As the economy slowly shifts to incorporate sustainable products and energy into their repertoire, perhaps one of the largest shifts comes in the automobile industry, which has seen a vast expansion within the hybrid and fully electric vehicle portions of their companies. In addition, some newer, smaller companies have made their name exclusively within this category. Considering these radical changes in the market, what is the future of electric vehicles within the automobile industry, and how will large automobile companies respond to this new phenomenon?
The Current State of Electric Vehicles
As it stands today, electric vehicles have made massive gains in the overall market of automobile sales within the past few years. That trend is expected to continue moving forward. In 2015, passenger electric vehicle sales clocked in at around 450,000 vehicles sold. These numbers shot all the way up to 2.1 million electric passenger vehicles sold in 2019, with a slight dip in 2020 at around 1.7 million electric passenger vehicles sold due partially to the COVID-19 pandemic. In a similar vein, the current market share of total new car sales for electric vehicles sits at 2.7%. These numbers come both as more electric vehicle options begin to flood the market, consumers grow more conscious as buyers, and lithium-ion batteries grow cheaper and more efficient. In fact, lithium-ion battery pack prices have dropped an impressive 87% from 2010-2019, while during that same period, the average battery density has increased by 4-5% every year.
Future Outlooks on Electric Vehicles
While the numbers on electric vehicles are already rather strong, the projections for where they will go in the future are exponential. After major car manufacturers pledged to invest a whopping $225 billion into developing new electric vehicles, this has led to a serious increase in the availability of electric vehicles on the market with projections of over 500 different models on the market by 2022. This will slowly translate into an estimated 54 million passenger electric vehicles sold in 2040. That number would equate to roughly 54% of total cars sold being electric. In turn, these projections have led to specific changes coming from a variety of car manufacturers both big and small to continue to succeed in the future.
Car Manufacturers’ Response
With companies such as Tesla making major gains in personal transport and Hyliion making significant moves regarding Class 8 trucks and other large scale tools of transportation, the automobile industry is set for a massive change. Companies like Rivian have raised $2.5 billion on the ambitious goal of rolling out the first fully electric luxury pickup truck.
Before the recent drop in the stock market, Tesla’s stock had risen to such incredible heights that their market cap reached $420 billion, which is equal to the next five car companies combined market cap. This comes off of historic rallies in the company partly due to their 37.57% increase in profits year-over-year in their most recent quarterly report. In a similar vein, after Hyliion merged with Tortoise Acquisition, shares of Tortoise shot up 41.2%, and an even more impressive 140% after the merger was announced months earlier. Hyliion as a company focuses on two major fronts that will shake up cross country shipping: retrofitting older Class 8 Trucks to be hybrids and creating fully electric Class 8 trucks that do not have battery packs but instead are constantly recharged through hydrogen fuel cells or natural gas power generators.
In response to the drastic shifts in the automobile industry, more traditional car manufacturers have also been swiftly reacting as well. Toyota, who is already a leader in hybrid vehicles, has made plans to have over half of their sales coming from electric vehicles by 2025, five years ahead of their previous projections. Volkswagen has also put in lofty plans to expand its electric vehicle field by investing more than 30 billion dollars into developing them by 2023, with hopes of them making up more than 40% of their global fleet by 2030.
Ford Europe announced plans to have an electric version of all its future nameplates in 2019, with a fully electric F-150 being their future centerpiece for the US market. General Motors has more modest plans, focusing on making Cadillac their flagship brand for electric vehicles with a planned electric Escalade-style SUV rolling out by 2030. However, GM’s more lofty intentions have been made known after their recent partnership announcement with electric and fuel cell vehicle startup, Nikola. This partnership has lifted both companies’ stock with Nikola’s jumping nearly 40% and GM’s up 6% as they work together to create the Badger, an electric pickup truck.
The automobile industry is set to change radically in the near future. While some companies dealing with near exclusively electric vehicles are on the forefront, some larger companies are not far behind. However, for those with less than ambitious goals in the coming years, they will certainly be left behind as the market for electric vehicles continues to grow with no stopping in sight.
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.