In the coming years, it is estimated that Electric Vehicles will become cheaper than internal combustion engine due to advancement in the technologies. Moreover, many Countries are also putting in policies and reforms to promote the sales of electric Vehicles.
China has recently put in various restrictions on buying and using gasoline and Diesel vehicles. The recent increase in the prices of oil is the major reason why many countries are switching to Electric vehicles. China being the largest importer of oil, has suffered a huge blow due to the high prices of oil. In the first seven months of 2018, China has imported an average of 10.6 million barrel per day of oil. And going by the current demographic growth rate, it is expected that if China does not move towards electric vehicle, it could end up importing 20 million barrel per day of oil.
It is easier for China to switch to Electric vehicles than paying for 20 million barrels per day as China is currently having world’s largest market for Electric Vehicle and also China is the world’s largest maker of Electric vehicles. Due to many economic and strategic reasons, China may take more steps to boost the sales of Electric Vehicles. China could also become a major exporter of electric Vehicles. It is expected that the demand for electric vehicles will be increasing more in China and Europe than in the US mainly due to the high prices of oil.
Market expects that by 2030, Electric cars will gain a 50 percent market share in Western Europe. In the first half of 2018, the total sales of electrical vehicles in Europe increased by 40 percent and currently there are more than 1 million electric cars in Europe. Main reason behind this substantial growth of sales is the high prices of oil in the global market which has increased the operating cost of running a car for an average citizen. That’s why people are switching to Electric Vehicles.
Electric vehicle manufacturing Companies like Tesla are experiencing this growth in demand and they are preparing themselves to expand their businesses in different countries. With the advancement of new technologies, the prices of electric vehicles may go down. However, currently the electric vehicle manufacturing companies are suffering from the high prices of cobalt which is a primary material in their batteries. Cobalt prices have been tripled in the past two years, due to which many companies like Tesla are trying to make those batteries which could eliminate or decrease the use of cobalt.
Currently in Unites States the growth in the demand of electric vehicle is not as exciting as it is in China and Europe. It is mainly due to the low gasoline price in US and lack of government policies. The Electric Vehicle Industry is currently very small compared to the Oil Industry, however if the growth in the demand of electric vehicles continues, it could be very disruptive for the oil industry.
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