It is always intriguing to see all types of brands which range from world automotive leaders to new start ups bidding on the transition of transportation in becoming sustainable. It is evident to say that the transition towards Electric Vehicles has hit full velocity. There are brands like Porsche, Nissan, Volkswagen, etc. struggling to capture market share where a new comer like Tesla is capturing the market share at a rapid rate. The future of auto industry is very clear and it is Electric!
Over the next dozen of years the market share of Electric vehicles and Hybrid electric vehicles is estimated to increase at a exponential rate. Compared to fully electric vehicle segment, Hybrid electric vehicles segment is estimated to increase rapidly. The cost per kWh of an electric vehicle has decreased to $1150-$175 from a whopping $700 in 2009. It has also expected by industry experts that the cost will decrease going further in the future. Battery costs account to more than 25% of the production cost for an electric vehicle. This means once the battery costs become lesser, the economic case for buying an Electric Vehicle rises.
“Over the next couple of years, there should be several models in that sub-$35,000 range, after tax credits are applied” - Shannon Baker, Manager, CR
The electric vehicle is often considered to have very limited players in it such as car manufacturers and electric scooter manufacturers. But in real, the scope is more than just cars. Imagine the amount of fuel expenses for a logistics company which uses trucks and pick ups. This is what we call the Billion dollar opportunity. It is said by statistics that heavy vehicles will gain more growth rate than other light vehicles.
Brands like Tesla and Volvo have already started to add Electric trucks to their product line. But why is it taking a lot of time in terms of years to manufacture electric vehicles and produce on huge scales? Why is the transition this slow? This has a lot to do with the manufacturing and supply challenges that traditional auto manufacturers face.
Especially producing the batteries require huge production plant with technology and resources. In the other hand brands like Tesla have the technology and resources but lack capital costs to increase production and delivery. Along with capital challenges and production challenges there is this specific environment which electric vehicles need to suit in. The convenience of having more charging stations and other new technologies to charge also plays a big role here. We can debate on this here and there but the truth is that, the transition is real!
References and sources:
https://www.iea.org/publications/reports/globalevoutlook2019/
https://www.consumerreports.org/hybrids-evs/electric-car-comes-of-age/
https://atelier.bnpparibas/en/smart-city/article/electric-vehicles-future-car-industry
https://www.digitaltrends.com/cars/mit-study-finds-ev-market-will-stall-in-the-2020s/
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