Tesla, a California based Electric Vehicle (EV) and clean energy company on October 25, 2021, attained US$1 trillion market capitalization after a successful purchase of 100,000 vehicles by Hertz, making Tesla the first automobile manufacturer to achieve this milestone ahead of major manufactures like Toyota, Volkswagen, General Motors, etc. Tesla has been described as a company that is worth more than all the major carmakers in the world put together. One question that comes up a lot is how Tesla has been able to achieve this feat with EVs in a relatively short time compared to its competitors who have been in business years before Tesla was commenced business. But the thing is, as a type of Alternative Fuel Vehicle (AFV), EVs have been in existence for a while and they have evolved since their introduction in 1832 by Robert Anderson. EVs have become even popular now with growing demand particularly because of the increased trend of cleaner and less tailpipe emission vehicles because of climate change. This is because EVs are a sustainable option to Internal Combustion Engine Vehicles (ICEVs) – vehicles that runs on fossil fuels such as petrol and diesel.
Comparing EVs to ICEVs, economically, EV is a better option because it is less expensive to operate and maintain although current vehicle purchase price indicates that EVs are more expensive than conventional vehicles. For instance in the United States of America, the cost to drive a consumer EV per mile that fully operates on electricity is US$0.058 while the cost to drive ICEV per mile that fully operates on liquid fuel such as petrol or diesel is US$0.094 . Price volatility of crude oil and its related products in recent times make EVs a preferred choice for consumers because of the stable price of electricity globally due to how electricity tariffs are structured and regulated. Additionally, because electric engines are more efficient compared to Internal Combustion Engines (ICEs), consumers spend less when they drive EVs.
Environmentally, EV is a better option compared to ICEV. This is because EVs that are powered by only electricity have zero tailpipe emissions although emissions may be produced during generation of the electrical power, with the use of a power plant. For EVs that are powered by electricity generated via renewable energy sources, supply chain emission is lower. For some type of EVs such as Fuel Cell Electric Vehicles (FCEV), emission is only water vapour and warm air. Furthermore, because EVs can be powered solely by renewable energy generation sources such as solar energy, wind energy, hydro energy or tidal wave, which can be found in most countries, EVs have become a means of contributing towards energy security for countries as well as providing a justification for future renewable energy investments.
Direct emissions from conventional vehicles with an ICE are through the tailpipe and evaporation from the fuel system of the vehicle. According to the U.S Department of Energy, air pollutants, which contribute to smog, haze, and health problems; and greenhouse gases (GHGs), such as carbon dioxide and methane are caused by these emissions. Although EVs produces zero direct emissions, Plug-in Hybrid Electric Vehicles (PHEVs) can produce both tailpipe and evaporative emissions because by its nature it uses an ICE.
Generally known, noise pollution from automobiles is caused from wind resistance, tire and engine operations . Vehicles powered by ICEs have high noise pollution rate as well as heat rate compared to electric engines making EVs a preferred option especially as traffic noise has been linked to cardiovascular diseases.
EVs also present additional value to drivers beyond the primary use of mobility. For instance, advancement of new technologies such as vehicle-to-grid (V2G) and adoption of net metering policies by most governments – allowing individual electricity producers to feed power back into the grid – has made EVs, particularly Battery Electric Vehicles (BEVs), a desired choice for consumers. Also the introduction of other new EV technologies such as vehicle connectivity, autonomous driving, vehicle wireless charging, shared electricity, cross-border infrastructure integration, etc., have made EVs more appealing to consumers.
EVs have the potential to decarbonize the automobile supply chain especially in instances where vehicle parts are produced using clean energy, sustainable materials and a circular economy business model. With over half of the global petroleum output consumed by the transportation sector, the quest to decarbonize automobiles is stronger now than ever. With its benefits outweighing ICEVs, EVs have proven to be a major contender that is disrupting the automobile and transportation industries as envisage by global leaders to phase out ICEVs by the year 2050.
There are however challenges that must be solved. One of such challenge is the fact that the number of EVs in circulation based on global sales data is relatively low compared to ICEVs. Majority of EVs have been adopted in China, Europe and United States leaving out developing countries. This phenomenon presents both challenges and opportunities for consumers and businesses in emerging markets such as those in Africa. New products and services are emerging because of the rise of EV adoption leading to job creation, youth empowerment and sustainable living. The clean energy agenda is gradually catching-up and although fossil fuel will not easily fade away, it will eventually be drastically reduced.
King A. Wellington (LinkedIn: King A. Wellington; Email: email@example.com)
About the writer: King Adawu Wellington is a business strategist with expertise
in executing projects and helping companies achieve their goals in diverse industries.