The demand for electric vehicles is increasing rapidly, owing to their environment-friendly benefits, growing awareness about environmental safety, and rising disposable income. Moreover, governments of various nations have introduced stringent laws to curb pollution. As a result, companies have started increasing the production and electric vehicle and slowly reducing the manufacturing of gasoline-powered vehicles. The oil prices are increasing on a regular basis. It is another key factor fueling another revolution. Even with reduced oil costs, electric vehicles have a promising future.
Electric vehicle sales are being propelled forward, and various companies are focusing on going all-electric. Toyota recently declared its plan to invest US$ 35 billion in battery production. The company is intending to introduce around 30 EV models by 2030. Thus, the future of electric vehicles is legit bright due to several factors.
Growing Concerns over Increasing Pollution
Electric vehicle owners are contributing to the reduction of hazardous air pollution caused by exhaust emissions. A zero-emission electric vehicle (EV) emits no exhaust. Statista estimates that in 2020, passenger cars emitted around three billion metric tonnes of carbon dioxide globally. Over the last two decades, passenger car emissions have continuously increased, growing from 2.2 billion metric tonnes in 2000 to 3.2 million metric tonnes in 2010.
Thus, companies are also focusing on promoting the adoption the electric vehicle. VinFast, Vietnam’s EV maker, recently made headlines. The company is planning to go all-electric. Moreover, it will also build electric vehicle battery cells in its U.S. manufacturing complex.
Moreover, the JSW group also made headlines in the past, as the company announced an employee-friendly electric vehicle policy to begin in 2022. The company is forecast to provide around ₹ 3 lakh incentives to its employees for the purchase of electric vehicles beginning from January 1, 2022.
Health
Air pollution causes many health problems. Electric vehicles are also quieter than gasoline and diesel automobiles. Thus, it reduces noise and air pollution. Due to the potential scope of electric vehicles, automotive manufacturing companies have significantly increased manufacturing activities.
IONITY already boasts Europe’s largest network of high-performance charging stations, which the majority of electric vehicles can use. The joint venture is currently accelerating its expansion plans. The number of charging stations is predicted to increase from 400 to over 1,000 by 2025. Around 7,000 charging points will be available, more than four times the current 1,500.
Popularity
Electric vehicles are becoming increasingly popular. With increasing popularity, a plethora of new versions of cars is regularly being introduced to the market.
China has quickly risen to become the world’s largest market for electric vehicles. The Chinese government announced the New Energy Vehicle (NEV) mandate in 2018. The government would outlaw cars with internal combustion engines (ICS) for a long time. In addition, the Indian government is providing tax breaks to encourage the purchase of electric automobiles.
Low Maintenance
Electric automobiles use electrically driven engines. EVs do not require lubrication. Thus, the cost of maintaining these vehicles has decreased. Moreover, users do not have to pay frequent visits to the service station as they require for gasoline-powered vehicles.
Growing Charging Infrastructure
In 2014, California gov. Jerry Brown inked a Charge Ahead California Initiative. The government aimed at 1 million zero-emission vehicles on the road by 2023. Furthermore, In 2020, California registered around 655,000 EVs and less than 22,000 charging stations.
In India, companies are rapidly investing in building the charging infrastructure. ElectriVa, an electric vehicle charging startup, recently introduced its plan to install EV charging stations at around 100 locations in the country’s capital, Delhi. Tata Power also announced its achievement of establishing a network of 1000 EV charging stations in India. The news came out on 25 October 2021.
Favorable Government Initiatives
China holds the highest share in the electric vehicle industry. Moreover, the US government unveiled its plan in Dec 2021 to establish around 500,000 charging stations. Recently, China also introduced a significant mandate. According to the mandate, automakers are required to make up 40% of all-electric vehicles (EVs) of all sales by 2030.
Furthermore, BMW is forecast to expand its services in China by producing the X5 mid-size luxury SUV.
Declining Battery Costs
Battery prices are falling at a faster rate. Many companies are establishing their own pant in order to increase the profit.
Tesla declared its plan in 2020 to introduce a new cathode plant in North America for its batteries. With this, the company will be able to reduce the cost of the supply chain.
Toyota Motor Corporation also declared that the company aims to build a new $1.29 billion battery plant in North Carolina. This new initiative is forecast to begin in 2025. Moreover, it will produce lithium-ion batteries for approximately 800,000 vehicles per year.
LG Chem, a South Korean company, has also announced plans to invest $419 million in battery manufacture. In Gumi, South Korea, the business plans to develop a cathode material production plant.
Growing Initiatives from the Companies
Recognizing the future potential of electric vehicles, companies have increased the production of electric vehicles globally. A German multinational automotive manufacturing corporation, Volkswagen, unveiled its plan to increase the production of electric vehicles at its Wolfsburg plant by 43%. Moreover, General Motors Co has also set the goal to outgrow competitors. The brand will increase its electric vehicle lineup. The company will invest around $35 billion with the aim to introduce 30 new electric vehicles by 2025.
Bajaj Auto has announced intentions to invest Rs 300 crore in an electric vehicle manufacturing facility. Ola Electric also aims to add 4,000 electric vehicle charging stations as part of its charging infrastructure expansion.
Omega Seiki Mobility (OSM), a subsidiary of Omega Seiki Corporation, invested $200-300 million in the light commercial vehicle market. Tata Motors aims to invest more than $1 billion over the next 4-5 years to revamp its commercial vehicle road map, with electric vehicles at the center.
Such initiatives indicate that electric vehicle production is growing at a faster pace. Companies and governments are highly focused on expanding EV production and sales. As a result, it will ultimately boost the growth of the industry.
Astute Analytica estimates that the global electric vehicle market will grow at a tremendous compound annual growth rate (CAGR) of 23% during the forecast period from 2021 to 2027.
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