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Sales estimates for electric vehicles suggest a breakthrough is at hand: According to some estimates, 20% of cars sold by 2025 will be electric. By 2030, that share could climb to 40%.
This year will be pivotal for several reasons.
First, the cost of batteries, the main driver behind electric car prices, is dropping quickly — 89% in the past 12 years. This is due to many factors, such as new technology, and large-scale and optimized production.
Second is the part governments play in the proliferation of EVs: Even if battery prices increase, governments will add pressure on carmakers to ramp up production by imposing harsher fleet emission standards, increasing carbon taxes and providing tax breaks and subsidies for EV buyers.
Finally, a growing number of countries plans to outright ban sales of ICE (internal combustion engine) vehicles, which will severely limit the market reach of manufacturers unwilling to make the transition.
In fact, many of these factors convinced big-brand car makers to go full-on electric. Case in point: Jaguar. The company announced its plan to start producing only electric cars starting in 2025. Other companies going down the same route include Bentley (by 2030), GM (2035), Volvo (2030), Ford (2026), Volkswagen (2026), Toyota (2040), Mercedes-Benz (2040) and Audi (2030-35).
More EVs on roads also means more vehicles on charging stations. And with more cars being made every day, the availability of charging infrastructure becomes a concern. Currently, the issue of running out of juice while driving an EV is tackled by upgrading battery pack technology and providing more charging hubs.
More charging stations fuel adoption of EVs
In the U.K., the number of fast-charging devices grew by 50% between January and September 2021. Slow-charging devices have also grown, by 66%, in the same period. The U.K.’s largest gas-station operator, Motor Fuel Group, plans to ramp up those numbers in 2022, and several other infrastructure providers have made similar vows. But it’s not just the U.K.
On average, the EU already offers at least five fast public chargers for every 100 kilometers (62 miles). While there are currently enough charging stations, their number should grow to accommodate the surge in EV production. According to the latest estimates, there should be 1.3 million public charging stations available in the EU by 2025 and 2.9 million by 2030. This should keep the number of EVs per charging station under 10, which is on par with a directive given by the EU-appointed commission.
The U.S. has similar lofty plans to grow its own charging infrastructure. Under the “Biden-Harris Electric Vehicle Charging Action Plan,” $7.5 billion will be spent on EV infrastructure proliferation and increasing the number of chargers from fewer than 46,000 to 500,000. Although this is an ambitious goal, it’s nowhere near enough. By some estimates, at least 1 million of charging stations will be required to properly support the growing number of EVs in the country.
Still, this acceleration in EV production isn’t without challenges, with disruptions in the supply chain being the most important one. Case in point: Volkswagen sold 16,742 ID.4 EVs in the U.S. last year, but the manufacturer laments this number could’ve been at least three times higher if not for production constraints in Europe. Furthermore, the company took more than 40,000 reservations for ID.4, so many buyers are still waiting for their electric car. This problem could be alleviated when Volkswagen opens a factory in Chattanooga, Tennessee.
As with any rapid change in any industry, there will be winners and losers — those who quickly accommodate to new market conditions and mastodons that are unable to keep the pace with the times.
Winners and losers across the world
One of the biggest winners is, of course, Tesla
TSLA,
The EV trailblazer is now valued at $1 trillion, and is on track to be bigger than General Motors
GM,
in five years if GM doesn’t accelerate sales. Two companies that have taken a big chunk of the EV cake in Europe are Kia and Hyundai. Those brands are a rather common sight on the road, especially in Eastern Europe. It comes as no surprise that we will see a continued domination in years to come.
What about the losers? Unsurprisingly, these are the very same names that promise a quick transition to EV-only: Mercedes-Benz, Ford
F,
and Renault. All three companies lost market share last year and are working hard to offset that trend.
While Mercedes and Ford have announced rapid electrification of their fleets, Renault is still largely oblivious — or simply in denial — of the global EV trend that’s well underway. Although it claimed that EVs will comprise 90% of its cars by 2030, this promise is given just for the European market, which constitutes mere 25% of Renault Group’s worldwide sales. Its other markets — the Middle East, Africa and South America — will be largely unaffected by the transition, with the majority of its offering being ICE vehicles.
So the gun has been fired and the race is on. With progress happening at an accelerated pace with each passing year, we won’t have to wait too long to see who the real winners are. My money is on Tesla. How about you? Let me know in the comment section below.
