Advertisement

Elon Musk Bets Half Of All Cars Built In 2032 Will Be Electric

Follow John

'Revenge of the Electric Car' premiere: Tesla Motors CEO Elon Musk on red carpet

'Revenge of the Electric Car' premiere: Tesla Motors CEO Elon Musk on red carpet

Enlarge Photo

Tesla Motors CEO Elon Musk has an enthusiastic base of fans who consider him a visionary.

And with Paypal in the past, and SpaceX as well as Tesla today, Musk has an impressive track record.

So ears perked up when he recently predicted that in 20 years, half of all new cars sold would be plug-in electric cars.

The problem is that knowledgeable industry analysts suggest that such a goal requires a highly unlikely growth rate in plug-in sales and production.

Let's recap. There are now 1 billion vehicles on the planet, with 2 to 2.5 billion likely by 2050. The auto industry now builds 60 to 80 million vehicles a year, which is likely to rise to 100 million or more by 2020.

Globally, in 2012, fewer than 100,000 of those will be plug-ins.

Musk's half-plug-ins-by-2032 guess is a worthy goal. It leaves Obama's pledge to put 1 million plug-ins on U.S. roads by 2015 in the dust. (Though it's looking like Obama's goal will be met in 2018, not 2015.)

“In 20 years, more than half of new cars manufactured will be fully electric,” Musk said during the June 22 launch of the production 2012 Tesla Model S electric sport sedan at the Fremont, California, plant of Tesla Motors [NSDQ:TSLA].

“I feel actually quite safe in that bet.; that’s a bet I will put money on. … It’s probably going to be in the 12- to 15-year time frame."

Last time he made a wager, Musk won the bet with journalist Dan Neil, who had suggested he wouldn't launch the Model S on time.

But this time, Pike Research analyst Dave Hurst is willing to take Musk's wager. He backs it up in a recent post by running the numbers.

Hurst's analysis addresses the U.S. market, not the global total--which would require going from south of 100,000 plug-in cars a year today to 50-million-plus in 12 to 20 years.

Instead, assuming a U.S. market of about 15 million vehicles for the foreseeable future (since the U.S. vehicle population is pretty much maxed out and has actually fallen slightly over the last few years), Hurst asks what would be necessary to get to 7.5 million plug-in sales by 2032.

Pike Research is in the business of projecting the future, and it sells some very expensive reports that contain the resulting predictions.

Pike Research Predicted Global Electric and Hybrid Car Sales

Pike Research Predicted Global Electric and Hybrid Car Sales

Enlarge Photo

It expects the U.S. plug-in market to grow at a 32-percent average rate from now through 2020. That takes sales to roughly 200,000 units in 2020.

Even if that rate continued for another 12 years, which Hurst considers unlikely, that would only take plug-in cars to roughly one-third of the market in 2032, or about 5 million sales.

But Hurst thinks 8 or 10 percent annual growth in plug-in sales is more reasonable, taking the total to 480,000 or 574,000 plug-ins sold in 2032 in the U.S.

Hurst's analysis assumes a continuation of current trends, and does not incorporate what plug-in promoters--most notably Nissan CEO Carlos Ghosn--call the "hockey stick effect."

That refers to a sharp increase in sales in some future year--perhaps between 2016 and 2022--when mass production has driven down battery costs sufficiently that electric cars become much more price-competitive with gasoline cars, which will get steadily more expensive in real dollars to meet stringent new fuel-economy rules.

Hurst suggests that for plug-in vehicles to grow at the rate Musk predicts, three things will have to happen.

First, plug-ins must spread from small cars into full-size sport-utility vehicles and pickup trucks, which remain a huge portion of the U.S. market. Second, an oil price shock would have to drive gasoline prices to $8 or $10 a gallon.

And, he suggests, drivers will have to get comfortable with overnight recharging and limited vehicle range--and the public charging infrastructure must grow to support those volumes of plug-ins on the streets, including both wireless charging and more widespread DC quick charging.

What do you think? Will Musk win his bet? Will half of all cars sold in the U.S. in 12 to 20 years be plug-ins?

Leave us your thoughts in the Comments below.

+++++++++++

Follow GreenCarReports on Facebook and Twitter.

Advertisement
 
Follow Us

 

Have an opinion?

  • Posting indicates you have read this site's Privacy Policy and Terms of Use
  • Notify me when there are more comments
Comments (37)
  1. You have to wonder what Pike Research's predictions for EV sales were 4 years ago. My guess is that they were probably not even thinking about it. Really hard to predict the future.
     
    Post Reply
    Vote
    Bad stuff?

