Texas battery rush: Oil state's power woes fuel energy storage boom


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Texas Battery Storage Investment Boom draws BlackRock, SK, and UBS, leveraging ERCOT price volatility, renewable energy growth, and utility-scale energy storage arbitrage to enhance grid reliability, resilience, and double-digit returns across high-demand nodes.

 

Key Points

Texas sees a rush into battery storage, using ERCOT price spreads to bolster grid reliability and earn about 20% returns.

✅ Investors exploit price volatility, peak-demand spreads.

✅ Utility-scale storage enhances ERCOT reliability.

✅ Top players: BlackRock, SK E&S, UBS; 700 MW deals.

 

BlackRock, Korea's SK, Switzerland's UBS and other companies are chasing an investment boom in battery storage plants in Texas, lured by the prospect of earning double-digit returns from the power grid problems plaguing the state, according to project owners, developers and suppliers.

Projects coming online are generating returns of around 20%, compared with single digit returns for solar and wind projects, according to Rhett Bennett, CEO of Black Mountain Energy Storage, one of the top developers in the state.

"Resolving grid issues with utility-scale energy storage is probably the hottest thing out there,” he said.

The rapid expansion of battery storage could help, through efforts like a virtual power plant initiative in Texas, prevent a repeat of the February 2021 ice storm and grid collapse which killed 246 people and left millions of Texans without power for days.

The battery rush also puts the Republican-controlled state at the forefront of President Joe Biden's push to expand renewable energy use.

Power prices in Texas can swing from highs of about $90 per megawatt hour (MWh) on a normal summer day to nearly $3,000 per MWh when demand surges on a day with less wind power, a dynamic tied to wind curtailment on the Texas grid according to a simulation by the federal government's U.S. Energy Information Administration.

That volatility, a product of demand and higher reliance on intermittent wind and solar energy, has fueled a rush to install battery plants, aided by falling battery costs, that store electricity when it is cheap and abundant and sell when supplies tighten and prices soar.

Texas last year accounted for 31% of new U.S. grid-scale energy storage, with much of it pairing storage with solar, according to energy research firm Wood Mackenzie, second only to California which has had a state mandate for battery development for a decade.

And Texas is expected to account for nearly a quarter of the U.S. grid-scale storage market over the next five years, a trajectory consistent with record U.S. solar-plus-storage growth noted by analysts, according to Wood Mackenzie projections shared with Reuters.

Developers and energy traders said locations offering the highest returns -- in strapped areas of the grid -- will become increasingly scarce as more storage comes online and, as diversifying resources for better projects suggests, electricity prices stabilize.

Texas lawmakers this week voted to provide new subsidies for natural gas power plants in a bid to shore up reliability. But the legislation also contains provisions that industry groups said could encourage investment in battery storage by supporting 'unlayering' peak demand approaches.

Amid the battery rush, BlackRock acquired developer Jupiter Power from private equity firm EnCap Investments late last year. Korea's SK E&S acquired Key Capture Energy from Vision Ridge Partners in 2021 and UBS bought five Texas projects from Black Mountain last year for a combined 700 megawatts (MW) of energy storage. None of the sales' prices were disclosed.

SK E&S said its acquisition of Key Capture was part of a strategy to invest in U.S. grid resiliency.

"SK E&S views energy storage solutions in Texas and across the U.S. as a core technology that supports a new energy infrastructure system to ensure American homes and businesses have affordable power," the company said in a statement.

 

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Space-based solar power, once for science fiction, is gaining interest.

Space-Based Solar Power enables wireless energy transfer from orbital solar arrays, using microwave beaming to rectennas on Earth, delivering clean baseload power beyond weather and night limits, as demonstrated by Caltech and NASA.

 

Key Points

Space-based solar power beams microwaves from arrays to rectennas, delivering clean electricity beyond weather and night.

✅ Caltech demo proved wireless power transfer in space.

✅ Microwaves beam to rectennas for grid-scale clean energy.

✅ Operates above clouds, enabling continuous baseload supply.

