Electric Vehicles
Updated: Jul 28
Electric vehicles are not new. In fact, they’ve been around for over a century, but what most people don’t know is that they were almost the norm.
In the early 1900s, just after the very first automobiles began appearing on public streets, electric vehicles accounted for approximately one third of American cars. They were clean, quiet, and easy to operate compared to their noisy, hand-cranked gasoline-powered counterparts. As America ushered in the roaring 20’s, however, their popularity began to wane thanks to the introduction the electric starter, the mass production of the affordable Ford Model T, and an expanding highway system that demanded a longer driving range than early batteries could provide. Gasoline also became much more accessible and, crucially, cheaper.
Technical Briefing
The most obvious difference between the two types of cars is propulsion, but the difference in complexity and efficiency of their respective powertrains is also rather stark. An Internal Combustion Engine (ICE)-powered vehicle burns liquid fuel in an engine with hundreds of moving parts, converting roughly a quarter of the chemical energy into motion. By contrast, an electric vehicle stores energy in a battery and feeds it to a motor that converts 85–90% of that electricity into motion. Fewer moving parts, fewer thermal losses, and (thanks to a century’s-worth of technological development), lower fuel cost per mile.
From a technical and practical standpoint, the EV sounds like a pretty good value proposition, but it does not mean electric propulsion will replace combustion engines everywhere overnight. For aviation, and heavy industrial cycles, for example, alternatives remain more practical, but for the global passenger vehicle market, the direction is no longer ambiguous.
Why Now?
A few things make the transition to electric passenger vehicles possible. The first, concerns battery technology, which is to say that batteries have become cheaper and more efficient. According to BloombergNEF, the average lithium-ion pack price has fallen 93% since 2010 to approximately $100/kWh. That puts EVs at or near total-cost-of-ownership parity with combustion vehicles in most large markets, and meaningfully below parity in China.
The second is infrastructure. If the proliferation of gasoline helped the combustion engine, the proliferation of electricity generation has certainly helped the EV. Roughly 250,000 charging ports are online in the United States alone, with more scheduled to come online in the coming year. Tesla alone is responsible for 22% of all public charging ports and 52% of all fast-charging ports, but the real innovation is the ability to charge the vehicle at home using residential electricity. While ICE vehicles benefit from a quick fill-up, EVs offer sufficient daily usability and convenient overnight charging when not in use.
Finally, adoption is accelerating. Global EV sales reached 20.7 million units in 2025, more than 25% of the new-car market, per the IEA. China crossed 50% EV penetration for the first time, with new energy vehicles hitting 55% of car sales. Europe rebounded to roughly 28% share after stricter EU CO2 standards took effect. More than 40 countries now have EV shares above 10%, up from four in 2019.
Impact on the Future Energy Stack
An often-overlooked characteristic of EVs is that they are not just cars. They are the largest distributed mobile battery fleet ever built. Not only does the global EV stock already displace roughly 1.2 million barrels of oil per day, but they can also function as external backup generators, which fundamentally alters their interaction with electricity infrastructure.
Since charging is reshaping load curves and EVs are increasingly engineered to discharge back to the grid, fleets become a flexible balancing resource for systems absorbing more intermittent renewables. EVs, batteries, and the power system are converging into a single market for cells, power electronics, and software-defined load management.
The Cleanliness Question
EVs are often marketed as zero-emission. They are not. At least, not entirely and that’s because building a battery is not only energy-intensive, but thanks to its supply chain, genuinely dirty. Whether its lithium extraction in South America, cobalt mining in the Democratic Republic of Congo or nickel mining and processing in Indonesia, side effects such as deforestation, water contamination and adverse health conditions for humans woking in these industries are real concerns. Even the refining portion of the supply chain is in conflict with the goals of the final product, since Chinese midstream refining still runs on a grid that is roughly 60% coal.
And yet, the lifecycle math still favors EVs in almost every grid.
While an EV emits more carbon than a comparable combustion vehicle off the line, it compensates for that within a few years, at which point, it pulls steadily ahead. The true inflection point will arrive as the grid meaningfully decarbonizes behind it. If the electricity that powers them can be generated using renewables (or otherwise “clean” energy), the impact drops precipitously. If a homeowner can combine a solar panel array with battery storage and an EV charger, they can charge their car cleanly and for free, (particularly if/when the up-front cost for the system is paid). Any excess electricity can be sold back to the grid.
But the true breakthrough will be when recycling (at scale) closes the loop. By the late 2020s, end-of-life batteries from the first major EV cohorts will arrive in meaningful volume, and the industry is scaling to absorb them. A number of companies run closed-loop processes that recover lithium, nickel, cobalt, and copper at rates above 95%. Recycled cathode metals carry a fraction of the embedded carbon and water footprint of virgin material and reduce dependence on the most problematic mines. The end state is a closed-loop battery economy in which most of the materials in tomorrow's pack came from yesterday's, which is undoubtedly both an environmental win and a new infrastructure category being built from scratch.
Real Risks Worth Acknowledging
The supply chain is the central commercial vulnerability. Chinese automakers supplied 60% of global EV sales in 2025, and China dominates upstream refining of lithium, cobalt, graphite, and nickel. As of today, they control more than 80% of midstream capacity in several cases. Tariffs and legislation content rules are attempting to onshore the stack, but the rebuild will take at least a decade and billions in investment. Permitting bottlenecks, grid interconnection queues, and uneven charging remain genuine friction, all while most legacy OEMs are still losing money on EVs.
Looking Ahead
As for where the market currently sits is a matter of perspective. It is safe to say we are past the early-adopter phase and are now, firmly, into the mass market phase in the leading geographies. While the rest of the world remains on a steep catch-up curve, the trajectory is no longer in serious dispute. What remains to be seen is the rate at which consumers will convert. For the firms building this out, this is a decade-long capital cycle running across mining, refining, cell manufacturing, recycling, vehicle assembly, power electronics, charging networks, software, and grid hardware. Cyclicality and policy reversals will create dispersion, but the companies that can defend a structural cost, technology, or distribution advantage through the next downturn are the ones who are going to determine the future of a sector that is very much here to stay.
Sources
Disclaimer: The content contained herein is provided for general informational and educational purposes and does not constitute investment advice or a recommendation, offer, or solicitation to buy or sell any securities. The content reflects the writer's views and analysis as of the time of writing and is provided for context only. It does not address every factor relevant to any particular investor's circumstances, and investors should evaluate their own facts and circumstances before making any investment decision. The writer and/or affiliated funds may hold positions in the securities discussed and may buy or sell such positions at any time without notice. Past performance is not indicative of future results.
