Inside the Rise of Electric Vehicles: 4 Drivers Fast-Tracking EV Adoption — Prime Chale
2020 was a golden year in the annals of electric vehicles, and 2021 is proving to be even more incredible. Tesla delivered nearly 500,000 vehicles in 2020, EVs sold more than internal combustion engines in Norway, and of course, EV stocks went through the roof. To be fair, there were some ugly bits, such as the Nikola debacle, but overall, EVs adoption is growing at a rapid clip than the auto market generally.
In light of the incredible rise of electric vehicles, with no fall in view, we explain the phenomena pushing the EV industry forward. But first, we examine the state of EV in 20201.
[READ: I, Robot: All you need to know about Robotics I]
The state of Electric Vehicles in 2021
Electric Vehicles are beloved for a reason — they have low maintenance, minimal carbon footprint, quiet drive, and are environmentally friendly. 2020 marked the beginning of the decade of EV, with most carmakers embracing the gospel of EV. Carmakers such as VW, Toyota, Ford, Hyundai have started or plan to make EVs. Many upstarts have introduced interesting cars such as Rivian, Lucid, Polestar, and many more, with plans to start selling soon.
2021 is proving to be an even better year for electric vehicles. Tesla’s share has been on a rise, Nio planning to sell a car with a range of 621 miles (1000km), Xpeng securing a $2 billion credit line to expand manufacturing, and many more. Also, starting this year, many of the much-hyped electric vehicles will begin selling, including Rivian’s R1T pickup truck and R1S SUV, Lucid Air, Tesla’s Truck, Semi and Cybertruck, Ford’s Mustang Mach-E, GMC’s Hummer EV, VW’s ID. 5 and many more.
Furthermore, various factors, such as climate change, increased government support, changing consumer sentiments, amongst others are driving up the adoption of EVs all over the world, with hotspots in China, Europe, and the United States.
It should be noted, however, that, EV is more of a growth market, a fact underscored by the fact that apart from Tesla, most other manufacturers have yet to prove their mettle. While not all manufacturers will be successful, there is no denying that there is a huge prospect for growth.
Electric Vehicles Drivers
Climate Change
Climate change drives the rise of Electric Vehicles because of several reasons, the root cause of which is global warming. Regardless of conspiracy theories, global warming is indeed real, and governments across the world have started setting deadlines for the phasing out of Internal Combustion Engine (ICE) vehicles. More than twenty countries have set out timelines for the phasing out of ICE vehicles, including Canada, France, Norway, India, Spain, and many more.
Also, countries need to meet emission standards under international law such as the 2015 Paris Agreement, and electric vehicles are a nifty way of doing so. As a result, bans and fines are being implemented on car makers, especially in the EU. Carmakers are therefore turning to EVs as a way to reduce emissions to avoid fines and brand damage.
Finally, on top of bans and fines, many countries have started limiting the access of ICE vehicles to certain cities. Cities like Madrid and Rome are delimited as zero-/low-emission zones to tackle pollution. Other cities are starting to limit the number of ICE vehicles on their roads.
Sense and Sensibility
One of the barriers to EV adoption is consumers’ concern regarding EV driving range, price, availability of charging facility, as well as the charging time. However, these are quickly becoming non-issues. First, EVs range is increasing with better battery technology now being available. Tesla and VW offer EVS with ranges above 300 miles, with other carmakers offering vehicles with 600 miles of range.
Charging facilities are also springing up every day, with over 1 million charging stations already. Furthermore, with the increase in competition, EV prices are dropping and are competing favorably with ICE vehicles. Tesla intends to produce a $25,000 EV while the Wuling Hong Guang Mini EV is China’s best selling EV with a price of $4,200. Subsidies are also in place in various markets, which makes purchasing an EV sometimes cheaper, or at least on par with comparable ICE vehicles.
Finally, EV charging time is decreasing, as most car makers have adopted the same standard for charging, which makes charging an EV faster. Charging will become faster in the future. With governments committing huge amounts of money to EV, and more EVs becoming available in form of cars, trucks, buses, and even ikes, public sentiments will only continue to drive EV sales up.
Economics
The economics driving EV can be explained from the point of view of the government, consumers, carmakers, and the stock market. For the government, supporting the growth of EV is beneficial as it makes it easier to hit emission targets, lower pollution, appeal to public sentiment regarding climate change, and drive up the economy- at least in the short time to recover from COVID-19. Therefore, many governments are offering financial incentives such as subsidies and tax reductions to their citizens buying EVs. Countries are also providing credit lines to EV makers.
For consumers, the compelling financial incentives offered by governments, the impending ban on ICE vehicles, the cost-effectiveness of EVs when it comes to maintenance, and many more are reasons enough to choose EVs.
For carmakers, it is a sound business decision to make EVs. The writing on the wall points to the rise of EV, therefore, it is a ‘make EV or grow irrelevant’ situation. Government and investor pressure also make the shift to EV all the more pressing.
Finally, EVs are a growth market, and everyone wants to invest in the next Tesla. The growth of Tesla has increased the market cap of other EV manufacturers, which is good news for the stock market.
The Band Wagon Effect
Humans are social animals, and people tend to align their behavior with those of the majority, known as the herd mentality. This also applies to EV, as almost everyone who drives one wants to buy one too. Clearly, EV is the trend this decade, and many people will intuitively be guided to it.
It is also worth mentioning that Elon Musk, for all his Twitter antics, is a great ambassador/herd master when it comes to EV. He clearly has done most in hastening the adoption of EV.
For the Road (Pun unintended)
Forecasts project an increase in EV sales to 2030 and beyond. However, the sale of EVs has mostly been concentrated in China, US, and Europe. From this year onward, EV sales will start diffusing to other regions, with Teslas preparing to start making cars in India, and many EV startups springing up across Africa and Asia. The intense competition in the EV market will also see many carmakers expanding to other markets to sell more cars, bringing with it attendant growth in EV infrastructure.
Originally published at https://primechale.com on January 14, 2021.