 

Ali Hajimiri thinks there’s a better way to power the planet — one that’s not getting the attention it deserves. The Caltech professor of electrical engineering envisages thousands of solar panels floating in space, unobstructed by clouds and unhindered by day-night cycles, effectively generating electricity from the night sky for continuous delivery, wirelessly transmitting massive amounts of energy to receivers on Earth.

This year, that vision moved closer to reality when Mr. Hajimiri, together with a team of Caltech researchers, proved that wireless power transfer in space was possible: Solar panels they had attached to a Caltech prototype in space successfully converted electricity into microwaves and beamed those microwaves to receivers, as a demonstration of beaming power from space to devices about a foot away, lighting up two LEDs.

The prototype also beamed a tiny but detectable amount of energy to a receiver on top of their lab’s building in Pasadena, Calif. The demonstration marks a first step in the wireless transfer of usable power from space to Earth, and advances in low-cost solar batteries could help store and smooth that power flow — a power source that Mr. Hajimiri believes will be safer than direct sun rays. “The beam intensity is to be kept less than solar intensity on earth,” he said.

Finding alternative energy sources is one of the topics that will be discussed by leaders in business, science and public policy, including wave energy, during The New York Times Climate Forward event on Thursday. The Caltech demonstration was a significant moment in the quest to realize space-based solar power, amid policy moves such as a proposed tenfold increase in U.S. solar that would remake the U.S. electricity system — a clean energy technology that has long been overshadowed by other long-shot clean energy ideas, such as nuclear fusion and low-cost clean hydrogen.

If space-based solar can be made to work on a commercial scale, said Nikolai Joseph, a NASA Goddard Space Flight Center senior technology analyst, and integrate with peer-to-peer energy sharing networks, such stations could contribute as much as 10 percent of global power by 2050.

The idea of space-based solar energy has been around since at least 1941, when the science-fiction writer Isaac Asimov set one of his short stories, “Reason,” on a solar station that beamed energy by microwaves to Earth and other planets.

In the 1970s, when a fivefold increase in oil prices sparked interest in alternative energy, NASA and the Department of Energy conducted the first significant study on the topic. In 1995, under the direction of the physicist John C. Mankins, NASA took another look and concluded that investments in space-launch technology were needed to lower the cost and move closer to cheap abundant electricity before space-based solar power could be realized.

“There was never any doubt about it being technically feasible,” said Mr. Mankins, now president of Artemis Innovation Management Solutions, a technology consulting group. “The cost was too prohibitive.”

 

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Green energy in 2023: Clean grids, Alberta, batteries areas to watch

Canada 2023 Clean Energy Outlook highlights decarbonization, renewables, a net-zero grid by 2035, hydrogen, energy storage, EV mandates, carbon pricing, and critical minerals, aligning with IRA incentives and provincial policies to accelerate the transition.

 

Key Points

A concise overview of Canada's 2023 path to net-zero: renewables, clean grids, storage, EVs, and hydrogen.

✅ Net-zero electricity regulations target 2035

✅ Alberta leads PPAs and renewables via deregulated markets

✅ Tax credits boost storage, hydrogen, EVs, and critical minerals

 

The year 2022 may go down as the most successful one yet for climate action. It was marked by monumental shifts in energy policy from governments, two COP meetings and heightened awareness of the private sector's duty to act.

In the U.S., the Inflation Reduction Act (IRA) was the largest federal legislation to tackle climate change, injecting $369 billion of tax credits and incentives for clean energy, Biden's EV agenda and carbon capture, energy storage, energy efficiency and research.

The European Union accelerated its green policies to transition away from fossil fuels and overhauled its carbon market. China and India made strides on clean energy and strengthened climate policies. The International Energy Agency made its largest revision yet as renewables continued to proliferate.

The U.S. ratified the Kigali Amendment, one of the strongest global climate policies to date.

Canada was no different. The 2022 Fall Economic Statement was announced to respond to the IRA, offering an investment tax credit for renewables, clean technology and green hydrogen alongside the Canada Growth Fund. The federal government also proposed a 2035 deadline for clean electrical grids and a federal zero-emissions vehicle (ZEV) sales mandate for light-duty vehicles.

