The demand for electric cars has risen over the precedent four years mainly the plug-in vehicles whose demand has increased from 3500 in the year 2013to 137 000 in 2018. There has also been a tremendous increase in the demand of the pure-electric cars mainly in the United Kingdom. These electric cars are run through the use of batteries which are rechargeable, and they are becoming popular due to the rise in the cost of fuel. According to a research carried out by a consulting firm known as McKinsey & Co. on the electric cars, it was established that out of the 30% of vehicle buyers surveyed in the United States, only 3% of them had purchased the electric cars. In countries such as Germany out of the 45% buyers surveyed, only 4% of them had purchased these cars (Sovacool & Hirsh, 2009). In Norway, 22% of the potential buyers had purchased these vehicles due to the increased government subsidies. The General Motors group is intending on to produce more than 20 new electric vehicles by 2023.
The sale of these electric vehicles mainly depend on the federal and the state tax law in the countries they are manufactured, and also the environmental goals as well as the sales and promotion regulations set. These electric cars are simpler to operate than the internal combustion engine vehicles. The primary revenue in this area is attributable to the services provided but the electric cars as well as the data (Tollefson, 2008). The automakers feel that they can earn profits from the data gathered such as the commuting patterns, dining and shopping habits, by selling this information to other users.
Electric cars are viable in terms of profits due to the flexibility of the automakers to meet the user’s needs. This is because the automakers such as the General Motors group are committed to manufacturing cars that are customer driven. Manufacturers such as those of Toyota have enjoyed the current generation of hybrids through building consumer brand awareness, the technical know-how, and building intellectual property.
There is also an anticipation of the future reduction in the cost of batteries, and an expected increase in the prices of fuels, and this will boost the unconventional of consumer awareness in high priced electric cars. The cost of the batteries has been decreasing by about five percent, while that of fuel is volatile due to changing economic conditions (Tollefson, 2008). In such as Europe, there has been a meaningful operating cost saving on the countries on the electric cars due to the taxes imposed on gasoline, and this has led to increase in demand for electric cars.
Electric cars are profitable due to the forthcoming emissions and consumption regulations in the United States and Europe, which will demand higher fleet average fuel economy from the automakers (Romm, 2006). The General Motors will thus likely be exempted from penalties and increased expensive technologies related to the increased fleet fuel economy, if they generate an increase in their sales. The electric cars are likely to emit lead which will reduce the urban ozone problem. The ability to have a positive impact on the environment should apply in the development of various products. That will also make it possible in fostering sustainability and making it possible to improve the living standard of individuals in most occasions.
Romm, J. (2006). The car and fuel of the future. Energy Policy, 34(17), 2609-2614.
Sovacool, B. K., & Hirsh, R. F. (2009). Beyond batteries: An examination of the benefits and barriers to plug-in hybrid electric vehicles (PHEVs) and a vehicle-to-grid (V2G) transition. Energy Policy, 37(3), 1095-1103.
Tollefson, J. (2008). Car industry: charging up the future. Nature news, 456(7221), 436-440.