The price of gasoline may soon matter far less to American motorists, with the U.S. having crossed a pivotal line to the mass adoption of electric vehicles, a Bloomberg analysis finds.
The United States is the most recent addition to a growing list of nations where fully electric cars make up 5% of new vehicle sales, a threshold that opens the gate to mass adoption, the news service said on Saturday in publishing its findings.
During the last six months, the U.S. moved past that tipping point, following 18 other countries. If prior trends continue, a quarter of new car sales could be electric by the end of 2025, a year or two ahead of earlier projections, according to Bloomberg.
New technologies that succeed tend to follow an S-shaped adoption curve, where sales start out with a trickle among early adopters then abruptly pick up speed, the news service explained. The top of the S curve represents folks who are still using flip phones, for instance.
And, when it comes to electric cars, 5% is seemingly the magic number at which the early adopters are joined by most of the rest of us. Bloomberg found the scenario had played out in Norway after its first 5% quarter in 2013, with China following suit in 2018 and then South Korea last year.
Canada, Australia and Spain are among the other major car markets nearing the tipping point this year, Bloomberg said. Every country that has crossed the mark has a program of federal incentives and pollution rules. That goes for the U.S., too, with the White House last yearof new cars by 2030, including hybrids. The U.S. should hit that target several years ahead of schedule, according to Bloomberg.
Some countries, mostly in Europe, took to plug-in hybrids with smaller batteries supplemented by gas-powered engines, which if included would have more than 20 million EVs operating around the globe, a separate report by analysts at Bloomberg found.
Global efforts to get rid of the combustible engine have weakened the historically tight relationship between GDP growth rates and demand for crude oil, noted Ed Morse, Citigroup’s global head of commodity research. “We’re quite confident in our view that China has peaked in terms of diesel demand, and is peaking in terms of gas demand,” Morse told CBS MoneyWatch last week, citing China’s high proportion of electric cars or hybrids. The world’s appetite for oil will peak by the end of the decade, he added.
The transformation can’t come soon enough for the planet’s climate, and likely for the White House. The Biden administration is this week seeking to cap the price of Russian oil to offset future surges in energy costs to cushion the U.S. and global economy.
In the short term, American motorists continue to see some relief at the pumps, with the national average for regular on Monday at $4.68, down 32 cents, or 6.5%, from a month ago, when it registered $5.00 a gallon, according to AAA.