With the momentum set, more action is promised in 2023: Canadian governments are expected to unveil firmer details for the decarbonization of electricity grids to meet 2035 deadlines; Alberta is poised to be an unlikely leader in clean energy.

Greater attention will be put on energy storage and critical minerals. Even an expected economic downturn is unlikely to stop the ball that is rolling.

Shane Doig, the head of energy and natural resources at KPMG in Canada, said events in 2022 demonstrated the complexity of the energy transformation and opened “a more balanced conversation around how Canada can transition to a lower carbon footprint, whilst balancing the need for affordable, readily available electricity.”


Expect further developments on clean electricity
2023 shapes up as a crucial year for Canada’s clean electricity grid.

The federal government announced it will pursue a net-zero electricity grid by 2035 under the Clean Electricity Regulations (CER) framework.

It requires mass renewable and clean energy adoption, phasing out fossil fuel electricity generation, rapid electrification and upgrading transmission and storage while accommodating growth in electricity demand.

The first regulations for consultation are expected early in 2023. The plans will lay out pollution regulations and costs for generating assets to accelerate clean energy adoption, according to Evan Pivnick, the clean energy program manager of Clean Energy Canada.

The Independent Energy System Operator of Ontario (IESO) recently published a three-part report suggesting a net-zero conversion for Ontario could cost $400 billion over 25 years, even as the province weighs an electricity market reshuffle to keep up with increasing electricity demand.

Power Utility released research by The Atmospheric Fund that suggests Ontario could reach a net-zero grid by 2035 across various scenarios, despite ongoing debates about Ontario's hydro plan and rate design.

Dale Beguin, executive vice president at the Canadian Climate Institute, said in 2023 he hopes to see more provincial regulators and governments send “strong signals to the utilities” that a pathway to net-zero is realistic.

He recounted increasing talk from investors in facilities such as automotive plants and steel mills who want clean electricity guarantees before making investments. “Clean energy is a comparative advantage,” he said, which puts the imperative on organizations like the IESO to lay out plans for bigger, cleaner and flexible grids.

Beguin and Pivnick said they are watching British Columbia closely because of a government mandate letter setting a climate-aligned energy framework and a new mandate for the British Columbia Utilities Commission. Pivnick said there may be lessons to be drawn for other jurisdictions.

 

Alberta’s unlikely rise as a clean energy leader
Though Alberta sits at the heart of Canada’s oil and gas industry and at the core of political resistance to climate policy, it has emerged as a front runner in renewables adoption.

Billion of dollars for wind and solar projects have flowed into Alberta, as the province charts a path to clean electricity with large-scale projects.

Pivnick said an “underappreciated story” is how Alberta leaned into renewables through its “unique market.” Alberta leads in renewables and power purchase agreements because of its deregulated electricity market.

Unlike most provinces, Alberta enables companies to go directly to solar and wind developers to strike deals, a model reinforced under Kenney's electricity policies in recent years, rather than through utilities. It incentivizes private investment, lowers costs and helps meet increasing demand, which Nagwan Al-Guneid, the director of the Business Renewables Centre - Canada at the Pembina Institute, said is “is the No. 1 reason we see this boom in renewables in Alberta.”

Beguin noted Alberta’s innovative ‘reverse auctions,’ where the province sets a competitive bidding process to provide electricity. It ended up making electricity “way cheaper” due to the economic competitiveness of renewables, while Alberta profited and added clean energy to its grid.

In 2019, the Business Renewables Centre-Canada established a target of 2 GW of renewable energy deals by 2025. The target was exceeded in 2022, which led to a revised goal for 10 GW of renewables by 2030.

Al-Guneid wants to see other jurisdictions help more companies buy renewables. She does not universally prescribe deregulation, however, as other mechanisms such as sleeving exist.

Alberta will update its industrial carbon pricing in 2023, requiring large emitters to pay $65 per tonne of carbon dioxide. The fee climbs $15 per tonne each year until it reaches $175 per tonne in 2030. Al-Guneid said as the tax increases, demand for renewable energy certificates will also increase in Alberta.

