Rajan Wilcox
The age of fossil fuel vehicles may be coming to an end as the world transitions to electric vehicles (EVs) and renewable energy sources. This shift is driven by both consumer demand and government incentives, with many countries and cities committing to banning the sale of new fossil-fuel vehicles and encouraging the use of alternative forms of transportation. While there is still some reliance on fossil fuels, particularly in the aviation industry, the demand for fossil fuel vehicles may have already peaked, with a decline in sales and an increase in the popularity of EVs. This trend is expected to continue, with EVs becoming more affordable and accessible, and by 2040, they are predicted to make up more than two-thirds of passenger vehicle sales globally.
| Characteristics | Values |
|---|---|
| Fossil fuel vehicle phase-out | Proposed bans or discouragement on the sale of new fossil-fuel-powered vehicles |
| Fossil fuel vehicle alternatives | Electric vehicles (EVs) |
| Fossil fuel vehicle sales | Peaked in 2017 according to Bloomberg |
| Fossil fuel vehicle bans | Some countries and cities have stated they will ban the sale of fossil fuel vehicles |
| Fossil fuel vehicle incentives | Some countries have given consumers incentives such as subsidies or tax breaks to stimulate the purchase of electric vehicles |
| Fossil fuel vehicle taxes | Fossil-fuelled vehicles are taxed increasingly heavily |
| Fossil fuel vehicle emissions | Fossil fuels are notoriously inefficient and renewable energy technologies are dramatically more efficient |
| Fossil fuel vehicle future | Globally, EVs will represent more than two-thirds of passenger vehicle sales in 2040 |
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What You'll Learn
- Electric vehicles are cheaper to run and becoming more affordable to buy
- The range of electric vehicles is increasing
- Charging infrastructure for electric vehicles is rapidly proliferating
- Fossil fuel vehicles are inefficient and have high thermodynamic losses
- Governments are incentivising the switch to electric vehicles
Electric vehicles are cheaper to run and becoming more affordable to buy
Electric vehicles (EVs) are cheaper to run and becoming more affordable to buy. In most cases, an EV will be cheaper in the long run. Automakers have been slashing prices for EVs, and with the market growing rapidly, the price margin is expected to shrink even more in the coming years. This is due to manufacturers producing more affordable models and improving battery technology.
The average price paid for a new EV continues to fall. In September 2023, it was $2,800 more than the average paid for a new gas-powered vehicle, down from a difference of $17,100 in April 2023 and $9,400 in September 2022. The US Department of Energy has a fuel-savings calculator to estimate how much you can save based on the specific vehicle you're considering.
The cost of charging an EV depends on where you live, your local utility rates, and when you charge. Utilities offer lower rates during off-peak hours, and many EVs allow you to schedule charging overnight when rates are low, potentially saving you up to 30% per charge. However, public charging stations, especially high-speed DC fast chargers, tend to be more expensive than charging at home.
On a per-mile basis, EV maintenance and repair costs run about 40% lower than comparable gas vehicles. EVs do not require spark plugs, oil changes, engine air filters, or brake pad replacements as often as gas vehicles. Regenerative braking in EVs recovers the energy normally lost to braking.
Several factors have made electric cars more affordable. The price of lithium and other battery materials has dropped in the last 12 months. Many manufacturers, including Hyundai and Ford, plan to source and manufacture EV batteries in the US to take advantage of tax credits. General Motors has cut costs by using the same batteries and parts for different models.
Many countries and cities have implemented or proposed bans or restrictions on the sale or use of fossil-fuel vehicles. This includes Norway, which became the first country to have the majority of new vehicles sold in 2021 be electric, and cities in Italy, Germany, and Switzerland that have temporarily banned fossil-fuel vehicles during particular times of the day or during winter. These bans and restrictions, along with incentives such as subsidies or tax breaks for electric vehicles, are making fossil-fuel vehicles less attractive to consumers.
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The range of electric vehicles is increasing
The demand for fossil fuels has peaked and is now on a downward trajectory. This is due, in part, to the inefficiencies of fossil fuels and the increasing popularity of electric vehicles (EVs). While EVs may have been more expensive than fossil fuel vehicles in the past, that gap is closing, and EVs are becoming more affordable. In fact, in some cases, it is now cheaper to own and operate an EV than a fossil fuel vehicle.
The range of EVs is increasing, and this is a key factor in their growing popularity. The average range of a new EV has risen from 103 miles in 2012 to 223 miles in 2020, and some models now offer a range of over 400 miles. This increase in range is due to improvements in battery technology and vehicle design, as well as increasing battery size. For example, the median battery range on a single charge has increased from 68 miles in 2011 to 234 miles in 2021.
The range of EVs is now sufficient for most people's daily commutes, and they are becoming an increasingly viable option for longer journeys. The development of fast-charging stations, which can charge a battery to 80% in about 30 minutes, is also helping to alleviate "range anxiety". This term refers to the fear of running out of battery power before reaching a charging station.
The transition to EVs is being supported by government incentives in some countries, such as Norway, which became the first country to have the majority of new vehicles sold in 2021 be electric. In the United States, electric SUVs can qualify for tax credits, and the Infrastructure Investment and Jobs Act allocated $7.5 billion to building a nationwide charging network.
As the range of EVs continues to increase, and their prices become more competitive, it is likely that we will see a further decline in the demand for fossil fuel vehicles.
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Charging infrastructure for electric vehicles is rapidly proliferating
The shift from fossil fuel vehicles to electric vehicles (EVs) is well underway, with Bloomberg predicting that fossil fuel vehicle sales have already peaked. This transition is being supported by the rapid proliferation of EV charging infrastructure.
