There’s a possibility that California will join the United Kingdom, Norway, and France in the banning of cars that operate with combustion engines. Such a scenario was unveiled when Governor Gavin Newsom signed an executive order to stop the sales of gas- and diesel-operated vehicles in the state by 2035.
But of course, such an order will meet a variety of difficulties. The government has to sort how they are going to encourage people to get electric vehicles and abandon their traditional cars and trucks.
“If the government tells you that you can’t build anything other than electric vehicles, consumers will have no other products to choose from,” said Sam Abuelsamid, an analyst of the Guidehouse Insights. “New vehicle sales could drop precipitously, with many people choosing to just drive the gas- and diesel-powered vehicles they have a lot longer.”
As of now, battery-powered cars have modest sales in the United States–only hitting the 2 percent demand in the country. Even in California, where the market of EV is considered to be the biggest, the figure is just lingering around 10 percent.
However, the EV industry has been increasingly optimistic that even without the new policy, the sales of electric vehicles will surge. During the launch of the ID.4 of Volkswagen on Wednesday, Scott Keogh, the CEO of VW Group of America, said that the demand in the US for EVs would reach 15 to 20 percent by 2025. From there, the demand will spike up.
Meanwhile, Guidehouse Insights forecasted that BEVs, plug-ins, and hybrids would reach the 1.13 million mark in sales this year. It is also predicted that by 2025, the sales for these vehicles will reach 5 million, and in 2030, 12.5 million.
It should be underlined that the United States is not the leader of EV manufacturing. The Chinese market for BEVs is way bigger than the US. China is also studying the possibility of banning gas-powered vehicles on its streets and highways. However, based on the industry data, Norway has a significant demand, too–reaching as high as 70 percent over the past years.
The automotive industry has long been dealing with the matter of these electric vehicles. But as of recent, it is observed that a huge shift is taking place. And it is not just because of new players like Rivian, Lucid, and Tesla. Mary Barra, the CEO of General Motors, said that the company is taking “a path to an all-electric future.” The automaker is planning to release 20 or more BEVs by 2023. Meanwhile, VW is eyeing to release 50 BEV models by 2025, through its subsidiary brands. Niche automotive brands like Rolls-Royce are also in the hook.
Rolls is about to show its fully electric vehicle before the end of 2020. Such a trend will become inevitable “if legislation forbids (owners) from driving a combustion-engined car into the center of a city,” said a spokesperson for the British marque.
The Alliance for Automotive Innovation, a US-based trade group, said last week Thursday that “neither mandates nor bans build successful markets,” while stressing that it will require extensive steps to bring manufacturers, dealers, and regulators together to make the ban successful.
However, “the good news is that things are moving in the right direction,” said Stephanie Brinley, an automotive analyst with the IHS Markit.
In the United States alone, it is expected that there will be more than a hundred BEVs by 2015. Several analysts predicted that the costs of manufacturing electric vehicles would plunge due to the fall of battery prices. A few years from now, the amount that these automakers pay for the batteries will be reduced by half. Elon Musk, the CEO of Tesla, said that it would launch a new $25,000 EV car model within the next three years. Such a cost is almost half of the price of the Tesla Model Y.