The electric vehicle (EV) mass market could be the next evolutionary stage for the auto industry. As Darren Winters explains, established auto manufacturers and household names like BMW, Volkswagen, Honda, Fiat, Ford, Toyota, Nissan, and Chevrolet have hit the 10,000 sales milestone in electric vehicles.
The fact that traditional auto manufacturers continue to pour capital into EV production plants is a clear signal that the auto industry could be gearing up (no pun intended) for an EV mass market
A new dawn, the electrification of transport could revolutionize the way billions of people move could now be upon us.
Europe’s recognized car makers are already positioning themselves for the coming EV mass market and they are eyeing China as their EV mass market.
China has secured €21.7 billion of investment in the past year to manufacture electric vehicles (EV) while Europe secured only €3.2 billion, according to European car makers public announcements compiled by Transport & Environment (T&E).
China is expected to be the epicenter of the EV mass market, based on capital flow investments
Darren Winters explains that with regards to EV, capital is gravitating to China because the east Asian county requires car makers to manufacture electric vehicles in its territory. China’s mandate will no doubt lead to more technology transfer downstream and it is currently a key driver of investment in EVs.
China’s 1.3 billion population manufactures only a third more cars than Europe does (23.5 million passenger cars manufactured in 2017 versus 17 million in Europe). Nevertheless, China’s €21.7 billion of investment in EV dwarfs that of Europe’s €3.2 billion in the sector.
China is likely to be spearheading the coming EV mass market
Chinese company BYD, backed by Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) specializes in electric and plug-in petrol-electric hybrid vehicles. BYD is currently the largest EV manufacturer in the world, selling 250,000 EVs in 2018.
The Chinese car maker manufacturers bus in the US and it has also announced future plans to sell its cars in the US market as well.
Gaining a foothold in the (EV) mass market is challenging as new technologies are constantly evolving and better-capitalized competitors are eager to take the lead
Darren Winters takes, for example, the Tesla Roadster which started out in the lead and only then to be toppled by the Nissan Leaf and Chevrolet Volt, which are the most sold models in the US from 2011-2016.
Tesla did eventually rise to the challenge with the Tesla Model S which soon surpass the Leaf by the end of 2017. But the Tesla Model S has also had its share of problems and many market watchers doubt that the company can maintain its lead in the US market. Tesla’s stock price has almost halved since 2019 with its stock price trading at 209.26 USD at the time of writing this piece.
For investors, the coming (EV) mass market is like a game of snakes and ladders
The front line innovators, like Tesla, are now being taken on by recognized and capitalized auto manufacturers who are eyeing their future in the coming EV mass market.