In China and Europe, the number of charging spots more than doubled in two years, and major new projects are underway worldwide. China leads electric vehicle supply equipment (EVSE) deployment, with more than 85% of the world's fast chargers and around 60% of slow chargers. The country is now shifting its focus to charging infrastructure development, aiming for full coverage in cities and on highways by 2030, along with expanded rural coverage.
Europe is also experiencing significant growth in its fast charger stock, with an increase of around 55% from 2021 to 2022. Germany, France, and Norway are leading the way within Europe, with over 12,000, 9,700, and 9,000 fast chargers, respectively. The United States is also expanding its fast charger infrastructure, with about 28,000 fast chargers installed by the end of 2022, three-quarters of which were Tesla Superchargers.
The development of charging infrastructure is crucial for the widespread adoption of EVs. While home charging is well-established in many countries, public charging and interoperability are key to enabling more equitable access to EVs. The public charging stock increased by more than 40% in 2023, with fast chargers experiencing even higher growth rates. California leads the United States in the number of available public EV charging ports, while the Northeast region has seen the largest increase in public charging.
The trend towards improving EV charging infrastructure is expected to continue, with governments and organizations investing in and enacting legislation to support the build-out of chargers and enhance interoperability.
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Fossil fuel vehicles are inefficient and have high thermodynamic losses
Fossil fuel vehicles are notoriously inefficient, with high thermodynamic losses. It takes 10% of the energy of fossil fuels just to extract and process them, and up to two-thirds of their energy is typically lost in thermodynamic losses. Fossil fuel power plants and internal combustion engines (ICEs) are responsible for nearly half of the global energy waste. The energy losses in the production process are caused by extraction, fuel processing losses, and power generation losses. Extraction involves getting raw fuels out of the ground, fuel processing turns raw extracted fuels into ready-to-use molecules, and power generation turns molecules into electrons. Power generation accounts for the largest loss, with thermal losses from coal and gas power plants making up the majority of this waste.
In contrast, renewable energy technologies are significantly more efficient. Electric vehicles (EVs), for example, use about a quarter of the energy of an ICE vehicle. EVs operate with only around 11% energy loss, as there is no thermodynamic penalty for converting heat to motion, and they can recapture energy during braking. Wind and solar energy also have almost no losses, as they require no extraction or processing energy and do not suffer major thermal losses.
The growth of renewable energy technologies and the increase in efficiency are squeezing fossil fuels out of the market. This transition is evident in the exponential growth of electric vehicles, with 17 million in 2021 projected to become at least 250 million by 2031. Additionally, in 2019, renewables supplied 85% of the growth in energy demand, and this trend is expected to continue, with solar and wind generation expected to more than double by 2024. As a result, forecasters outside the fossil fuel industry recognize that peak demand for fossil fuels has been reached.
While EVs may currently be more expensive than fossil fuel vehicles, this is expected to change soon. Battery prices are falling due to higher demand and improvements in battery technology and manufacturing processes. As EVs become more affordable and efficient, more people will purchase them, creating a virtuous cycle that will further reduce prices and improve performance.
Overall, the inefficiencies and high thermodynamic losses of fossil fuel vehicles, combined with the increasing efficiency and adoption of renewable energy technologies, indicate that the demand for fossil fuels has peaked and will continue to decline.
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Governments are incentivising the switch to electric vehicles
The demand for fossil fuels has peaked and is now on a downward trajectory. This is reflected in the automotive industry, where sales of fossil fuel vehicles have probably peaked, and electric vehicles (EVs) are becoming more popular.
To encourage this transition, governments worldwide are incentivising the switch to electric vehicles. These incentives are in the form of purchase rebates, tax exemptions, tax credits, and additional perks like access to bus lanes and waivers on charging, parking, and toll fees. For instance, the Indian government announced a plan in 2014 to provide subsidies of up to ₹150,000 for electric cars and ₹30,000 for two-wheelers. Similarly, Armenia exempted VAT taxes on the import of electric cars, and electric vehicles are also exempt from fuel consumption tax and monthly vehicle tax in the country. In the UK, the government introduced the Electric Vehicle Homecharge Scheme, where owners of ultra-low-emission vehicles can get up to £500 ($750) towards the cost of installing a dedicated charge point at their homes.
Some governments are also providing grants and direct investment to promote the switch to electric vehicles. For example, the US Department of Energy provides grants of up to $200,000 for research and development of EV chargers, batteries, and alternative fuel technologies. The US Department of Transportation's Federal Transit Administration offers grants to replace, rehabilitate, and purchase low or zero-emission vehicles and construct associated facilities.
In addition to these incentives, governments are also implementing regulations to discourage the use of fossil-fuelled vehicles. This includes the introduction of low-emission zones (LEZs) or zero-emission zones (ZEZs) in cities, which restrict the use of fossil-fuelled cars. Some countries are also planning to ban the sale of new fossil-fuel vehicles or impose restrictions on their registration and importation.
These initiatives by governments are crucial in accelerating the transition to electric vehicles and reducing the world's dependence on fossil fuels.
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Frequently asked questions
Fossil fuel vehicles are cars, buses, and other automobiles that are powered by fossil fuels, such as gasoline (petrol), diesel, kerosene, and fuel oil.
There is evidence to suggest that the demand for fossil fuel vehicles has peaked and is now on the decline. This is due to a combination of factors, including the rise of electric vehicles (EVs), improvements in battery technology, and government incentives promoting the transition to cleaner energy sources.
Many countries and cities have proposed or implemented bans or restrictions on the sale and use of fossil fuel vehicles. Some offer incentives such as subsidies or tax breaks for the purchase of electric vehicles, while others focus on expanding charging infrastructure and increasing the availability of clean energy sources.
