J.P Morgan Sees Electric Cars As Wide-Scale Disruptors

1 month ago by EVANNEX 21

Electric Cars

Many people believe that the Tesla Model 3 will play a substantial role in the widespread adoption of electric cars.

J.P. MORGAN: ELECTRIC CARS WILL DISRUPT A MULTITUDE OF INDUSTRIES

By now, everyone who’s paying attention understands that fossil fuel vehicles are going to be replaced by electric vehicles.

However, there’s a wide gulf of disagreement about the timeline. Those who make their living in the oil and auto industries tend to see the transition happening in their grandchildren’s time, while some in the EV and renewable energy fields predict that it will all be over by 2030.

Electric Cars

Companies like Tesla may soon pose a threat to the oil industry (Instagram: teslaownersitalyticinorsm)

J.P. Morgan Cazenove has joined the ranks of those who believe the revolution will happen sooner rather than later.

In a note to investors, the investment bank said widespread electric car adoption will happen faster than many analysts expect (as reported by CNBC). J.P. Morgan noted that the price differential between legacy vehicles and EVs is gradually narrowing as battery prices fall, but that once a certain tipping point is reached, things could start happening quickly.

“Concerns about scrap values of internal combustion vehicles (ICVs) may drive consumers towards EVs even before the price differential between the two classes of vehicles closes,” wrote J.P. Morgan’s analysts.

They predict that electric cars could account for 35 percent of the global auto market by 2025, and 48 percent by 2030.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris.

Electric Cars

Some big companies may face extinction if they don’t pivot to address changes fast-approaching in the automotive and energy sectors (Instagram: aldogrech)

Automobiles are intimately involved in every aspect of today’s society, and the transition from gas to electrons will affect a wide range of businesses. Ironically, automakers may not be among the big losers. J.P. Morgan notes that they can replace their gas and diesel cars with electric models, but other related businesses might not be able to adapt.

Electric vehicles have much lower maintenance costs, and that’s bad news not only for mechanics but for car dealers as well. “EVs have 20 moving parts compared to as many as 2,000 in an ICV, dramatically reducing service costs and increasing the longevity of the vehicle,” the analysts said. “We see this as a meaningful risk for car dealers who rely on after-sales service for a large chunk of their profitability. This should over time reduce the number of vehicles sold as well, in addition to other potential trends, such as automated driving and greater car utilization rates.”

Electric Cars

Inside a Tesla Model S 85kWh battery pack (Instagram: electricgte)

The lower number of parts in electric cars also makes them less complicated to build, J.P. Morgan noted. That could be bad news for automotive suppliers, although those that focus on the newer technology may prosper. Good news may also be in store for makers of semiconductors. “A typical EV uses two to three times the dollar value of semiconductor constituents, compared to an ICV,” the analysts wrote, adding that semiconductors were also used in charging stations. (Another product that’s used in large quantities in EVs and charging stations: copper.)

The auto finance industry could also be among the fallen. The scrap values for legacy vehicles will drop significantly, lowering the amount of money companies can recover when they repossess the cars. Consumers are also likely to keep their electric cars longer, lowering the demand for auto loans.

Electric Car

Tesla Model S on top of the rubble (Instagram: teslaownersitalyticinorsm)

Unsurprisingly, Big Oil is expected to be a victim of the new technology. J.P. Morgan notes that passenger vehicles account for 20 percent of global oil demand, which it predicts could fall by around 15 percent by 2035.

And the winners? The new report didn’t mention Tesla, but we will, of course, make no such omission. The biggest winners, however, are likely to be consumers, who will not only be breathing cleaner air but saving some serious money as well. J.P. Morgan writes that, in the US and the Euro zone, personal vehicles and gasoline account for 8 to 10 percent of total consumer spending.

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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21 responses to "J.P Morgan Sees Electric Cars As Wide-Scale Disruptors"

  1. Will says:

    Lucky they held thier tesla bias

    1. Four Electrics says:

      Indeed, I have yet to see any article from this Tesla-dependent business that isn’t rah-rah-rah all the time.

    2. Nada says:

      It js not like there are more pictures of Teslas than actual article…

      They also missed the most revelavant thing from Morgan last week and that is a chart showing that a 50kw BEV only costs 19,500 Euros to build today in 2017 and not in the future…

      1. John Norris says:

        50 kWh

      2. Mark C says:

        They could’ve pictured the Smart ED since there were a few of those sold, or perhaps the e-Golf found in some compliance states, or the available everywhere Focus EV that none of the dealers I can find will stock, or…

        They could picture Tesla vehicles, which are driving a revolution in transportation and creating the most excitement with long range, good looking cars.