  2. Yeah, I'm gonna have to go with Elon on this one. Maybe if the analyst in question launches a rocket into orbit and builds a car company from scratch, I'll start to weight his opinion evenly with Elon's.
     
    Post Reply
    +6
    Bad stuff?

  3. The problem with the Pike research is that it did not consider battery advancements in its forecast. The assumtion is made that even by 2020 people will have to get used to limited range and daily charging (like they do with their iPads) which is very unlikely.
     
    Post Reply
    +3
    Bad stuff?

  4. The problem is there are as many different predictions as there are "knowledgeable industry analysts".

    For instance:

    Pike research: batteries will be at $523 per kilowatt hour by 2017

    evworld.com/news.cfm?newsid=27555

    Roland Berger Strategy Consultants: battery prices at $250 by 2015

    green.autoblog.com/2012/06/21/battery-costs-will-fall-to-250-kilowatt-hour-by-2015/

    Clearly that's a huge difference in assumptions.

    Generally these "expert" predictions are interesting but at the end of the day hardly worth the paper they are written on even if they come in "some very expensive reports" in a world where every expert has an agenda and truth is a rare commodity.

    So maybe we should give the visionaries the benefit of the doubt.
     
    Post Reply
    +6
    Bad stuff?

     
  5. Generally these "expert" predictions are interesting but at the end of the day hardly worth the paper they are written on even if they come in "some very expensive reports" in a world where every expert has an agenda and truth is a rare commodity.

    hey chris,

    i am glad i wasnt eating anything when i read that - LOL !!!
     
    Post Reply
    +2
    Bad stuff?

     
  6. Actually, I sort of regretted this remark after I posted it. Thinking about it some more it occurred to me that what's in the "very expensive reports" should probably be distinguished from the freebies they hand out to the media. The people paying for these very expensive reports will expect reliable info and the "experts" they hire know better than to freely hand out opinions that doesn't suit the agendas of those who pay for their salaries.

    Guess the lesson here is: beware of free expert opinions, always ask yourself what's in it for them. Remember: every expert has an agenda.
     
    Post Reply
    Vote
    Bad stuff?

     
  7. @Chris: As does every commenter! :)
     
    Post Reply
    +1
    Bad stuff?

  8. i hope Elon wins. to be quite honest; can we afford to lose?
     
    Post Reply
    +7
    Bad stuff?

  9. I predict that 100% of all cars will be electric within 3 years
    or less. All we need is a cost effective, fast charging battery, and I firmly believe that they are just around the corner. Actually, this might not be something that would be to Tesla's benefit - oodles of competition where now there is none.
     
    Post Reply
    0
    Bad stuff?

     
  10. I wouldn't bet against Elon on this one, despite my being skeptically hopeful.
     
    Post Reply
    +1
    Bad stuff?

  11. Please Kent, get off the pipe...or are you joking? 3 years??? Nissan is selling the most EVs here now and Ford n Mitsu look to join the party later this year so Telsa is not alone. Of course Telsa has the best EV by far but others are joing...including Toyota w/ the Rav4 EV early next year.

    I like your hope but three years is just not physically or fiscally possible....perhaps 13 years at the soonest. I hope for sooner the better.
     
    Post Reply
    Vote
    Bad stuff?

  12. Well, generally speaking the Electric power train will last much longer than ICE. The only thing that needs replacement is battery. If the replacement cost is low enough, then replacing battery is cheaper than replacing cars... Would that increase the lifespan of the vehicles?
     
    Post Reply
    +2
    Bad stuff?

  13. Elon and Tesla Motors I think have a better vantage point then most and are more aware of what's really going on in the electric car market. Unlike most CEOs Elon is solely focused on electric cars so his prediction may turn out to be very close.
     
    Post Reply
    +1
    Bad stuff?

  14. John V.
    Here is a (the) question -
    Once batteries reach the tipping point on efficiency and cost,
    why would any auto maker produce vehicles with ICE engines?
    Yes -
    This is based on my premise that Tesla has now proven that the electric car is superior in theory, concept, and design.
    I believe now every car maker will jump, once the battery issue is no longer "the" issue.
     
    Post Reply
    +3
    Bad stuff?

     
  15. That is exactly why Goshen's hockey stick growth rate is correct!

    The primary difference between Musk/Goshen and Hurst is that the former make things happen, while Hurst just looks at trends.
     
    Post Reply
    Vote
    Bad stuff?

  16. I wish you were right Chris but you not thinking of all the players. I suggest you always include those that win n those that lose in big picture scenarios of great change.

