Crossing the tipping point of electric car adoption

Crossing the tipping point of electric car adoption

Subject :Economy

Section: Infrastructure

Context::: The critical EV tipping point is at 5 per cent of new car sales. This threshold signals the start of mass adoption, when technological preferences rapidly flip.

Key Points:

• Why 5 per cent is so important ?
  • Most successful new technologies like televisions, mobile phones, LED lightbulbs follow an S-shaped adoption curve. Sales move at a crawl in the early-adopter phase, then quickly once things go mainstream.
  • In the case of fully electric vehicles, 5 per cent seems to be the inflection point.
  • The time it takes to get to that level varies widely by country, but once the universal challenges of car costs, charger availability and driver skepticism are solved for the few, the masses soon follow.
• Countries that cross the tipping point have seen rapid rates of adoption, with a median sales growth of 55 per cent last quarter compared to the same period a year ago.
• The EV tipping point for the world was passed in 2021. 19 countries have passed the critical EV tipping point.
• In case of India EVs made up 3 per cent of new car sales in the country last quarter, after doubling in just six months.
• As with any new technology, growth rates will eventually slow as a market nears saturation — the top of the adoption S curve. There will always be holdouts. In Norway, the world’s EV pioneer, growth appears to be slowing after reaching 80 per cent of new vehicles.
• So is mass adoption now guaranteed ?
  • Even the most careful outlooks can be knocked off course by supply-chain disruptions, economic shifts, politics, bankruptcies and popular culture. So, it is likely but can always fail due to such reasons.

The advantage of the tipping-points approach is that it reveals a range of adoption curves that are at least known to be possible because they’ve already occurred.