Electric Vehicles – a Virus That Can’t Be Controlled?

AutoInformed.com on Porsche Mission E - Taycan Concept

Tesla is about to have a lot of expensive and well-made competition.

In 2019, BEV sales made up around 2% of global car (and North American Light Truck) sales, according to consultancy LMC. By 2025, they project close to 8% global market share, and 15.5% in 2030. By 2030, LMC says nearly 50% of the global market will be electrified in some form.  (Pick your number at current rates that could be ~+45 million vehicles annually. Global Light Vehicle Sales Slump. The Party’s Over?) In North America, the alteration is slower, reaching 7% BEV sales and 20% hybrid sales in 2030.

The validity of these projections is being debated across the auto industry, an industry whose future is now more dependent than ever on government regulations or the whims of politicians in major markets. There are big profits and big losses at stake in what could be the greatest stockholder debacle since tulip bulb speculation. We could be on the verge of a mass extinction of some, (many?) automakers and suppliers.

“Big strides are being made in electrification technology, but in general it is still very young and there are significant differences in strategy between OEMs over its development and rollout,” says Kevin Riddell, Senior Manager, Americas Powertrain at LMC.

“Only a few years ago you would hear a lot about combustion-based technologies, such as variable compression, HCCI, higher pressure injectors and improved after-treatment. While these are still being developed and improved, the headlines have shifted to how electricity is added into the powertrain and how batteries are improving.”

Riddell in essence suggests this riddle: When buying an IC car today, a larger engine is a big cost option, and for a BEV, a bigger ‘gas tank’ is a major, high-cost feature. Will this continue? Can this continue? Based on past behaviors, cost is a major inhibitor to adaption of advance technologies.

BEVs suit the needs of ultimately an unknown number of people. The criticism are well known: limited of range, poor weather capability, lack of charging infrastructure, unknown durability, the supply of lithium and recyclability.

Riddle notes that batteries now cost less than one fifth of the price per kWh than 10 years ago but remain a significant part of a plug-in electric vehicle (PEVs) cost. As a result, PEVs are still largely reliant on government forced taxpayer subsidies to sell the cars and improve the infrastructure.

In Europe, China and other markets the government is clearly demanding electrified vehicle growth, while the US so far has comparatively curbed government interference.

However, U.S. government restrictions are in the process of being eased regarding CO2 regulation, for example, the recent, contested removal of California ZEV legislation is just the beginning of a longer battle over how to deal with climate change. A battle that might be determined by the half-life of the Trump reign.

What happens if or when U.S. subsidies end? All forecasts are thereby weakened, if not nullified.  What happens if ZEV legislation is reinstated or,  as AutoInformed thinks likely, California finds a different path to legislate increased carbon neutral vehicle sales?

Time and sales reports will tell, but this game is not for slow, weak, politically under-connected, or under-capitalized ventures.

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About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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