    In this case, we see now that auto manufacturers are resisting the plug-in hybrid n EV production wave. Meaning they are only producing, generally, as many of these better vehicles as the law or regulation require of them. For example Honda's new best in the world mpge Fit EV is only being leased to a few thousand Americans in the next few years...no matter what the consumer demand is. The real money for auto manufacturers and auto dealerships are the service departments and used car sales.
     
    Post Reply
    Vote
    Bad stuff?

  17. EVs need far less maintenance right? That's one of the reasons the big car companies are charging bookoo bucks for EVs. So one could see that current ICE manufacturers become likely or at least potentially losers in the sale of EVs.

    The biggest loser would of course be the big oil companies as their addictive, black goo would be required far less. Sure most new power plants west of the Mississippi are natural gas and there will be many gas/diesel vehicles on the roads for decades but fuel for EVs will not be dependent on the big oilies. Don't you think they are going to continue to fight higher CAFE standards, pollution regulations, and EVs in general? They have billions to spend in that effort...unfortunately.
     
    Post Reply
    Vote
    Bad stuff?

  18. I think this will happen, and $16/gallon gasoline and diesel will force it to happen. Gasonline has doubled at retail every 10 years, at $16/gallon it will be an absolute no brainer. You would have to be completely stupid not to buy an EV or EREV.
     
    Post Reply
    +2
    Bad stuff?

  19. some folks bet on the buggy whips before cars took off. gas is a killer, propably see the cancer rate go down big time....
     
    Post Reply
    +1
    Bad stuff?

  20. Eat my lunchbox! MUSK IS RIGHT because of the simple math these foolish prognosticators fail to address is the sheer $$ volume and mass global rush to make the breakthrough battery system-- that will simply KILL the ICE (Internal Combustion Engine) in all aspects of performance, range, maintenance costs, number of parts, less stink, emission free, no oil, sustainability-- and you will NOT be able to commit suicide, like we are on a global atmospheric level, by sitting in your garage with the car running. :)
     
    Post Reply
    +1
    Bad stuff?

  21. "Elon Musk half of all cars built in 2032 will be electric"......he'd better hope so or he'll be crying for another bailout!
     
    Post Reply
    -2
    Bad stuff?

     
  22. @Matt: I'm not aware that Musk or Tesla has ever been "bailed out," do please elucidate. Or are you referring to the DoE low-interest loans granted to Tesla Motors? Rather different from the bankruptcy and government-led restructuring of GM and Chrysler that's the commonly accepted use of "bailout," no?
     
    Post Reply
    Vote
    Bad stuff?

     
  23. http://blog.mlive.com/businessinnovation/2009/06/tesla_motors_blessed_with_fede.html

    "Tesla Motors, blessed with federal retooling loans, trails General Motors on mass electric vehicles"
    Retooling Loans = A Bailout(elucidated) :-)
    The only way Tesla Motors will survive beyond two more years is to partner up with a European or Japaneses deep pocket investor. Given that the Global Economy is walking on thin ice I don't see anybody dumping big bucks into Tesla Motors.
     
    Post Reply
    -2
    Bad stuff?

     
  24. @Matt: Ah, so then clearly you view Ford ($5.9 billion) and Nissan ($1.6 billion, of which it used only $1.4 billion) as having been similarly "bailed out" by the Feds?. Just checking ...
    http://www.greencarreports.com/news/1021697_advanced-auto-tech-loans-go-to-tesla-ford-and-nissan
     
    Post Reply
    Vote
    Bad stuff?

     
  25. IMHO if it walks like a duck and quacks like a duck then it's a duck.
    -1
    Bad stuff?

  26. @Matt: Tend to agree with you that Tesla will not remain independent; will be curious to see when its venture backers feel the optimum time is to peddle it.
    http://www.greencarreports.com/news/1060551_elon-musk-says-tesla-wont-be-sold-but-elon-musk-is-wrong
     
    Post Reply
    Vote
    Bad stuff?

     
  27. http://www.kurzweilai.net/elon-musk-bets-half-of-all-cars-built-in-2032-will-be-electric?utm_source=KurzweilAI+Daily+Newsletter&utm_campaign=79ed5e5c99-UA-946742-1&utm_medium=email
    Hurst suggests that for plug-in vehicles to grow at the rate Musk predicts, three things will have to happen.

    First, plug-ins must spread from small cars into full-size sport-utility vehicles and pickup trucks, which remain a huge portion of the U.S. market. Second, an oil price shock would have to drive gasoline prices to $8 or $10 a gallon.

    And, he suggests, drivers will have to get comfortable with overnight recharging and limited vehicle range — and the public charging infrastructure must grow to support those volumes of plug-ins on the streets.
    Vote
    Bad stuff?

