The combination of electric cars and grid electricity generated from renewable sources could mean the end of fossil fuels, but how long will that transition take? Electric cars and renewable energy still represent fairly small segments of their respective industries, but there is some optimistic analysis about their futures.
Growth in electric-car sales and the use of renewable energy could lead to the “collapse” of the oil industry by 2030, according to Seeking Alpha. That prediction is based on several factors, including steadily-growing rates of renewable energy use, and the potential implementation of stricter government policies to limit carbon emissions, resulting from the climate-change agreement recently signed in Paris.
Both areas can expect some growth. Electric-car sales have increased steadily since they first became available in large quantities five years ago. And automakers may have to build more of them to meet tightening global emissions standards. Audi has said it expects plug-in cars to comprise one quarter of its U.S. sales by 2025, an increase it feels is necessary because of emissions rules. That includes the looming Corporate Average Fuel Economy (CAFE) mandate, which requires carmakers to achieve a fleet average of 54.5 mpg (actually closer to 40 mpg in real life).
The carbon footprint of an electric car is lowered even further by renewable energy, which is also on the rise. Renewable sources like wind and solar make up less than 1 percent of the global mix, but they’re growing faster than fossil fuels. In 2013, the world added 143 gigawatts of renewable-energy capacity, compared to 141 gigawatts for fossil fuels, Bloomberg reported earlier this year. Analysts expect that trend to continue, so that by 2030, four times more renewable-energy capacity will be added.
Of course, prices are crucial to the success of both electric cars and renewable energy. On the car front, many analysts expect the price of lithium-ion batteries to drop to the point where electric cars will be cost-competitive with internal-combustion cars soon. Both General Motors and Tesla plan to launch 200-mile electric cars for around $35,000 in 2017. Meanwhile, solar power may already be cost competitive with fossil fuels in some areas. Last year, Energy Secretary Ernest Moniz said renewable energy no longer needs government subsidies to be competitive.
But does that mean the oil industry will be gone in less than 15 years? For that to happen, all of the internal-combustion cars already on the road will have to go away, and that will take awhile. Among nations, Norway has proposed eliminating internal-combustion cars by 2025. The International ZEV Alliance, a coalition of governments including Germany, The Netherlands, the United Kingdom, and several U.S. states, wants to make all new cars emission free by 2050.
But even if all new cars are electric, it will take time for manufacturers to transition their model lineups away from internal combustion. And given that the average age of a car on U.S. roads is over 11 years, it will take quite awhile for consumers to trade in all of their gasoline and diesel vehicles. While those cars are still on the road, the oil industry will still have business.