By Jake Sheckter, Staff Writer
Take a moment to imagine what a race to the future might look like. Many of us hear the word “future” and think of flying vehicles, robots, space travel or other concepts we’ve probably seen in a sci-fi movie. However, this race is a lot less theoretical than you might have thought; in fact, it’s already begun. But why is this race occuring, who are the competitors, who is the leader and where is the finish line?
In 1996, General Motors released what could be called the catalyst for all electric vehicles today: The GM EV1. While being the pioneer of fully electric vehicles (EVs), the EV1 had just two seats and could only travel about 50 miles on a charge. Due to the costly production costs (~ $1 million per vehicle), the impractical distance per charge, and overall lack of demand, the EV1 was discontinued in 1999. 1996 also happened to be the same year the auto industry successfully lobbied against a mandate from the California Air Resources Board to make more electric vehicles. Although the electric car has had a rough past, there has been a realization that industry executives and analysts have made all over the globe. They believe society is approaching a tipping point where the mass adoption of electric vehicles becomes inevitable due to falling battery costs, increasing regulatory pressures, and growing government incentives. The International Energy Agency (IEA) predicts the adoption of electric cars will be nearly 15 times higher in 2035 than it was in 2019.
As the race for the EV market share gradually takes form, numerous contenders have risen up to the challenge. Newer disruptors in the industry such as Tesla (NASDAQ: TSLA), NIO (NYSE: NIO), XPeng (NYSE: Xpev), and BYD have exemplified the importance of rapid innovation and first-mover advantage. These newer EV companies also have the benefit of not having to carry around the “baggage” of large dealership networks, historical unions, or having to transition entirely from combustion engines. On the other hand, well-established car manufacturers like Volksvagen (Ticker: VWAGY), General Motors (NYSE: GM), and Ford (NYSE: F) maintain the upper hand when it comes to brand recognition, experience, and most of all production.
Every manufacturer entering the EV race comes with their own strategy, goals, and motivation. Split into a few larger groups, we have Germany, U.S.A, China, and Norway leading the world’s EV innovation.
Volkswagen’s luxury Audi brand released the e-tron in May of 2019 with the potential to travel 400 kilometers (nearly 250 miles) on a single charge. The German group which additionally owns Porsche, Bugatti, Skoda, Lamborghini, and SEAT is making an incredible transformation, proving that a carmaker which has relied on combustion engines for over 100 years can produce EVs. Until recently, Volkswagen’s attention was on improving its diesel engines to become more fuel efficient and affordable with the hope of overtaking Japan’s Toyota. Many wonder whether Volkswagen’s radical transition to EVs relates to their massive diesel emissions scandal in 2015. VW has since been fined over $30 billion in penalties and billions more to flip their factories to produce its modular electric car production platform (MEB), hoping to further reduce costs by producing its own batteries. The challenge that has faced Volkswagen is how to market their EV brand correctly as “EV” has become synonymous with Tesla. For the brand’s head of electrification, Stefan Niemand, the answer is found in what Audi has been successfully doing for over a century: building cars that people want to drive. The group aims to produce an electric or hybrid version of every vehicle in its lineup in the next few years, planning to launch 70 new EV’s by 2028, and making 4 out of every 10 cars it sells electric by 2030.
Tesla quickly captured the United States EV market, expanding their vehicle lines, and beginning to expand worldwide. Tesla also caused major ripples in the automaker industry on January 8, 2021 when their company valuation grew to a record $844 billion, making Tesla worth more than all other automakers combined. Despite Tesla only being responsible for less than 1% of world vehicle sales, Ford, on the other hand, plans to double investments in EVs and charging infrastructure. They have also been attempting to change the traditional idea of what an EV looks like with the release of the Mustang Mach-E, staying loyal to the classic muscle car look. General Motors’ announced their goal to achieve zero emissions by 2035. GM brought up the topic of electric vehicles and introduced their new EV batteries in their humorous Superbowl advertisement featuring Will Ferrell’s concerns and complaints regarding America’s EV position compared to Norway.
“Did you know that Norway sells way more electric cars per capita than the U.S.? Well I won’t stand for it,” he says in the commercial as he punches a globe. As incredible as it seems, more than 54% of new vehicles registered in Norway last year were electric, compared to the USA’s mere 2%, placing Norway in the lead for most EVs per capita (18.9 people per EV). Norway’s Audi ad featured Game of Thrones actor Kristofer Hivju, known as Tormund Giantsbane in the show, picking up a globe like the one in GM’s commercial and states “You want to do this to us? To me? To the world? We’re trying to save the world. Save it!”, along with the slogan “Don’t hate. Imitate.” Norway hasn’t necessarily been so well-off with their EVs because of the population’s concern for the climate, rather due to government policies and incentives. While these lighthearted ads bring up the joking rivalry between the U.S. and Norway, this exchange represents the very real struggle to become a world leader in climate and automotive change.
China has definitely taken the EV initiative, leading the world in the number of EVs and charging stations suited for dense urban areas. Today, nearly 47% of all electric vehicles are located in China, according to the IEA. New vehicle registrations climbed to a record high of 9.66 million, according to China’s Ministry of Public Security. China’s EV front is led by three automakers: NIO, Xpeng, and BYD. In March, BYD recorded 24,218 EVs sold, demonstrating an increase of 97.6% compared to March 2020. NIO recorded first quarter sales of 20,060 EVs, beating the same quarter last year by an extreme 423%. Lastly, Xpeng comes in third with 13,340 sold EVs, also up an incredible 487% from the same quarter last year. Regarding import competition, Tesla sold 35,478 locally produced EVs in China in March.
In 2010 there were roughly 17,000 electric cars on our roads, and by 2019 that number reached nearly 7.2 million. Over nine countries now have more than 100,000 EVs on the road, and at least 20 countries reached an EV market share above 1%. To date, more than 17 countries have announced 100% zero-emission vehicle targets through 2050, with France being the first country to put this goal into law with a 2040 cutoff. As battery costs decrease, battery capacity increases, and governmental climate policies are enforced we are beginning to see significant change in the way people treat the automotive industry and other climate-impacting sectors. It’s hard to imagine a world without combustion engines, but eventually, electric cars will just be cars. The future doesn’t creep up on us overnight, it presents itself through each step we take forward. It is our job to ensure we keep taking meaningful steps.