“The car market is at the start of a major transition,” writes Chris Umiastowski in the Toronto Globe and Mail. “The electric-car market…faces an enormous growth curve that is not well understood by the general public.”
Umiastowski’s main point is to explain why he’s bullish on the stock of Tesla (Nasdaq: TSLA), but his article makes a well-stated rebuttal to the “EVs will never sell” articles that continue to appear regularly in the mainstream press (and in some publications that should know better, such as Wired).
Noting that he’s a long-term investor, interested in trends that may require a decade or longer to play out, Umiastowski says that the future of EVs “serves as a great example of long-term thinking versus short-term crowd mentality.”
As most Charged readers already know, most of the anti-EV arguments are based on misinformation. “I hear people say electric cars are just glorified golf carts that are slow and unable to travel very far,” writes Umiastowski. “People also worry that it will be a hassle to recharge their battery, and that after three or four years, it will die, because that’s their experience with laptop computers.”
Mr U proceeds to debunk these misconceptions one by one: “Electric cars have impressive acceleration because electric motors deliver full torque from a standstill, unlike internal combustion engines. Tesla is removing the distance barrier. Their Model S sedan can travel over 400 km on a single charge. Even more impressive, they’re building a network of supercharging stations that Tesla owners can use for free during road trips. And forget about getting gouged at the pump before a long weekend: Just plug in at home and wake up with a fully charged battery every day. Tesla guarantees the car’s battery for a full eight years, and actual data from Tesla’s first-generation [Roadster] backs up the expectation of an even longer battery life.”
Umiastowski believes that battery cost and low production volume are the two main reasons that EV prices are still so high. He points out that “most new product categories start out with high price tags and then go on to see staggering price drops over time,” thanks to improving technology and volume increases.
Umiastowski doesn’t find an eventual explosion in EV sales hard to imagine. “It has happened in other industries before, and it only makes sense to me that it will happen again. Today, the cost of building a high-quality electric car puts the price tag beyond the reach of most people. Combine that with a general lack of knowledge on the part of the investing public and you have a recipe for lots of non-believers. That’s how most growth markets operate. It’s nothing unusual.”
Source: Toronto Globe and Mail