The Electric Boom – 2020, the year of Tesla?

By Lois Gilhooly, GLOBUS Correspondent

It’s 2020 and, I can assure you, I haven’t fulfilled my resolution of getting a Tesla… although it wasn’t exactly likely in the first place. Apparently, however, I’m not the only one. Tesla’s share prices have soared since the 1st of November and, on the 24th January, they shot to 564.82 USD. But after Musk’s turbulent year, what on earth could have caused this boom?

At the end of 2019, Tesla pulled something new out of their hats. Their new Shanghai factory begun making vehicles ahead of schedule, ensuring confidence in the company’s ability to expand and reach further markets. This has taken effect as Tesla continued its success in China, with 2.138 Billion USD in car sales in the first 9 months of 2019. However, is Tesla the only company cashing in?

It doesn’t look as such. Companies that provide parts to electronic vehicles companies such as APTIV, a producer of electronic safety products, and TE Connectivity, a transport solutions provider, have all increased their share prices over the year. In the last few months, they have been safely within the range of 90-100 USD. This demonstrates that not only Tesla is growing, but so are other firms that are committed to more sustainable transport. 

Moreover, many predict that the share of electric cars in the global vehicle sales will increase from the current 1% to at least 10% by 2025. So, it seems that these companies will continue to profit through this new technology, and this should be a good thing, right? After all – more electric cars means many less internal combustion engines –which should equate to lower levels of pollution. However, many have doubts about the sustainability of these electric cars, especially concerning their battery production and life-cycle. 

The International Council on Clean Transport (ICCT) report that the manufacturing of a battery and an average internal combustion engine (ICE) produce a similar volume of greenhouse gas emissions.

However, an electronic vehicle, found to produce just half of the greenhouse gas emissions of an average European passenger car, is found to be able to pay off this carbon debt within two years of use. Furthermore, if the electronic vehicle is powered by renewable energy, then this time is reduced by a further half.

But can we do more?‘ Obviously, there are obstacles to us all buying an electric car; centrally, financial ones. An average Tesla Model 3 costs $35,000! On top of that, some argue there is insufficient infrastructure in place to accommodate for electric cars, since charging points are still relatively rare in many parts of the country.

However, the emissions from battery manufacturing are likely to decline over-time due to grid decarbonisation. In other words, the increasing use of cleaner energy throughout the production cycle will help decarbonise the production grid to as low as 30%.

Overall, this boom has long been overdue. Electric cars are a small step, but it seems as if larger systematic change is on the horizon. One that will probably lead to market expansion in the field of electric vehicles.

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