Are We in the Early Stages of the Electric Vehicle Revolution?
According to Wikipedia data, the U.S. market share of plug-in electric passenger cars has increased from 0.14% in 2011 to 1.9% in 2019.
Interestingly though, the EIA reported that,
"In 2019, more than 90% of the U.S. transportation sector's energy was sourced from fossil fuels,"
Many consumers and investors may not realize that most of the electricity used in charging E.V.s today comes from coal and natural gas. So, while E.V.s themselves may be emission-free, the electricity used to power them often isn't. For President Biden and those pushing the Paris Agreement mandate, this has to change.
A Reuters article, E.V. rollout will require huge investments in strained U.S. power grids, sums up the challenge and opportunity for investors:
"A model utility with two to three million customers would need to invest between $1,700 and $5,800 in grid upgrades per E.V. through 2030, according to Boston Consulting Group. Assuming 40 million E.V.s on the road, that investment could reach $200 billion.
So far, investor-owned companies have plans approved for just $2.6 billion in charging programs and projects, according to trade group Edison Electric Institute."
Biden's recently announced $2 trillion infrastructure plan appears to meet this need head-on.
According to The New York Times,
"It proposes the creation of a "Clean Electricity Standard" — essentially, a federal mandate requiring that a certain percentage of electricity in the United States be generated by zero-carbon energy sources like wind, solar and possibly nuclear power."
This matters even more because E.V.s are about to be pushed like never before.
"proposes spending $174 billion to encourage the manufacture and purchase of electric vehicles by granting tax credits and other incentives to companies that make electric vehicle batteries in the United States..."
That's $174 billion in tax credits and incentives directed at an already rapidly growing electric vehicle industry. The global electric vehicle market was estimated at USD 162.34 Billion in 2019, according to Valuates Reports.
Furthermore, and according to Valuates Reports data, the E.V. market,
"…is expected to reach USD 802.81 Billion by 2027, at a CAGR of 22.6 percent."
Valuates Reports made their estimates before Biden's proposed tax credits and incentives.
Biden's $2 Trillion Infrastructure Plan
The 1.9% E.V. adoption in 2019 might sound like a long way off the 66% target by 2050, but the percentage increase is what investors should note...
E.V.s on the road increased by more than 1,000% in the past eight years -- from 0.14% in 2011 to 1.9% in 2019. If that rate of increase holds, 66% of all cars being E.V.s by 2050 may be a conservative target.
Biden's infrastructure plan. The New York Times states that,
"The plan proposes an additional $46 billion in federal procurement programs for government agencies to buy fleets of electric vehicles, and $35 billion in research and development programs for cutting-edge, new technologies."
This, combined with the $174 billion in tax credits and incentives, should boost the E.V. market like nothing before.
One company that is on track with the global EV revolution is Ideanomics Inc.
Through its subsidiaries and investments, Ideanomics is driving EV adoption by assembling a global ecosystem across the 3 key pillars of EV, which are Vehicles, Charging, and Energy.
Ideanomics (Nasdaq-IDEX) Driving Commercial EV Adoption
