Increasing environmental concerns, more stringent regulation on CO2 emissions, governmental subsidies and substantial investments of car manufacturers represent the major elements which have influenced the rise of electric cars.
The overall decline in sales of the auto industry during COVID-19 is clearly associated with the measures and lockdowns which limited people’s movement. Despite this negative evolution, the sales of electric vehicles reached all-time highs in 2020. The pandemic has induced fear of public transport due to the possibility of disease transmission. Hence, people were inclined to look into alternatives for public transport, one which of them being the choice of electrical vehicles. The range of electric cars widened these past years: the increased variety fits different needs of distinct population sectors in terms of size, price, style, range, charging et cetera. In 2019, the electric vehicle market was estimated at $162 billion, and it is projected to reach $802 billion by 2027.
In 2021, several companies will launch their very first electric vehicles. In January, Volvo will launch the XC40 Recharge, which will pave a new path for a whole range of adapted electric cars, rather than new designs which are planned around batteries and electric motors. Mazda is set to sell its first electric cars in February which will start at a competitive price point of 25,545£. Moreover, companies outside the auto industry have shown interest in starting to invest and produce in the field. For example, some indicate that Apple could work with Hyundai to produce its first prototype.
Furthermore, major reductions of battery prices would enable the automakers to commercialise fully electric cars for a lower price than cars fueled by diesel and gasoline starting with 2022.
Newcomers in the field of electric vehicles are inspired by Tesla’s success and its major increases in its share prices, now being the biggest global carmaker. Only in 2020, Tesla’s shares brought to its’ investors roughly 594% profit. NIO, a strong competitor of Tesla in the industry, had a massive surge in its sales from 3.24$ in January 2020 to a record of 50$ this month.
Some investors are reticent because the cost of manufacturing electric vehicles is higher than constructing other vehicles. Nevertheless, the government encourage the mass production of electric vehicles through providing subsidies: these past few years, China heavily invested in this industry. Europe’s regulations that impose a reduction of CO2 emissions represent a major driving force in the field. Norway became the first country in the world where the sale of electric was bigger than those powered by petrol, diesel and hybrid engines. Among other incentives, smaller road taxes and the elimination of toll roads and public ferries charges have accelerated the shift towards electric-based alternatives.
One of the greatest challenge faced by carmakers is the correct implementation of integrated software in the vehicles. The experience offered by Tesla is unique in the auto industry, being similar to the experience offered by smartphones, as it provides upgrades through the constant software actualisations. Aiming to catch up with Tesla’s vehicles, competing models struggle to provide similar range distances (= how far an electric car can go before being recharged.
Another problematic aspect is the charging infrastructure. Individuals complain that charging stations are scattered unevenly and accessing them is sometimes very difficult. One study revealed that this complaint represents the third biggest factors which restrain people from buying electric vehicles, right after the high price and driving range.
Overall, the future seems bright for the electric auto industry. Elon Musk declared that
“Self-driving cars are the natural extension of active safety and obviously something we should do. I’ve actually made a prediction that within 30 years a majority of new cars made in the United States will be electric. And I don’t mean hybrid, I mean fully electric.”
carmakers are being prodded to move more.
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