11 August 2017
It would appear that the supremacy of electric cars over their internal combustion cousins is now complete. The UK government has stated that sales of new diesel and petrol cars will be banned from 2040 and Volvo recently announced that it will only make electric cars from 2019 onward. It would certainly appear that electricity is the automotive fuel of the future.
The main winner from this seems to be Tesla – the Californian based electric car manufacturer that recently launched its Model 3 vehicle to join the existing Model S and Model X offering. This company will probably only sell around 100,000 units during 2017 (notwithstanding their fantastically named “Ludicrous Mode” available for extra acceleration) and the short term 500,000 per annum target still looks a long way off.
However as of 3 August 2017, data from Bloomberg would indicate that Tesla (which hasn’t yet turned a profit) is worth more than the majority of its car manufacturing rivals as follows:
| Market Cap US$ Billion | |
| Toyota | 169.1 |
| Volkswagen | 78.2 |
| Mercedes | 75.6 |
| Tesla | 53.5 |
| Honda | 52.3 |
| General Motors | 50.7 |
| Ford | 43.7 |
| Nissan | 41.8 |
| Renault | 26.4 |
| Fiat Chrysler | 18.4 |
But it’s not all plain sailing to the electric future that we have been promised.
There are the well known issues with both the range and recharging times of electric vehicles to overcome. In addition, there are the environmental costs of producing the batteries (another Gigafactory anyone?) and their subsequent disposal.
However a new potential problem has been identified in the ‘Future Energy Scenarios Report’ produced by the National Grid in July 2017. The National Grid foresees a problem after 2040 whereby around 75% of the electric car drivers arrive home around tea time (when electricity demand is already high) and plug their cars in to be recharged. This assumption is estimated to push peak demand up by around 18GW - from the current 60GW to nearly 80GW.
Putting that into context – the proposed Hinckley Point nuclear power station (which will end up taking around 20 years to build at a cost of around £20 billion) is expected to produce 3.2GW per hour at full capacity when it’s completed.
So if the National Grid is correct – then the UK may need to build six new power stations in the next 25 years to cope with the forecast increases in peak demand brought about by electric cars.
The prospect of building the new power stations must be unpalatable for a government with other pressing needs on its agenda. Accordingly it would appear no coincidence that the Department of Transport recently announced a £23 million grant to increase the coverage of filling stations for hydrogen powered cars in the UK.
I wouldn’t be at all surprised if hydrogen (rather than electricity) turns out to be the automotive fuel of the future.
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