The Rise of Internal Compound Annual Growth for Electric Vehicles

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The planned investment levels should support a sevenfold increase in electric vehicle production from the roughly 7.8 million this past year to 60 million electric vehicles in the next five years. Another factor at play here is what will happen to internal combustion engines as it becomes clearer and clearer that electric vehicles may be the, you know, the path forward. So thank you for joining me on this big idea.

Welcome to the Big Ideas Monday Miniseries, brought to you by the For Your Innovation Podcast.

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To learn more, view Big Ideas 2023.

This week’s Big Ideas Monday Mini Episode focuses on Electric Vehicles.

Investors once questioned whether the future was electric. Demand for EVs has scaled despite a pause in cost declines caused by commodity price shocks. Now investors doubt whether or not the growth will be exponential.

The debate around electric vehicles has shifted from demand to supply. Based on Wright’s Law, ARK forecasts that EV prices will decline and sales will increase more than 7-fold, or 50% at an annual rate, from roughly 7.8 million in 2022 to 60 million units in 2027.

The biggest downside risks to our forecast are supply constraints that could continue to impact pricing and the speed at which traditional automakers transition to electric vehicles.

Sources: ARK Investment Management LLC, 2023. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.