Is The EV Market Set To Topple The Traditional Automotive Industry?

In the last few years, the interest in electric vehicles (EV) has picked up with numerous established companies entering the arena with electrified options, while some are scaling up operations.

The field is buzzing so much that even companies not engaged in the automotive industry are making an entry, including electronic device makers Xiaomi and Huawei.

Ahead of this, long-time industry leader Tesla was challenged by Chinese automaker BYD for the top spot, with Tesla making moves to mark a comeback. On the flip side, some automakers are unsure about the market and have voiced their concerns.

However, the latest developments have led automakers and industry leaders to reassess their stance on the market.

So, what’s changed in the industry? Let’s explore!
 

What’s New With The EV Industry?

 

• One of the biggest concerns that consumers had about purchasing EVs was the cost of purchasing as well as the challenges with charging them.

• In comparison to internal combustion engine (ICE) vehicles, which can fuel up in a matter of minutes at any gas station, an EV takes much longer to charge up.

• This challenge was being addressed by the EU, US and a bunch of automakers, including BMW, GM, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis, who incorporated a joint venture to install easy-to-use DC fast chargers along US and Canadian highways and urban areas, powered by renewable energy. The goal was to start operations by summer 2024 and install 30,000 fast chargers by 2030.

• Additionally, in the last few months, scientists and researchers have been working on batteries that can charge faster and deliver longer travel times. This includes the breakthrough made by researchers at Cornell University, who created a lithium battery that can charge in under five minutes and perform well through repeated charging and discharging cycles.

• A few months ago, Toyota produced a battery that could run for 745 miles and charge in 10 minutes. However, as per the company, this launch of this battery could stretch up to 2027 to 2028.

• The world’s largest EV battery maker, CATL (Contemporary Amperex Technology Co., Limited), recently announced that it would reduce the cost per kWh of its lithium iron phosphate (LFP) battery cells by 50% by mid 2024.

• A report by the ICCT (International Council on Clean Transportation) found that “new lithium supply may far exceed lithium demand from new U.S. light-duty BEVs through 2032.” The ICCT even predicted that the US lithium supply could outpace demand 3 to 1, resulting in even lower prices.

 

What Does It Mean For The EV Industry?

 

• While companies like Tesla and Ford have been slashing the prices of their EVs and cutting back production of some models, it doesn’t mean the American EV market is regressing. 

• On the contrary, EV sales were up 40% in Q4 2023 as compared to Q4 2022, with the US hitting a new record for EV sales, reaching 1 million units for the first time.

• On the vehicle pricing front, BYD recently unveiled a $15,000 EV that many are dubbing the “Corolla Killer”, while other companies are also vying to produce cheaper options.

• These latest updates have led analysts and experts to believe that the lowering of EV prices could diminish demand for ICE (internal combustion engine) vehicles.

 

What Did Experts Say?

 

• James Carter, Principal Consultant at Vision Mobility, said, “EVs will soon be cheaper than ICE vehicles in the lower mainstream automotive market. Battery raw-material prices are a major factor in the overall cost of EVs, but the ICCT expects "substantial" battery and vehicle cost reductions regardless of the raw-material situation over the remainder of the decade. That will help cut EVs on the path to price parity with internal-combustion cars." 

• “For the last few years, EVs have been more expensive than their ICE equivalent, particularly below US$40,000. However, what is extremely important to note is that battery prices, particularly for LFP [lithium iron phosphate], will continue to fall.”

• “Why? Because key minerals needed for LFP battery production are cheap: Lithium, iron, aluminum, graphite and copper. None are rare, all are commodity items and easily sourced from ethical supply sources. Even the lithium is cheaper as it uses lithium carbonate, rather than lithium hydroxide.”

Do you think the EV industry could topple the internal combustion engine vehicles industry soon to become the norm?

Let us know in the comments below!