Compared to regular gas cars, electric cars have a favorable fuel economy and can be operated at a lower cost per kilometer . This means that using an electric car can be cheaper compared to traditional cars. For instance, in Germany, the operation of an electric vehicle (assuming average conditions) can be up to 30% cheaper per kilometer compared to equivalent gasoline cars . Evidently, this cost advantage depends on energy and gasoline prices as well as holding period, however.
Electric vehicles also produce no local pollution during operation. If the car is charged using renewable energy, driving also produces next to no emissions overall. As road traffic accounts for roughly 18% of CO₂ emissions worldwide , the move to electric vehicles could therefore reduce CO₂ emissions significantly. Taking into account the production of the vehicle, EVs are also more eco friendly than traditional cars. Operating an electric vehicle in Germany today (including production) is estimated to reduce greenhouse gas emissions by 28% to 42% compared to gasoline cars. Assuming that 100% of the electricity drawn comes from renewable sources, emissions could be reduced by roughly 70% . Other studies estimate greenhouse gas emissions to be around 37% lower in 2020 and project them to be around 65% lower than gas cars by 2030 .
However, it is important to emphasize that these projections are based on underlying assumptions that not everyone agrees with. For example, the overall comparison between the environmental impact of producing combustion engines and electric cars is difficult. This is due, for example, to the fact that the necessary raw materials and life cycles of the cars or engines are very different .
It is also important to stress that a realistic calculation of the environmental impact of car operation is complicated as well. For instance, as mentioned above, their true environmental impact depends on the electricity mix used for charging the car as well as for production . Currently, the energy mix in Germany makes operating an electric vehicle more environmentally friendly compared to gas cars.
For electric vehicles, consumer hesitance is also a relevant issue. Despite significant improvement in electric vehicle technology, a larger part of consumers remains loyal to combustion engines. For instance, more than half of car buyers in the US and Germany still prefer combustion engines for their next car . When looking at car registrations, sources point to only five to ten percent of sold cars in developed countries being electric . Hence, judging by buyers' intent and actual car sales, electric vehicles have not become fully mainstream yet.
This hesitance may be related to a performance gap between combustion cars and EVs. A 2020 study among 9,000 car owners across 8 core markets identified the four most important factors for EV mass adoption as price, charging time, range and charging infrastructure. The target price, range and charging speed was expected to be $36,000, 469km and 31 minutes for a full charge respectively, in order to achieve mass adoption . Generally, electric vehicles do not meet these targets yet. For instance, out of the ten best selling electric vehicles worldwide in 2020, none can hit all three targets . However, electric vehicles may profit from a general desire of consumers to reduce their impact on the environment. For instance, a 2021 customer survey among American drivers estimates that 23% of them would consider buying an EV as their next car, citing the reduction of their environmental impact as the top reason to do so .
While range and price are expected to improve with better and cheaper battery technology, real-world charging speed depends to a large part on infrastructure. Furthermore, the success of electric cars also depends on the coverage and availability of supporting infrastructure as a whole.
A modern electric car uses roughly 29 kWh per 100 miles  - or 18 kWh per 100 kilometers. The average car in Germany is estimated to drive 14.700km per year , which would result in energy consumption of 2.646 kWh per year for an electric car. For comparison, German households owns 1 cars on average  and used 17.678 kWh in 2019 , meaning that owning an electric car would on average increase their electricity consumption by about 15%. From these estimates, it is evident that widespread adoption of electric cars would not only require adequate charging infrastructure but also a significant increase in supply of electric energy overall.
Electric vehicles are the most imminent trend in the automotive industry right now. As their operation doesn’t produce any local emissions, they are a great fit for urban areas. However, it is important to acknowledge that the production of electric cars is not free of emissions and their environmental impact critically depends on how we produce electricity. Therefore, their emissions overall depend on broader developments in energy infrastructure.
Compared to gas cars, the practical utility of electric cars is virtually unchanged. For private use (e.g. for commuting), it therefore makes little practical difference which car you drive. For this reason, we assume that innovation in this area will have no significant impact on traffic flow or capacity. However, as stated above, electric cars can still improve local pollution, which can have a positive impact on quality of life.
As the average car trip is around 40km, current electric vehicles are already able to replace combustion cars for most use cases. Granted the right energy mix, they produce significantly less emissions overall. Furthermore, they are also cheaper to operate in many cases. We therefore expect electric vehicles to play a bigger role in the future and potentially replace combustion engines as the main powertrain technology in cars in the long term.
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