14-04-2022 · 市場觀點

Electric vehicle adoption accelerating as costs fall

Internal analysis substantiates that electric vehicle (EVs) have reached a critical inflection point. In many markets, total cost of ownership is now lower than petrol-burning vehicles (ICEs). Moreover, recent disruption in energy prices makes EVs even more attractive.

    作者

  • Clément Chamboulive - Co-Portfolio Manager

    Clément Chamboulive

    Co-Portfolio Manager

Replacing petrol-powered cars with electric ones is a critical part of decarbonizing transport towards net zero targets by 2050. Yet, electric vehicles are considered by many as a luxury gadget, out of reach for the average new car buyer. Using real-world total cost of ownership (TCO) scenarios, we demonstrate that EV costs have fallen enough to reach a critical inflection point for mass adoption.

TCO calculations can be revealing as the cost of a car at purchase represents around half of its TCO. Beyond that, energy and ongoing maintenance costs dominate. This is where the TCO shifts in favor of EVs. Thanks to the simpler nature of an electric powertrain, EVs have fewer parts and are easier to maintain compared to ICEs. Moreover, the availability of renewable electricity, either from an at-home solar installation or from the grid, mean EV energy costs are modest, whereas they remain high for combustion cars. In fact, with incentives, the cheapest car to own in Europe is now an EV.

Real user scenarios

In France, a blue-collar worker commuting 100 km a day round-trip, was best served by an EV. Despite a higher initial sticker price, the low cost of charging at home or work made the EV immediately competitive based on operating costs. Similar results were found for an economy-car consumer in Italy, though EV-ICE price parity was reached slightly further out due to other cost differences.1

Though incentives such as purchase subsidies and road tax exemptions lower the TCO for EVs at the outset, their costs to governments are high and they will eventually fade. In some markets they are already unnecessary for EVs to reach cost parity. Switzerland, for example, is subsidy-free. There, a young, suburban family can already have a fully electric SUV at virtually the same price as the petrol-burning version; and over time the EV’s TCO is lower (See Figure 1).2

Urban settings offered more challenges. Our UK and German scenarios considered young professionals living in flats in second-tier cities. In both cases, use of street parking and public chargers are the norm. Charging in public is more expensive relative to home installations, which lowered the EVs immediate operating cost advantage. However, after five years, electric charging is cheaper than petrol fueling, making EVs more attractive for urbanites.3

Cheap petrol and attractively priced SUVs made the US market the only scenario where the TCO for EVs failed to beat their ICE counterparts. EV retail prices will need to fall further to offset the low cost of ICEs in local US markets.

The cheapest car to own in Europe is now an EV

Figure 1 | EVs – a clear winner in time

Figure 1 | EVs – a clear winner in time

The table displays the cost components of owning a typical SUV in Switzerland over six years. Costs in CHF. ICE refers to internal combustion engine. See Knowledge Box below for further cost details.

Source: Robeco. Data as of 2021.

The impact of war and supply disruptions

Our TCO analysis was done using 2021 prices but war in Ukraine has increased the price of many commodities, notably crude oil and nickel. Neither dramatically alters our findings. In fact, it only increases the attractiveness of EVs. Petrol prices in the markets we considered have appreciated considerably, while electricity prices have remained stable. In markets where electricity is produced without burning fossil fuels (i.e., nuclear, hydropower, wind, solar) prices are virtually unchanged. Where oil and natural gas are used, electricity prices have risen, but less than petrol.

The price of nickel, a key component in EV batteries, is also rising. However, battery manufacturers typically secure supplies and prices via long-term contracts, which means there should be minimal impact in the short term. Even if nickel prices remain elevated and filter through to higher EV prices, cheaper operating costs over a vehicle’s lifetime would still outweigh upfront cost increases.

EVs gaining momentum in Europe and globally

The TCO scenarios presented are another example of how maturing technologies are driving down costs in automotive markets. It also clearly indicates that European markets have reached an inflection point for EV adoption, reflected in the building sales momentum. In 2019, EVs represented 3% of car sales in Europe. In 2021, that jumped to around 17% (See Figure 2).

More importantly, reaching this inflection point is what matters as once an EV is cheaper to own, it can compete on other features including driving performance, reliability, comfort, and convenience, in addition to being cleaner for the environment. Moreover, increases in charging infrastructure and EV driving distances are reducing consumer range anxiety.

EV sales are gaining traction as both newcomers and legacy car makers invest in EV production capacity and release new models. We estimate that this transformation in the industry will result in EVs representing half of all new cars sold globally in 2030.

Major European markets have reached an inflection point for EV adoption

Figure 2 | EV share of new car sales

Figure 2 | EV share of new car sales

Source: BloombergNEF for EV numbers. Bloomberg for full passenger car market numbers

‘Smart’ investments in electric vehicles

The electrification of transportation not only benefits the environment, but also consumers’ wallets. As existing car manufacturers shift production to EVs, and new manufacturers enter the market, the adoption of EVs will continue to increase. These are structural growth drivers for companies in the supply chain.

The Smart Mobility strategy invests in companies along the entire EV value chain, from manufacturers designing, assembling and marketing the vehicles which consumers want, to companies providing advanced semiconductors which allow for greater energy efficiency and vehicle intelligence, all the way through to companies which test components such that they can deliver the reliability and safety which vehicles demand.

Our total cost of ownership scenarios are present-day indicators of an industry in rapid transition, as it moves away from a fossil-fuelled past and embraces a low-emission future.

Footnotes

1In France and Italy, the Dacia Sandero (an ICE) was compared to the Dacia Spring Electric (an EV).
2In the US and Switzerland, the Skoda Kodiaq (an ICE) was compared to its EV alternative, the Skoda Enyaq.
3In the UK and Germany, the Volkswagen Golf (an ICE) was compared to the Volkswagen ID3 (an EV).

免責聲明

本文由荷宝海外投资基金管理(上海)有限公司(“荷宝上海”)编制, 本文内容仅供参考, 并不构成荷宝上海对任何人的购买或出售任何产品的建议、专业意见、要约、招揽或邀请。本文不应被视为对购买或出售任何投资产品的推荐或采用任何投资策略的建议。本文中的任何内容不得被视为有关法律、税务或投资方面的咨询, 也不表示任何投资或策略适合您的个人情况, 或以其他方式构成对您个人的推荐。 本文中所包含的信息和/或分析系根据荷宝上海所认为的可信渠道而获得的信息准备而成。荷宝上海不就其准确性、正确性、实用性或完整性作出任何陈述, 也不对因使用本文中的信息和/或分析而造成的损失承担任何责任。荷宝上海或其他任何关联机构及其董事、高级管理人员、员工均不对任何人因其依据本文所含信息而造成的任何直接或间接的损失或损害或任何其他后果承担责任或义务。 本文包含一些有关于未来业务、目标、管理纪律或其他方面的前瞻性陈述与预测, 这些陈述含有假设、风险和不确定性, 且是建立在截止到本文编写之日已有的信息之上。基于此, 我们不能保证这些前瞻性情况都会发生, 实际情况可能会与本文中的陈述具有一定的差别。我们不能保证本文中的统计信息在任何特定条件下都是准确、适当和完整的, 亦不能保证这些统计信息以及据以得出这些信息的假设能够反映荷宝上海可能遇到的市场条件或未来表现。本文中的信息是基于当前的市场情况, 这很有可能因随后的市场事件或其他原因而发生变化, 本文内容可能因此未反映最新情况,荷宝上海不负责更新本文, 或对本文中不准确或遗漏之信息进行纠正。