Electric Cars: Climate Savers or Wallet Drainers?
Author: Daan Schrage
January 22, 2021
If you follow the stock market even a little bit, you will have probably heard of Tesla’s meteoric rise. The American car manufacturer’s stock had a gain of 700% over the course of 2020. Meanwhile in Europe, Norway became the world’s first country where electric vehicles reached a larger market share than traditional, gas-powered cars. With a share of 54%, that shot up to almost two-thirds in December of last year, the Nordic country is on track to hit its goal of ending the sale of gas-based cars by 2025. It is clear that no matter where you look, electric cars are all the rage these days. An exciting development, as the world continues to wrestle with the issue of climate change. But are these electric cars actually better for the environment? Or are there hidden costs involved that go ignored?
Opponents of electric cars will be quick to point out that the production of an electric vehicle produces more greenhouse gas emissions than the production of a traditional car. The average non-electric car produces emissions worth about 5.6 tons of CO2 during production, whereas an electric car produces around 8.8 tons, half of which is the battery itself. However, over a car’s lifetime, electric or not, most carbon emissions come from vehicle operation, and this is where electric cars shine. As electric cars need to be charged from the grid, how environmentally friendly it is depends on the electricity grid mix of the country it is being used in. An electric car being driven in Poland would have to drive many more kilometers in order to break even with a traditional car, than one being driven in Sweden. Because of this, whether or not an electric car is more environmentally friendly than a gas-powered one depends a lot on the researcher’s assumptions when it comes to countries like Germany or Poland. However, if we are talking about countries like France, Sweden, and Norway, the climate benefits are a lot more clear, as these countries already have a largely sustainable energy grid. On top of that, energy grids across the world are predicted to become greener over the course of the next decade, to keep up with the demands set by the Paris climate accord. If that is taken into account, electric vehicles come out on top, as the reduced emissions during the life of the car will more than make up for the excess emissions of greenhouse gasses during production.
What about consumers, though? Electric cars are often expensive, after all. And it is not like the parts needed for maintenance are any cheaper either. However, as it turns out, electric cars need repairs much less frequently, meaning owners will save around 50% on repairs on average. This fact, combined with the significantly cheaper charging, means that the average monthly cost on an electric car is often much lower than that of traditionally used cars, over the lifetime of the car. This is especially true when buying a more budget-friendly option, such as the Nissan Leaf. And this is before taking into account any kind of government tax credit you might receive when purchasing an electric vehicle. If you are still hesitant to buy one, you might not be for much longer. There is growing evidence that electric cars will become more affordable in the future, as battery costs continue to fall. The average market price for a battery pack is expected to be around $101 per kilowatt-hour in 2023, with $100 per kWh being the price for which electric cars are expected to match gas-powered cars in price. Furthermore, predictions say that the price per kWh may even fall to $58 in 2030. In the future, electric cars might even be cheaper than the alternative.
All being said, it seems that there are clear benefits to owning and driving an electric car. While it is true that these benefits are right now in large parts dependent on where you live, and how much you drive, it looks like that will all change. In the near future, both prices and carbon emissions for electric vehicles will fall, ensuring that they will be the better choice, both for the planet and for the consumer.
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