‘Is this an inflection point?’ asks Andrew Bergbaum, a managing director at AlixPartners. ‘I think the answer has to be yes.’

That was one of the comments in a recent article in the Financial Times (paywall) on the growth of EV sales, particularly in the UK and Europe. The tone of the article was one of astonishment; the author breathlessly noted the ‘extraordinary surge in demand’.

The really extraordinary thing is that the ‘inflection point’, at least in the UK, was actually over two years ago. It was then that the share of EVs (both pure battery and plug-in hybrid) began to accelerate sharply. But at the time none of us noticed.

Yes, we knew that EV sales were growing and would probably eventually command a majority share of sales. However, as usual, we failed to understand that exponential change happens ‘gradually, and then suddenly’.[1]

Here’s a chart that shows the percentage of all car sales held by electric vehicles in the UK. The graph doesn’t plot the numbers month by month but uses a twelve month rolling average. The data series that I compiled starts in October 2015, so the first twelve month period begins in September 2016.[2]

Source: SMMT

Between the beginning of the data series - when sales were running at around 1% share of all vehicles -to July 2019 sales increased at around 2% a month, or 27% a year. As a result, in July 2019 the share was around 2.6%.

The EV market share the jumped sharply in August 2019 and the acceleration continued. From then on, market share has typically increased by over 7% a month.[3] Over a year, this means that the share rises over 130% a year. We’re noticing that effect now, but the trend has actually been there to see for over two years.

Of course the monthly figures have swung around, reflecting new product introductions, shortages and changes in tax incentives. But the underlying rate of rolling twelve month increases has been surprisingly stable. Nevertheless, the Financial Times article characterised the developments as follows. ‘A slow burning shift in the way the world works suddenly starts to gather pace at a rapid rate’.

Hmm, I say, this shift has actually been burning like wildfire for 25 months. And if we’d plotted the data this time last year and extrapolated the growth to September 2021, we’d have come very close to the actual sales share held by EVs last month.

Humans don’t notice fast changes when the absolute amount of variation is small. A rise of from 1% to 2% market share is far less noticeable to us than an increase from 5% to 10%, although the value of spotting the signal is far greater for the smaller numbers.

This failure in our understanding is tending to impede many of our responses to changes that the energy transition will produce. So, for example, it is only in the last few months that most of the world’s car industry has finally realised that the market demand for the components of internal combustion engines will fall very sharply in the next few years. It would have been better for all of us, but particularly employees in related manufacturing businesses, if planning had started two years ago, not today.

Exponential growth really shouldn’t surprise us any more after what we have seen in solar PV, offshore wind, electrolyser and battery costs.

[1] A quote from Ernest Heminway’s The Sun Also Rises’.

[2] I have adjusted the data from two months at the very beginning of the pandemic. In these months the share of EVs was exceptionally high – at 34% in the month of April 2020 - and I interpolated the shares between March and June.

[3] This means that if the EV share of all personal vehicle sales is 10% one month, it is expected to be 10.7% in the following month.