Why the world is so excited about electric cars

Revving up.
Revving up.
Image: Reuters/Mike Blake
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There is a lot of buzz about electric cars. All the big carmakers have either begun to sell electric cars, or are planning to. Some manufacturers, like Tesla, only make electric cars; other players, like Volvo, are repositioning themselves to sell only electrics or hybrids as soon as 2019.

Last year set a new record for electric-car sales, although they still made up only about 1% of all cars sold. Detractors note that many of those sales were motivated by generous government subsidies.

The criticism misses a point, as shown by the International Energy Agency’s 2018 report on world energy investment. Any new technology, by definition, starts from zero. What matters is how fast it grows—and electric-car sales are growing fast. Moreover, consumer spending on electric cars is growing much faster than government spending in the sector.

The trends suggest that sales will continue to rev up. The average cost of an electric car is falling rapidly even as the range it can travel on a single charge is going up. This is because the batteries that power electric cars are getting more energy dense—packing in more power to the same package for a lower price.