Morgan Stanley has released a new report estimating that electric car sales will increase become 10 to 15 percent of the global new car market by 2025. That is three time the rate the investment banking house has projected in the past. Why the sudden shift in its thinking? While the US is conveniently planning to reduce or eliminate fuel economy regulations, every other civilized country has rules in place that will require auto manufacturers to dramatically lower the emissions from their vehicle in just a few years time.
A note on defining terms. Some Gas2 readers object strenuously to calling any car with an internal combustion engine an electric car. However, those who are less technically oriented often lump all cars that take advantage of an electric motor to drive an vehicle either full or part time together under the term “electric car.” Morgan Stanley falls into the group that is somewhat fuzzy with definitions.
Morgan Stanley analyst Harald Hendrikse, lead author of the report, says there are still significant barriers to mass adoption of electric cars. “Battery costs remain very high. Battery range remains too small and batteries are still too heavy. Battery charging infrastructure has not been sorted out in many countries. Are EVs actually environmentally friendly given through-life cost and environmental impact?
“Consumer demand seems to have been very limited for most EVs launched to date – presumably excluding Tesla. Despite this, we now have a situation where some of the largest (manufacturers) in the world are investing heavily in this technology, and setting aggressive targets for their take-up,” Hendrikse writes.