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Tesla is probably the first name that strikes our mind when we hear the word Electric Vehicles. Elon Musk is the man behind the innovation. Not only did he created a company that is all about going green but has also shared the design blueprints that Tesla uses to build the EVs.
The electric vehicle market is probably one of the most popular market of the recent times that too with minimal investment in the marketing. Their calling has echoed around the world quite recently when a teenage Swedish Environmentalist, Greta Thunberg, took the world by storm to create a world-wide awareness campaign for going green to save the planet. The chain reactions followed, and it cost the chairs of a few political diplomats, while at the same time gave rise to a new empire, the EV market. Tesla was its sole heir at that time. So, the story began. Today, Tesla, BMW Group, Nissan Motor Corporation, Toyota Motor Corporation, Volkswagen AG, General Motors, Daimler AG, Energica Motor Company S.p.A, BYD Company Motors, and Ford Motor Company account for a major electric vehicle market share. While the market size was clocked at $162.34 billion in 2019, it is projected to reach $802.81 billion by 2027, registering a CAGR of 22.6%.
It seems to be a win-win situation for everyone, isn’t it? Going green, saving the fossil fuels and saving the earth. Well, that is just half the story.
Let’s go back to Greta Thunberg’s campaign. What was it about? Saving the planet.
How Exactly?
By reducing the carbon emissions. That, was the plan.
The EV market simply isn’t solving the problem. It’s not reducing the carbon emissions in the short run. In fact, it is aggravating it.
Lithium is the core element of the batteries of Electric Vehicles. And Lithium Mining leaves behind a huge carbon footprint. So, the carbon footprint in the lifetime of an EV and a normal car is almost the same assuming the life-span of 5-6 years. In the longer run, however, the EVs will have lower carbon footprint.
Other major issue is that for charging an electric vehicle, you need electricity. And to ensure that you’re reducing the carbon footprint, it is essential that the electricity is produced from a clean power source, say, hydro or solar powered.
In developing countries, especially the Asian countries like India, the dependence for electricity on fossil fuels is more than 50% of the total. Still, the Indian Government is bringing reforms for EV production in India and the companies seem interested. Many of them have revealed their 5 to 10 years plan for the same already.
On a closer examination we find that the global index of cars production has been on declining even before the covid hit. In India, this was evident with some producers having very low production of vehicles in subsequent quarters. The reason is the Industry Life Cycle.
Product Life Cycle
Global Production of cars, 2000-2020
Just like the Product Life Cycle, Industries have a limited life too. Producers around the world recognized this problem and therefore have decided to shift to EV production.
For India, the logical step would have been to push for clean energy way before the EVs came into picture. For now, it seems that the two industries are going hand in hand.
Indian renewable energy sector is the fourth most attractive renewable energy market in the world1. India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2020. But these numbers mean nothing considering the size of the population. There is still a long way to go for India if means to achieve anything more beyond just the numbers.
But who is going to benefit from this?
EV market for certain big producers is a chance at revival because they have sufficient cash and credit to invest heavily in this segment.
For consumers who are looking to invest in a vehicle in the long run, it will have a considerable cost benefit plus a sense of satisfaction of playing their part in saving the planet.
The economy will benefit greatly. EV market has created several other markets such as that of batteries. The Industry Life Cycle of the cars is expected to enter the stage of entry-growth in the next 5 to 10 years.
Then comes our tiny little planet Earth. Which happens to be round and goes around in circles in the hope of coming back to life anew, with less pollutants to give it a Tuberculosis. But it seems it will have to wait for another century to experience some noticeable improvements in its health, for it will take decades for the already diffused pollutants in the atmosphere to settle even if we could somehow be a zero carbon emission species from tomorrow morning.
So, Are we going in the right direction as a species? Mostly, Yes.
But, are we acting out of the right reasons, and the right mindset? Probably Not.
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