Pivnick noted Alberta will have an election in 2023, which could have ramifications for energy policy.

 

Batteries and EV leadership
Manufacturing clean energy equipment, batteries and storage requires enormous quantities of minerals. With the 2022 Fall Economic Statement and the Critical Minerals Strategy, Canada is taking important steps to lead on this front.

Pivnick pointed to battery supply chain investments in Ontario and Quebec as part of Canada’s shift from “a fuel-based (economy) to a materials-based economy” to provide materials necessary for wind turbines and solar panels. The Strategy showed an understanding Canada has a major role to meet its allies’ needs for critical minerals, whether it’s the resources or supply chains.

There is also an opportunity for Canada to forge ahead on energy storage. The Fall Economic Statement proposes a 30 per cent tax credit for investments into energy storage. Pivnick suggested Canada invest further into research and development to explore innovations like green hydrogen and pump storage.

Doig believes Canada is “well poised” for batteries, both in terms of the technology and sustainable mining of minerals like cobalt, lithium and copper. He is bullish for Canada’s electrification based on its clean energy use and increased spending on renewables and energy storage.

He said the federal ZEV mandate will drive increased demand for the power, utilities, and oil and gas industries to respond.

The majority of gas stations, which are owned by the nation’s energy industry, will need to be converted into EV charging stations.

 

Offsetting a recession 
One challenge will be a poor economic forecast in the near term. A short "technical recession" is expected in 2023.

Inflation remains stubbornly high, which has forced the Bank of Canada to hike interest rates. The conditions will not leave any industry unscathed, but Doig said Canada's decarbonization is unlikely to be halted.

“Whilst a recession would slow things down, the concern around energy security definitely helps offset that concern,” he said.

Amid rising trade frictions and tariff threats, energy security is top of mind for governments and private organizations, accelerating the shift to renewables.

Doig said there is a general feeling a recession would be short-lived, meaning it would be unlikely to impact long-term projects in hydrogen, liquified natural gas, carbon capture and wind and solar.

 

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These companies are using oceans and rivers to generate electricity

Tidal Energy harnesses ocean currents with tidal turbines to deliver predictable, renewable power. From Scotland's Orkney to New York's East River, clean baseload electricity complements wind and solar in decarbonizing grids.

 

Key Points

Tidal energy uses underwater turbines to capture predictable ocean currents, delivering reliable, low-carbon power.

✅ Predictable 2-way flows enable forecastable baseload

✅ Higher energy density than wind, slower flow speeds

✅ Costs remain high; scaling and deployment are challenging

 

As the world looks to curb climate change and reduce fossil fuel emissions, some companies are focusing on a relatively untapped but vast and abundant source of energy — tidal waves.

On opposite sides of the Atlantic, two firms are working to harness ocean currents in different ways to try to generate reliable clean energy.

Off the coast of Scotland, Orbital Marine Power operates what it says is the "most powerful tidal turbine in the world." The turbine is approximately the size of a passenger airplane and even looks similar, with its central platform floating on the water and two wings extending downwards on either side. At the ends of each wing, about 60 feet below the surface, are large rotors whose movement is dictated by the waves.

"The energy itself of tidal streams is familiar to people, it's kinetic energy, so it's not too dissimilar to something like wind," Andrew Scott, Orbital's CEO, told CNN Business. "The bits of technology that generate power look not too different to a wind turbine."

But there are some key differences to wind energy, primarily that waves are far more predictable than winds. The ebb and flow of tides rarely differs significantly and can be timed far more precisely.

Orbital Marine Power's floating turbines off the Scottish coast produce enough energy to power 2,000 homes a year, while another Scottish tidal project recently produced enough for nearly 4,000 homes.

Orbital Marine Power's floating turbines off the Scottish coast produce enough energy to power 2,000 homes a year.

"You can predict those motions years and decades [in] advance," Scott said. "But also from a direction perspective, they only really come from two directions and they're almost 180 degrees," he added, unlike wind turbines that must account for wind from several different directions at once.

