We think this time is different. In a new discussion paper<\/a>, we argue that the economic case for electric vehicles is now improving on its own terms. This is because of what has happened to batteries, not because of the oil price. The same evidence, though, shows the transition creates new problems as serious as the ones it solves.<\/p>\n Battery costs have fallen 93% since 2010. That is the number that changes everything. A pack that cost more than US$1,000 per kilowatt-hour<\/a> in 2010 cost US$108 by late 2025<\/a>, driven down by a decade of learning, investment and policy support. <\/p>\n Research on the global battery industry<\/a> finds that every time cumulative production doubles, costs fall by around 9%. More buyers, more production, lower costs, more buyers. <\/p>\n Unlike the 1970s, this loop does not need an oil crisis to keep spinning. Electric cars have crossed lifetime cost parity with petrol vehicles<\/a> across much of Europe; in the used-car market they now have the lowest total cost of ownership<\/a>. Newer models even match petrol cars in estimated lifespan<\/a> \u2013 something early EVs could not claim.<\/p>\n Global sales surpassed 17 million in 2024<\/a>, one of the fastest technology diffusion processes in the history of transport. Norway is near-fully electrified<\/a>. And Ethiopia reached around 60% EV sales share in 2024<\/a>, powered by cheap hydroelectricity \u2013 some way ahead of the US, for instance, which sits at around 8%.<\/p>\n The deeper reason this wave will not fade is not technical \u2013 it is economic. An EV is a platform. Its value grows as the network around it grows, just as smartphones became indispensable not because of the hardware but because of everything connected to it. <\/p>\n Every charger built makes the next EV more attractive. Every software update raises the value of every car already on the road. Every recycled battery feeds back into the supply chain that makes the next one cheaper. It\u2019s part of the reason some other technologies like hydrogen fuel cell vehicles have struggled to get off the ground in numbers \u2013 the tech exists, but all the other elements aren\u2019t quite there.<\/p>\n One study of 8,000 drivers in Shanghai found that range anxiety<\/a> \u2013 the fear of running out of charge \u2013 has a real economic cost due to unnecessarily avoided trips. But that cost is falling sharply, not because batteries improved, but because charging networks expanded.<\/p>\n Making real-time charger availability visible<\/a> could add 6\u20138 percentage points to market share by 2030. And because EV charging is far more flexible than other household electricity demand, drivers can shift away from peak hours remarkably easily<\/a> when the price is right \u2013 turning the car into a grid asset, able to store and release electricity when needed. These are economic network effects, not engineering features.<\/p>\n Ending oil dependence does not end geopolitical exposure. It relocates it. <\/p>\n In late 2025, China introduced rules<\/a> requiring government approval for exports containing more than 0.1% rare earths. The leverage that once came from control of oil flows now comes from control of processing capacity and component supply chains. <\/p>\n The minerals at stake \u2013 lithium, cobalt, nickel, graphite and neodymium to name but a handful \u2013 carry their own geopolitical risks and, as we have written elsewhere<\/a>, serious human costs in the communities that mine them. This creates a predictable cycle of social contestation<\/a> that threatens to stall the transition unless the industry commits to responsible, sustainable innovation.<\/p>\n The metal cobalt traditionally helped EVs travel further on the same charge. And when prices spiked<\/a>, so did research into making batteries with less or even no cobalt. Today, more than half<\/a> of all EV batteries sold globally are cobalt free.<\/p>\n Four decades of patent data<\/a> show the same pattern: higher mineral prices consistently redirect research and development toward mineral-saving technologies. <\/p>\n Recovering lithium and cobalt from used batteries<\/a> is becoming economically viable too, shifting part of the supply chain away from geopolitically exposed extraction sites. In addition, Norway and other countries are looking to exploit new critical mineral resources<\/a> to diversify supplies.<\/p>\n The Hormuz crisis is a reminder of what concentrated energy dependence costs. The EV transition does not need it. The learning curve keeps falling, the platform keeps compounding, the economics keep improving. That is what makes this wave different.<\/p>\n What it does not do is eliminate geopolitical risk. Unlike oil, where leverage comes from energy flows, EV supply chains concentrate power at materials, processing capacity, and technological bottlenecks \u2013 supply chains that are highly concentrated and carry their own serious risks<\/a>. Fuel dependence becomes mineral dependence. That dependence is highly concentrated.<\/p>\n Traditional carmaking regions are already absorbing concentrated job losses<\/a>, and history shows such disruptions leave persistent scars even if the long-term aggregate effects are positive. Yet electric vehicle assembly is proving more labour-intensive<\/a> in western countries than expected \u2013 requiring more workers on the shopfloor, not fewer, at least in the ramp-up phase. Contrast this with China, where massive automation has led to the creation of \u201cdark factories\u201d<\/a> where there are so few humans, internal lighting isn\u2019t required. <\/p>\n The same regions facing losses could benefit. But the gains and losses do not fall on the same people. That is where the work remains.<\/p>\n Viet Nguyen-Tien receives funding from the ESRC through the Centre for Economic Performance (ES\/T014431\/1) and the Programme on Innovation and Diffusion (ES\/V009478\/1), and previously from the Faraday Institution through the ReLiB Project (grant numbers FIRG005 and FIRG006).<\/span><\/em><\/p>\nWhy this time is different<\/h2>\n
An economic platform, not just a better engine<\/h2>\n
Swapping one dependency for another<\/h2>\n
The transition is real \u2013 but not risk-free<\/h2>\n
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