        I know which one I would choose

    3. Rick says:

      Tesla started it all. Why not.

  2. JR says:

    JP is all in it for the money, and specially the Tesla share is a emotional one. and they will get out with other reports pointing in different directions when ever it suits them and there investments!

    1. Will says:

      They didn’t report on the tesla but on the whole ev revolution especially from this tesla fanboyish site

  3. wavelet says:

    JPMorgan, ya think? I’m speechless.

  4. Pushmi-Pullyu says:

    “EVs have 20 moving parts compared to as many as 2,000 in an ICV…”

    That appears to be an exaggeration in both directions. ICEngines have about 200-300 moving parts vs. just one for an electric motor, and the difference between pure EVs and ICEVs shouldn’t be much more than that. Passenger car EVs need suspension systems, wheels, steering mechanisms, and drivetrains… just like gasmobiles. Surely all that amounts to more than 20 moving parts!

    1. SJC says:

      A six, seven, eight, nine speed transmission has LOTS more parts than a simple reduction gear set.

    2. Jake Brake says:

      We dont count igbts as moving parts because its too much thinking.

    3. ffbj says:

      They probably count buttons as moving parts.

  5. E-Ray says:

    Well, here is a list of legacy ICE services I haven’t used in the almost 18 years I’ve been driving my 2000 Ford Ranger EV:

    What auto shops EVs don’t need:
    Smog check
    Tune ups
    Oil change
    Muffler repair
    Transmission repair
    Starter/generator/alternator repair
    Radiator repair (maybe if I ever use the A/C)
    Gas stations

    1. ffbj says:

      Cool. What is it a conversion? Obviously.

      1. E-Ray says:

        No, I snagged one of the 1,200 Ranger EVs made in 1998-2001. They were supposedly made for fleets, and were only available for a $399/month 3 yr lease, but CA subsidized it down to $199/ month. First ones had lead acid batteries, but later models had NiMH (as does mine). They were all pulled back to Ford around 2004, but a few lessors were able to buy them out for $1 (as did I!) when Ford mishandled the option-to-buy in our contracts. They actually refurbished a few that they recalled back and sold them for $6,000, and there are still a few dozen still around the U.S. The Ranger just keeps on going and going and, with the help of a Yahoo Owners Group, we have been able to keep them alive. I have over 66K miles, which means about 4,500 miles per year, but it has been my main commute and weekend chore vehicle totally gas-free! It has a 1,000 lb. payload, and I have hauled more than that many times. Check Wikipedia for “FOrd Ranger EV” and “Lease Return Resistors” for some additional info.

  6. Rick says:

    Without Tesla we’d be sucking 10$ gas. Bravo Mr. Musk.

  7. Stephen Pollock-Hill says:

    J.P. will be spnning in his grave. This is the man who arranged the merger between Edison General Electric and Thomson-Houston electric Company to form General Electric! He would have favoured EV’s. On his death in 1913 he left $80m John D. Rockefeller commented, ” and to think he was n’t even a rich man”, ( $80m then would be $1.43bn today, so , yes he did die a rich man!).

  8. Frank Elliott says:

    Looks to me like JP Morgan’s analyst has been listening to Tony Seba.

    https://www.youtube.com/watch?v=4hoB7HN4B0k

    For example: that 20 parts vs. 2,000 parts line? Straight from Seba.

    I started to write …”has been drinking Tony Seba’s kool-aid” except that that saying would imply that Seba’s peddling a bunch of bunk. However, I think most of what he says has merit.

    1. ffbj says:

      Yeah, that part thing is stupid. Though of course an ice does have many more moving parts. The other one I hate is “see the horse.”
      A really bad analogy because a car is so much better than a horse, for most uses.

      An ev is better than an ice, but not to the extent that a car is better than a horse, in the city. This was part of the basis for his theory of the rapid adoption of evs. It falls flat on it’s face, if you give it a little push.

  9. ffbj says:

    It will take a while, but with new choices in the 30k-40k 200+ range adoption will clearly increase. In essence it’s over, it’s just a matter of time.

    I think by 2025 almost everything new sold will be electrified with around 75% of those being bev.

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