Tidal waves are also capable of generating more energy than wind, Scott says.

"Seawater is 800 times the density of wind," he said. "So the flow speeds are far slower, but they generate far more energy."

The Orbital turbine, which is connected to the electricity grid in Scotland's Orkney, can produce up to two megawatts — enough to power 2,000 homes a year — according to the company.

Scott acknowledges that the technology isn't fully mainstream yet and some challenges remain including the high cost of the technology, but the reliability and potential of tidal energy could make it a useful tool in the fight against climate change, as projects like Sustainable Marine in Nova Scotia begin delivering power to the grid.

"It is becoming increasingly apparent that ... climate change is not going to be solved with one silver bullet," he said.


'Could be 24/7 power'
Around 3,000 miles away from Orbital's turbines, Verdant Power is using similar technology to generate power near Roosevelt Island in New York City's East River. Although not on the market yet, Verdant's turbines set up as part of a pilot project help supply electricity to New York's grid. But rather than float near the surface, they're mounted on a frame that's lowered to the bottom of the river.

"The best way to envision what Verdant Power's technology is, is to think of wind turbines underwater," the company's founder, Trey Taylor, told CNN Business. And river currents tend to provide the same advantages for energy generation as ocean currents, he explained (though the East River is also connected to the Atlantic).

"What's nice about our rivers and systems is that could be 24/7 power," he said, even as U.S. offshore wind aims to compete with gas. "Not to ding wind or solar, but the wind doesn't always blow and the sun doesn't always shine. But river currents, depending on the river, could be 24/7."

Verdant Power helps supply electricity to New York City
Over the course of eight months, Verdant has generated enough electricity to power roughly 60 homes — though Taylor says a full-fledged power plant built on its technology could generate enough for 6,000 homes. And by his estimate, the global capacity for tidal energy is enormous, with regions like the Bay of Fundy pursuing new attempts around Nova Scotia.


A costly technology
The biggest obstacle to reaching that goal at the moment is how expensive it is to set up and scale up tidal power systems.

"Generating electricity from ocean waves is not the challenge, the challenge is doing it in a cost-effective way that people are willing to pay for that competes with ... other sources of energy," said Jesse Roberts, Environmental Analysis Lead at the US government-affiliated Sandia National Laboratories. "The added cost of going out into the ocean and deploying in the ocean... that's very expensive to do," he added. According to 2019 figures from the US Department of Energy, the average commercial tidal energy project costs as much as $280 per megawatt hour. Wind energy, by comparison, currently costs roughly $20 per megawatt hour and is "one of the lowest-priced energy sources available today," with major additions like the UK's biggest offshore wind farm starting to supply the grid, according to the agency.

When operational, the Orbital turbine's wing blades drop below the surface of the water and generate power from ocean currents.

When operational, the Orbital turbine's wing blades drop below the surface of the water and generate power from ocean currents.

Roberts estimates that tidal energy is two or three decades behind wind energy in terms of adoption and scale.

The costs and challenges of operating underwater are something both Scott and Taylor acknowledge.
"Solar and wind are above ground. It's easy to work with stuff that you can see," Taylor said. "We're underwater, and it's probably easier to get a rocket to the moon than to get these to work underwater."
But the goal of tidal power is not so much to compete with those two energy sources as it is to grow the overall pie, alongside innovations such as gravity power that can help decarbonize grids.

"The low hanging fruit of solar and wind were quite obvious," Scott said. "But do they have to be the only solution? Is there room for other solutions? I think when the energy source is there, and you can develop technologies that can harness it, then absolutely."
 

 

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Use of electric vehicles associated with fewer asthma-related ER visits on a local level, study shows

Electric Vehicle Adoption Benefits include reduced air pollution, lower greenhouse gas emissions, and improved respiratory health, as regional studies show, with equity considerations for low-income communities and policy mandates accelerating zero-emission vehicles.

 

Key Points

The environmental and health gains from wider EV uptake, including cleaner air, lower emissions, and fewer asthma cases.

