While charging infrastructure and range limits remain a concern for EVs the fact they are much cheaper to manufacture on a large scale than their petrol powered cousins will see a shift in the market by the middle of the next decade according to James Leake, an analyst at NS Lemos.
Speaking at the Bimco Power Panel at Posidonia 2018 Leake said: “EVs do represent a serious threat but not for the time being, if you ask me to put a date on it 2025 would be the point where it really starts to hurt.
“What is to me the killer fact is ultimately manufacturing an electric vehicle is much cheaper than manufacturing an internal combustion engine when you are producing them on scale.”
An electric powered car requires significant less components than one with an internal combustion engine making the structural production cost lower if the scale is large enough, and this why Leake said the likes of Volkswagen is investing $40bn into electric cars with an aim to be the world’s number one player in electric mobility by 2025.
With lower production costs car manufacturers will be much more keen to sell electric powered vehicles than petrol ones. “We will educated as customers to buy the product that will give them a higher profit.”
The issue for shipping will be that as the number of EVs grows this will impact demand growth for gasoline and diesel. “I’m not anticipating we replace gasoline or diesel as a fuel for transportation, the problem is what modest growth we rely on at the moment to support newbuilding investment, that growth becomes flattening and then declines, and that becomes a problem because people are still building ships in a sinking market,” he stated.
On the question of charging infrastructure Leake cited the entrepreneurial opportunity to turn every lamppost into a smart charging grid.