The advanced internal combustion engine may already be years in the past

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The world took a transportation milestone in 2017, though most people wouldn’t have noticed at the time.

That year, consumers bought more than 85 million automobiles, a sales volume that declined in 2018, then again in 2019, then plummeted in 2020 due to COVID-19. Meanwhile, sales of electric vehicles have gone up and up again, making electric vehicles the only growth market in the auto industry – and that means we have almost certainly hit the peak of sales of motor cars. internal combustion four years ago.

The future looks even more electric, according to BloombergNEF’s Annual Electric Vehicle Outlook. The report is full of bold conclusions. On the one hand, he mostly sees EVs sold in the 2030s and mostly EVs on the road in the 2040s – and that’s just the status quo scenario. In a net-zero-emission world, electric vehicles would account for 100% of passenger vehicle sales in just 15 years, with all other categories of road vehicles – from two-wheelers to heavy-duty trucks – either fully electric or powered. by fuel cell. the early 2040s.

Creating this type of scenario is important these days, as more and more companies move down a net zero path. Also important: describe where the industry is at right now.

Electric cars are getting a lot of attention, but they are just one type of road vehicle that is now electrified. Last year, electric vehicles accounted for over 4% of total passenger car sales and at most 1% of the commercial vehicle market. Meanwhile, electricity accounted for 44% of electric two- and three-wheeler sales and 39% of bus sales. As efficient as modern auto factories are, they will not be able to keep pace with an electric scooter factory targeting 10 million units per year.

Passenger cars have a long way to go to catch up. But the rate of change so far has been notable. The total value of new car sales last year topped $ 2 trillion, even with a massive overall decline in sales. Electric vehicles already represent an annual activity of more than 100 billion dollars, with an impressive growth rate.

In 2011, electric vehicles accounted for 0.1% of total passenger car sales, but BNEF estimates they could account for 10% of sales by 2023, a 100-fold increase in just over a dozen years.

It’s worth thinking about the future growth of electric passenger vehicles from a business perspective. A slew of new models are coming, many of them from century-old car manufacturers. Some of them are old marks on newer types of vehicles, like Ford Motor Co.’s Mustang Mach-E, which is already manufactured more than its combustion-engined sports coupe namesake.

But most emerging electric vehicles are comparable to existing internal combustion models. For example, the best-selling vehicle in the United States over the past four decades, the F-150, will soon have an electrified twin, the F-150 Lightning. Once it hits the market next spring, a few things could happen: it could weigh on regular F-150 sales; it could eat into sales of full-size trucks from other manufacturers; or it could absorb the sales of other categories of vehicles, for example SUVs.

Electric motor vehicle sales as a percentage of total motor vehicle sales.

Data already exists on how comparable models from a company with different powertrains might fare on the sales front: Porsche. Porsche doesn’t have a lot of models – most have been sold for years or decades – so its new introductions potentially compete with its existing offerings. Porsche sells two models of internal combustion SUVs (one of which is available as a hybrid version) and now two sedans: the combustion Panamera (and hybrid) and the all-electric Taycan.

The Taycan accounted for 7% of quarterly sales of Porsche sedans in North America when it was launched. Two quarters later, it was just under half. In the first quarter of 2021, six quarters after its launch, the Taycan accounted for 82% of sedan sales, even as the total sedan market grew.

Porsche has managed to develop its sedan market with a new model, but the competition between its incumbent and its new entrant is also clear. The electric Taycan could push its combustion-engined sibling to the brink – a market too small to merit a model refresh.

It is a competition, in miniature, with which the world automobile market will soon be confronted at all levels. All of its growth is electric and, at some point, that growth comes at the expense of combustion engine sales.

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