✅ Regional EV growth linked to lower NO2 and PM2.5 levels

✅ Fewer asthma ER visits in higher EV-adoption areas

✅ Address adoption gap to ensure equity in low-income communities

 

In an effort to mitigate the effects of climate change, countries across the globe are involving electric vehicles in their plans to reduce greenhouse gas emissions, citing the EV climate and cost benefits highlighted by recent analyses.

A federal mandate in Canada, for instance, aims to ensure that one-fifth of all passenger cars, SUVs and trucks sold in Canada are electrically-powered by 2026, with Ottawa set to release EV sales regulations to guide industry. By 2035, if this mandate is carried out, every passenger vehicle sold in Canada will need to be electric, though some critics deem the 2035 target unrealistic based on current conditions.

But what will this shift to electric vehicles actually do for the environment, especially given that 18% of Canada's 2019 electricity came from fossil fuels which affects lifecycle emissions?

One team of researchers with the Keck School of Medicine of USC aimed to find out, conducting what it describes as one of the first studies to analyze the environmental and health impacts of electric vehicles on a regional scale. Their research linked the wider integration of zero-emission vehicles with lower levels of local air pollution and some respiratory problems, a pattern consistent with analyses showing EVs are greener across all 50 states in the U.S.

“When we think about the actions related to climate change, often it’s on a global level,” Erika Garcia, an assistant professor of population and public health at the Keck School of Medicine, said in a press release.

“But the idea that changes being made at the local level can improve the health of your own community could be a powerful message to the public and to policy makers.”

Using data that spanned from 2013 to 2019, Garcia and the team of researchers compared the registration of zero-emissions vehicles with air pollution levels and asthma-related emergency room visits in California. They found that in regions where more electric vehicles were adopted, emergency room visits dropped, along with with pollution levels.

Sandrah Eckel, an associate professor of population and public health sciences and the study’s senior author, said their findings offer hope among a reality of climate anxieties.

“We’re excited about shifting the conversation towards climate change mitigation and adaptation, and these results suggest that transitioning to [electric vehicles] is a key piece of that.”

Garcia added that the study also evaluated disadvantages faced by those living in lower-income communities, which often see higher pollution levels and related respiratory problems, underscoring that EVs are not a silver bullet in broader climate and health policy.

Researchers discovered that adoption of zero-emissions vehicles in low-resource neighbourhoods was slower compared to more affluent areas, amid ongoing debate over whether EV purchase subsidies are an effective tool for Canada.

The study attributes this disparity to what the researchers call an “adoption gap” – referring to groups of people that cannot afford newer vehicles that are electrically-powered.


According to the study, which was published in the journal Science of the Total Environment, the adoption gap “threatens the equitable distribution of possible co-benefits.”

“Should continuing research support our findings, we want to make sure that those communities that are overburdened with traffic-related air pollution are truly benefiting from this climate mitigation effort,” Garcia said in the release.

 

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BC Hydro electric vehicle fast charging site operational in Lillooet

BC Hydro Lillooet EV fast charging launches a pull-through, DC fast charger hub for electric trucks, trailers, and cars, delivering 50-kW clean hydroelectric power, range-topups, and network expansion across B.C. with reliable public charging.

 

Key Points

A dual 50-kW pull-through DC fast charging site in Lillooet supporting EV charging for larger trucks and trailers.

✅ Dual 50-kW units add ~50 km range in 10 minutes

✅ Pull-through bays fit trucks, trailers, and long-wheelbase EVs

✅ Part of BC Hydro network expansion across B.C.

 

A new BC Hydro electric vehicle fast charging site is now operational in Lillooet with a design that accommodates larger electric trucks and trailers.

'We are working to make it easier for drivers in B.C. to go electric and take advantage of B.C.'s clean, reliable hydroelectricity,' says Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation. 'Lillooet is a critical junction in BC Hydro's Electric Highway fast charging network and the unique design of this dual station will allow for efficient charging of larger vehicles.'

