Why will electric cars replace conventional ones?

The automotive industry is entering a new era. From the very beginning, the word “car” has been associated with an engine, fossil fuels and exhaust fumes. The first 20 years of the 21st century have been a turning point for vehicles as the world realizes the real effects of vehicle production, maintenance and operation on the environment and climate of our planet. New technologies have been introduced to make engines more efficient in order to reduce damage. Unfortunately, this was not enough, and after governments and international organizations had imposed environmental norms and standards, they decided to announce a future ban on the sale of new cars with internal combustion engines, which in most European countries will apply from 2030.

Some vehicle manufacturers have anticipated this trend and invested in the development and production of electric vehicles. Following recent statements from the authorities, every car company now has a model with some type of electric drive (hybrid or fully electric) on the market

Opponents of electric cars, however, say the damage is greater than that of traditional cars with internal combustion engines. First, coal is used to produce electricity in many parts of the world, which would mean increased electricity consumption and increased greenhouse gas production. Second, water transport is used for the production and transport of batteries and their materials, which also relies on fossil fuels by polluting water bodies through the release of oil fractions. Finally, opponents of electric vehicles argue that due to the shorter life of batteries, pollution in the form of waste would increase with the introduction of a ban on internal combustion engines.

These problems are real, but they have their solutions thanks to science and engineering, and we can easily dispel them:

In terms of energy consumption, new sources have long been developed that are not only environmentally friendly, but also use a variety of meteorological conditions such as wind farms and photovoltaic cells. We have had the first solution for many years. The latter is entering more and more and is emerging as a reliable source in vehicles. Nuclear power, despite its notoriety, remains the cleanest and safest method of generating electricity. Measurements based on the European Union average show about 300 tonnes of greenhouse gases per 1 MW / h of electricity produced. Comparing the average values ​​of CO2 of a middle-class car with an internal combustion engine and an electric car L CITY yields up to 3 times lower levels of greenhouse gases, which are created indirectly and not in their direct operating environment (power plants are not located in the proximity of large urban centers with a concentration of pollution). The transition to cleaner electricity for transport also solves part of the second problem related to the production and transportation of batteries. The introduction of energy-independent power supply systems leads to a sharp increase in demand for stationary energy sources (Energy Storage Systems). This is part of L CITY’s innovation – the use of old lithium-ion cells to create such systems, which will eliminate the problem of their storage or recycling. In practice, after 10 years and 2,500 full cycles, which means use of 250 days a year (every working day), with a mileage of 300 km / day, the batteries will still retain up to 70% of their capacity. This allows them to be used effectively in Energy Storage Systems for the next 20-30 years.

Finally, the problem of dealing with waste from electric vehicles that have ended their period of operation has been solved by changing the method of production and the materials used. Automakers use and invest in materials that are recyclable and do not harm the environment, and many components can be reused.

All these factors contribute to the development of the electric car industry, as well as to customer’s interest in it.

Sales of this type of vehicle are moving in one direction – up. According to in 2020, global sales reached 3.24 million (compared to 2019, sales of electric vehicles were 2.26 million, or year-on-year sales jumped 43%). Another highlight of the chart we see below is that Germany has the second highest sales of EVs in the world after China and the first in Europe with 398,000 electric vehicles sold. Finally, the black line tracks the share of personal electric cars in the entire car market. There is a positive trend, as in 2020 the percentage is the highest – 4.2%.

The combination of high sales, government support and pressure from green NGOs also has an effect on capital markets.

The chart above shows the evolution of the sprice of NIO shares in blue, Tesla shares in green, Arrival shares in red, Fisker shares in black, and Lordstown Motors shares in gray, as of June 2020. Highest return of the investment have the shares of NIO with 933%, followed by those of Tesla with 355.75%.