do you think? Will Musk win his bet? Will half of all cars sold in the U.S. in 12 to 20 years be plug-ins?