The Lillooet station opened in early March. It is in the parking lot at Old Mill Plaza at 155 Main Street and includes two 50-kilowatt charging units. Each unit can add 50 kilometres of driving to an average electric vehicle with BC Hydro's faster charging initiatives continuing to improve speeds, in about 10 minutes. The station is one of three in the province that can accommodate large trucks and trailers because of it's 'pull-through' design. The other two are in Powell River and Fraser Lake.

'As the primary fuel supplier for electric vehicles, we are building out more charging stations to ensure we can accommodate the volume and variety of electric vehicles that will be on B.C. roads in the coming years,' says Chris O'Riley, President and CEO of BC Hydro. 'BC Hydro will add 325 charging units to its network at 145 sites, and is piloting vehicle-to-grid technology to support grid flexibility within the next five years.'

Transportation accounts for about 40 per cent of greenhouse gas emissions in B.C. In September, BC Hydro revealed its Electrification Plan, with initiatives to encourage B.C. residents, businesses and industries to switch to hydroelectricity from fossil fuels to help reduce carbon emissions, alongside investments in clean hydrogen development to further decarbonize. The plan encourages switching from gas-powered cars to electric vehicles and is supported by provincial EV charger rebates for homes and workplaces.

BC Hydro's provincewide fast charging network currently includes, as part of B.C.'s expanding EV leadership across the province, 110 fast charging units at 76 sites in communities throughout B.C. The chargers are funded in a partnership with the Province of B.C. and Natural Resources Canada.

 

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US Crosses the Electric-Car Tipping Point for Mass Adoption

EV Tipping Point signals the S-curve shift to mainstream adoption as new car sales pass 5%, with the US joining Europe and China; charging infrastructure, costs, and supply align to accelerate electric car market penetration.

 

Key Points

The EV tipping point is when fully electric cars reach about 5% of new sales, triggering rapid S-curve adoption.

✅ 5% of new car sales marks start of mass adoption

✅ Follows S-curve seen in phones, LEDs, internet

✅ Barriers ease: charging, cost declines, model availability

 

Many people of a certain age can recall the first time they held a smartphone. The devices were weird and expensive and novel enough to draw a crowd at parties. Then, less than a decade later, it became unusual not to own one.

That same society-altering shift is happening now with electric vehicles, according to a Bloomberg analysis of adoption rates around the world. The US is the latest country to pass what’s become a critical EV tipping point: an EV inflection point when 5% of new car sales are powered only by electricity. This threshold signals the start of mass EV adoption, the period when technological preferences rapidly flip, according to the analysis.

For the past six months, the US joined Europe and China — collectively the three largest car markets — in moving beyond the 5% tipping point, as recent U.S. EV sales indicate. If the US follows the trend established by 18 countries that came before it, a quarter of new car sales could be electric by the end of 2025. That would be a year or two ahead of most major forecasts.

How Fast Is the Switch to Electric Cars?
19 countries have reached the 5% tipping point, and an earlier-than-expected shift is underway—then everything changes

Why is 5% so important? 
Most successful new technologies — electricity, televisions, mobile phones, the internet, even LED lightbulbs — follow an S-shaped adoption curve, with EVs going from zero to 2 million in five years according to market data. Sales move at a crawl in the early-adopter phase, then surprisingly quickly once things go mainstream. (The top of the S curve represents the last holdouts who refuse to give up their old flip phones.)

Electric cars inline tout
In the case of electric vehicles, 5% seems to be the point when early adopters are overtaken by mainstream demand. Before then, sales tend to be slow and unpredictable, and still behind gas cars in most markets. Afterward, rapidly accelerating demand ensues.

It makes sense that countries around the world would follow similar patterns of EV adoption. Most impediments are universal: there aren’t enough public chargers, grid capacity concerns linger, the cars are expensive and in limited supply, buyers don’t know much about them. Once the road has been paved for the first 5%, the masses soon follow.

Thus the adoption curve followed by South Korea starting in 2021 ends up looking a lot like the one taken by China in 2018, which is similar to Norway after its first 5% quarter in 2013. The next major car markets approaching the tipping point this year include Canada, Australia, and Spain, suggesting that within a decade many drivers could be in EVs worldwide. 

 

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