Auto Revolution: Shocking Electric Car Forecast

The electric car industry may be poised for a shocking sales jolt.  By 2050, research indicates there may be as many as one billion electric vehicles gliding silently on roads worldwide. That's the prediction of Morgan Stanley, one of the world's leading global financial services firms.

In a report dated September 28, 2017, the Morgan team forecasts advances in battery technology and growing consumer acceptance will fuel rapid sales growth during the next three decades.  Under their scenario, electrics would comprise as much as 90 percent of all sales by mid-century.

Thirty-years is a long horizon, but there are headwinds that make the prediction a stretch.  For one thing, at the end of last year there were only 1,039,988 electric powered vehicles on roads. In the U.S., the number was 199,826.  Today electrics account for less than 1 percent of vehicle sales.

Promoters of electrics autos tout the fact U.S. sales are increasing at prodigious rates.  The number of battery electric vehicles (BEV) in use have nearly quadrupled in five years from 2012 to 2017.  But there were a scant 52,607 produced in 2012.  Consumer adoption has been nothing to brag about.

Electrics enjoy one major advantage over gasoline powered cars.  The federal government doles out a tax credit of $7,500 to incentivize BEV purchases.  Some sates, such as California, tack on a rebate  of up to $7,000. Car manufacturers worry what will happen to sales if the subsidies evaporate.

Despite the government incentive, cost remains a barrier  to many consumers. Electrics are more expensive than their combustion engine siblings with similar features.  Market leader Tesla carries a price tag of more than $50,000 with some models costing north of $100,000.

Then there is the issue of battery distance.  Tesla leads the pack with 335 miles on a single charge for its Model 585D. A Chevy Bolt EV has a range of 238 miles. Ford's Focus Electric taps out at 115 miles.  The KIA Soul EV can travel 120 miles between charges.

When an electric car runs out of juice, there are few places to recharge.  Currently, there are 16,541 charging stations in the country.  Most are located in four states: California, Texas, Florida and New York.  Good luck finding one in Montana.  There are more than 121,000 gas stations nationwide.

The top four selling electrics in the U.S. last year were Tesla, Chevy Bolt EV, Toyota Prius, Chevy Volt and Nissan Leaf in that order.  The vehicle that led all sales in the country was the gas-gulping Ford F Series pickup with 896,764, more than all electrics combined.  Let that sink in.

Electric enthusiasts point to China as the shining example for the future.  Eleven percent of all vehicle sales in that country were BEV's, according to the most recent report.  China registered 352,000 new electric cars in 2016 alone.  The government is building 150,000 charging stations.

China’s Communist regime has gone one step further..  It  has announced plans to the phase out of new combustion engine vehicles entirely. No date has been set, but the United Kingdom and France both have approved bans on the sale of new gasoline powered vehicles beginning  in 2040.

But the threat of a ban has not disrupted China's auto market.  BEV's still account for a sliver of the 28 million automobiles and trucks purchased by Chinese in 2016.  Yet electric boosters are forecasting more than 5,000,000 electric cars will be traveling China's roadways by 2020.

China alone has tackled the cost hurdle, producing an ultra-affordable gasoline alternative.  The country manufacturers low-speed electric mini-cars that sell for $5,000 and max out at 40 miles per hour. The golf-cart looking cars are powered by a lead-acid battery. But it's decidedly low tech.

Despite the skepticism of consumers, automobile manufacturers are going all in for electric.  Global automobile firms have earmarked $90 billion to develop plug-in electric vehicles.  Some researchers are convinced that investments will equal consumer adoption.  The assumption may be flawed.

Bill Ford Jr., the executive chairman of Ford Motor Company, marveled at the the many electric car prototypes that were being introduced at the recent North American International Auto Show in Detroit. He was impressed with the volume but admitted he had a nagging concern.

Mr. Ford mused, "The only question is will the customer be there with us?" His point was Ford and its competitors are rushing headlong into electric vehicles and spending the equivalent of the GDP of a small country to bring more BEV's to market even as customer response has been tepid.

Will  that change once there are millions of shiny electric vehicles sitting on auto dealers showroom floors? Consumers hold the answer to the multi-billion dollar question and many appear reluctant to part with their combustion powered vehicles, especially in a era of falling gasoline prices.

In light of that reality, how long will it be before politicians in Washington decide they know better than consumers and force Americans to give up their gasoline powered cars in favor of electric vehicles?