EVs are a Disruptive Technology
If current trends hold, EVs will, within a decade or two, be the cheapest vehicles on the market. And that, if it happens, will lead to market dominance. Electric Vehicles are a disruptive technology.
The Plunging Price of Electric Vehicles
The past four parts of this series have all covered electricity generation. But electricity is only perhaps a quarter of worldwide carbon emissions. What about transportation, where oil-burning cars dominate?
Electric Vehicles, like virtually all other manufactured goods, are likely to have a learning curve, meaning that greater production will mean reduced price. Batteries, a large fraction of the cost of EVs, appear to have a learning rate of around 21%, meaning that every doubling of scale will reduce costs by 21%.
What about whole vehicles? The Ford Model T had a learning rate of around 16%. Let’s use that for the entire vehicle, including the battery. That gives us a conservative estimate of the cost improvement rate.