  28. I'm with Elon. Just like LED lighting, once people see how much better it is (because enough products are available), they stop buying the old (out of date, non fashionable etc) stuff. iPod or cassette tape anyone?
    With the range issue sliding away, there is becoming no choice, its EV all the way.
     
    Post Reply
    +2
    Bad stuff?

  29. http://www.reuters.com/article/2009/07/23/usa-electricity-grid-idUSN2341794420090723

    U.S. electric grid needs major overhaul-utility

    I don't see this happening for many years to come given the level of debt the US is carrying on the books.
    Until the US starts investing in modernizing our national electrical grid system then I see EV's/Hybrids as a niche market.
    The Federal Govt. and the DoE do not share the same vision as the GP(general public)in making the US energy independent or we would be investing monies at home rather than putting it in waging wars be they real or fabricated.
     
    Post Reply
    +1
    Bad stuff?

     
  30. Solar PV, wind, and other renewable energy at residences, goverment, and businesses will vastly improve the EV charging capacity. Faster charging, longer EV ranges, and especially charging at night will also prove you wrong as plug-in vehicles really take off in to high production later this decade and EVs early next decade.
     
    Post Reply
    Vote
    Bad stuff?

     
  31. Solar n wind electricity at current gas stations too to eventually switch some or all of their "pumps" to EV charging.
     
    Post Reply
    Vote
    Bad stuff?

  32. Pike is fundamentally wrong on some key things. First, gas prices don't need to be $8/gal (which they are in much of the world anyway). $5-6 is plenty to radically alter the payback time on an EV. Second, Pike is clueless on EV costs. Today, the Leaf is a $25K (after incentives) 80-mile car. They don't consider it plausible it will be a $25K 200-mile car in 10 years -- but it will. Just do the math on the battery costs and believe Tesla here over Pike. I doubt there'll be any 80-mile EVs. Probably some low 100-mile models as well as models up to 500 miles of range. The amount of public charging needed is surprisingly small in such a world.
     
    Post Reply
    +1
    Bad stuff?

     
  33. Finally at the end I read a comment that makes some of my points.
     
    Post Reply
    Vote
    Bad stuff?

  34. Hurst is likely to lose the bet to Elon. I offer the following reasons:

    1) The use of Pike's research is rendered moot because Musk's statement was not confined to the US and there is no evidence telling us that he was only speaking about the US.
    “In 20 years, more than half of new cars manufactured will be fully electric,” Musk said during the June 22 launch of the production 2012 Tesla Model S electric sport sedan at the Fremont, California, plant of Tesla Motors

    2) So, lets think of the world and how the world is changing in the next 20 years when breaking down this bet:
    A. Most of the world and growth of the world, population wise, is located in areas with little fossil fuel production. China, India, and Brazil to name a few.
     
    Post Reply
    Vote
    Bad stuff?

  35. B. These countries and most other growing population centers produce little of their own oil to use in their ICE vehicles yet their rate of car ownership is increasing significantly each year. These countries and nearly all that do not have reserves of oil have a built in incentive to adopt a more stable, cost effective and healthier fuel for their vehicles. Brazil has done wonders with sugar cane based ethanol but its use is limited.
    C. It is in these non-oil producing countries, especially China, where small EVs will likely dominate sales early next decade as China will very likely to decide, as a command n control nation can, switch to electricity as fuel for most vehicles instead of always searching for new oil all over the world.
     
    Post Reply
    Vote
    Bad stuff?

  36. 3) Other areas where cars will continue to be used widely such as Europe and North America will likely have gas/diesel prices into the teens about a decade from now. Oil reserves are not running out around the world yet but oil will be more difficult n more expensive to obtain. Additional taxes, supply shocks, and continued steady demand will keep prices high.

    4) Pike's assumptions on the charging and range of EVs for next decade let alone later this decade are just laughable. Range for every new EV next decade will likely be at least 200 miles(400+ for some) and charging times down to less then hour...not that u care as your car charges overnight or at work...if needed. Think of where mobile phones were just 4 years ago...progress
     
    Post Reply
    Vote
    Bad stuff?

  37. The price of oil alone will be the main catalyst in the changeover, battery price will become far less important as the charge infrastructure develops and charge time drop.

    Elon is entirely correct.

    (written as a Leaf owner)
     
    Post Reply
    Vote
    Bad stuff?

 

Have an opinion? Join the conversation!

Advertisement

Find Green Cars

Go!
Advertisement

Advertisement

 
© 2014 Green Car Reports. All Rights Reserved. Green Car Reports is published by High Gear Media. Send us feedback. Stock photography by Homestar, LLC.