A reflection of 2020 and several forecasts to predict electrification trends the market can expect to see in 2021 and beyond.
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The year 2020 didn’t just bring the world a global pandemic. It also marked a record fall in fossil-fuel emissions. At the same time markets dipped, the clean energy sector had explosive growth. Overall car sales were sluggish, but EV sales were up 43%. The year 2020 was the year electrification became mainstream.
We’ve reflected on 2020 and several forecasts to create three predictions around electrification trends the market can expect to see in 2021 and beyond.
Renewed Commitment to Global Emissions Targets Fueled by Economic Incentives
Sustainability conversations have never been more prevalent on a global scale. According to the UN, 2019 was the second warmest year on record. And, while greenhouse gas emissions were projected to drop by about 6% in 2020 due to pandemic-related restrictions, many have quickly recognized that the post-pandemic world is on track to pick up where 2019 left off. As the UN puts it, “Climate change is not on pause.” This year, we can expect a renewed commitment to The Paris agreement to limit global temperature rise to well below 2 degrees Celsius, in which many countries have pledged.
Governments across the globe are leaning on economic incentives to entice the switch from fossil fuels to renewable energy in order to meet emissions targets.
In Britain, the country is setting out to be the world leader in offshore wind. Prime Minister Boris Johnson has pledged to ensure that offshore wind farms will generate enough electricity to power every home in the UK within the next decade.
Other countries are designating power to the pedalers. As a means of improving air quality and easing city congestion, governments in France, Scotland, Sweden and more have implemented ebike rebate, subsidy or grant programs to encourage adoption and usage over gas powered vehicles. Since 2019, British Columbians in Canada who scrap their old gas guzzling vehicles can receive a $1,000 credit towards an ebike.
With the new administration in the White House, changes driven from Washington are on the horizon. The US is expecting to significantly increase climate investments, as Biden campaigned on rejoining the Paris agreement and investing $400 billion over ten years into clean energy and innovation. It’s early days into the new administration, but Americans can expect stricter regulations and broader incentives to switch from fossil fuels in the near future.
Clean Energy Market Growth via Special Acquisition Purpose Companies (SPACs)
With both retail and institutional investors latching onto sustainability trends, 2020 saw large upward growth in the clean energy sector, which is expected to continue into 2021. One example showing clean energy market growth is the iShares Global Clean Energy ETF (ICLN) which includes most of the sector’s significant players and increased in value by over 140% in 2020.
Along with this there have been a number of companies, particularly in the clean energy and transportation spaces, accessing public markets through special purpose acquisition companies, better known as SPACs. SPACs are companies that are established solely for the purpose of generating cash through an IPO in order to merge with a private company. Private companies are choosing this route as opposed to a traditional IPO for a number of reasons, including:
Closing the Gap on Commercial Vehicle Electrification
Electrification adoption has been largely light-duty focused around ebikes, emotorbikes, escooters, ecars, etc. For several reasons, including battery cost, electric technology performance, OEM priorities, emissions regulations, and consumer adoption, light-duty has paved an easier path to electrification.
But, electric technology continues to improve, and as it improves, costs come down. At the same time, reduced emissions regulations are growing beyond the light-duty space. The year 2021 will mark a fundamental shift towards commercial vehicle electrification across light commercial vehicles, medium-duty, and heavy-duty.
Commercial vehicle landscape electrification will face challenges not unlike those initially found in light-duty; things like battery cost, charging solutions, and maximum range, torque, and performance. But the applications and uses cases significantly vary between light-duty and heavy-duty. A commuter relying on an ecar has quite different needs than a garbage truck or coach bus.
Maximizing performance and scaling across all applications comes down to technology innovation. Through lowering the cost of batteries, extending battery life, creating efficiencies in drivetrains, and implementing rapid charging solutions, this year we’ll reach a tipping point where the business case for heavy-duty electrifications is not a matter of how but when.
Interested in learning how the Exro Coil Driver™ creates the gradeability to go further, expands towing capacity, and enables more routes with less charging? Talk to us about starting a simulation of your application with our technology today.