This is the current state of global electric vehicle adoption:
Last year was the first year that global electric-vehicle sales reached 10% of all car sales -- the total was around 7.8 million cars (see above chart)
Fully-electric vehicles accounted for about 5.8% of all car sales in the US, 11% of all car sales in Europe, and about 19% of all car sales in China -- China is leading in this department
The US saw 807,180 fully-electric vehicle sales last year -- Tesla remains the biggest EV maker in the world
In Germany, electric vehicles accounted for about 25% of all new vehicles produced last year -- BMW reported a 5% decline in new-car sales, but saw its EV sales more than 2x
Similar story with Volkswagen: 7% decline in new-car sales; 26% increase in EV sales
This year, some are predicting that China will see EV sales increase to every third car, and that it will reach its tipping point sometime between 2025-2030
It is obvious where all of this is heading. It is simply a question of how fast, and who will be the leaders at the end of the day.
All data sourced from the WSJ
According to this recent New York Times article, California is set to put into effect a new mandate that would require 100% of passenger vehicle sales in the state to be fully electric by 2035. Included within this mandate are also interim targets: 35% of all sales by 2026 and 68% of all sales by 2030.
When I first read the article, my first thought was: "Isn't 2035 kind of far away? Can't we do this sooner?" And this is usually how my mind works when I see some date in the future. But then I remembered that EV sales last year in the US only totaled somewhere around 5% of all sales.
So there is work to be done, and mandates like this will certainly help. As I understand it, this will be the first mandate of its kind in the US and also one of the strictest in the world. A lot of other countries have simply set targets, rather than all-out bans.
This is what it means to lead. You do things before others.
So here's the thing. The whole reason we are all talking about how to build more sustainably is that there isn't often a quantifiable ROI for doing so. If building a net-zero building cost less than building a regular building, everybody would be building one. But that is not the case, which is why our industry, and others, are grappling with how to justify the added costs, even though we all know it's absolutely the right thing to do.
The questions we are asking ourselves look something like this: If I spend X% more on this build, what kind of rent premium could I command? And in some cases this premium is quantifiable and in some cases it matters a great deal. For instance, in the case of a new office building, you might need to spend the extra money so that you can attract the right tenants. While in other cases/asset classes, you might feel as if there's no rent premium and nobody will ever pay more.
But I like how Seth Godin thinks about it in this recent post: people never pay extra. If you're paying more for an electric car, for example, you aren't actually paying extra. What you are paying is a price that you feel is fair for what you are receiving. And what is it that you're receiving? Well, in this case, you're getting an electric car, but you're also buying in Seth's words, "sustainability, community awareness, cachet, status, safety, quiet, and the feeling of being an early adopter."
These things have value to some people. And as long as you can deliver on your promises, extra isn't extra at all. But perhaps more importantly, this early adoption can help encourage change. Electric cars are becoming cheaper and cheaper, and I think it's pretty clear that they will soon replace combustion engine vehicles. This model of starting at the top of the market and then moving down seems to have worked.
Now, the auto industry isn't perfectly comparable to the building industry. They have been good at improving productivity and bringing down costs, and we have been awful at it. Depending on how you measure it, construction productivity growth over the last half century is sitting somewhere between flat to some negative number. But I don't think this dubious achievement changes Seth's message. Think about what you're offering. Maybe extra isn't extra.