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In this final part-3 article, I outline 8 more factors that are focused around clean energy, the cost of electricity, vehicle to grid adoption, consumer awareness, the fate of Tesla and more: 17. Declining Cost of Electricity: As the cost of clean energy, especially from solar and wind power, continues to decline, many skeptics will be more open to considering an EV especially when they realize the cost to “fuel But as the cost of solar panels continues to decline and products like Tesla’s solar roof tiles become mainstream, more homeowners will choose to combine an EV with their rooftop solar. And with significant increases in battery range along with new autopilot hardware every few years (see Technology Obsolescence: The Auto Industry’s Lurking Challenge) – subscription-based “purchase” models would eliminate resale risk and obsolescence concerns and could lead to a modest increase in EV sales, again especially in the luxury market.

The 2007-2008 financial crisis in the US had a significant impact on auto sales with a downturn in 2010 of roughly 36 percent from the volume of sales in 2007. A future economic downturn in the US or other regions of the world could potentially impact sales of electric vehicles versus ICE vehicles either positively or negatively based on several adjacent factors. If on the other hand gas prices are very low and EVs – especially at the lower end – are still priced slightly above comparable ICE vehicles, budget conscious consumers might opt for ICE vehicles that could also be heavily incentivized to be priced under increasingly competitive EVs. China is the largest market in the world for vehicle sales and as the Chinese government is pushing electric vehicles – what happens in China greatly affects the rest of the world.

Cost Competitiveness With ICE Vehicles: Many EV observers like to point to the lower cost of ownership of electric vehicles as making them currently comparable in cost to ICE vehicles. While many observers believe that 250-300 miles of range will be key to mass adoption of EVs, I believe that a large percentage of consumers (especially late adopters and laggards in truck and SUV crazy US) will expect EVs to have the same or more range than comparable ICE vehicles. An abundant supply of fast-charging stations along major highways and at least an ample supply of level 2 charging stations at or near multifamily housing locations is critical to driving mass adoption of EVs. When EV battery packs can easily deliver a range of 400-500 miles at a cost of around or below $100 per kWh, then range and EV costs become a non issue.

And finally the shift from vehicles powered by internal combustion engines to electric motors and batteries is causing major disruptions to supply chains, manufacturing processes, the maintenance and repair business, how vehicles are financed and sold, to the concept of model years, and cars evolving into mobile energy storage vehicles. What happens to the value of an older LEAF when it rolls off a 3-year lease and a new version has double the range, faster charging capabilities, is vehicle to grid ready, has more advanced autopilot hardware and yet is priced roughly the same as the price of the older LEAF when new? Because of this desire to have the latest and greatest car features and capabilities, consumers will increasingly opt to “purchase” cars on a subscription basis, via fractional ownership or lease rather than through traditional financing or cash so as to shift the financial risk to the auto or finance companies. The auto companies have their hands full with numerous emerging technologies and threats to their core business of selling cars – but it will be interesting to see how they respond to customers that increasingly want to flip their car or truck every few years for a much more advanced vehicle.