The rise of electric vehicles powered by batteries is a game-changer in the automotive industry. It has generated enthusiasm about the potential impact of these vehicles on sales, car park shares, and aftermarket parts and service businesses.
This transformation is expected to occur gradually over a long period. Therefore, it is vital to start preparing for it now. Early preparation will help industry stakeholders to stay ahead of the curve, adapt to changing consumer demands, and thrive in the evolving marketplace.
The transition to electric vehicles (BEVs) is a significant shift that requires careful planning and investment. It will impact various aspects of the automotive industry, from the manufacturing of vehicles to the provision of aftermarket parts and services.
The move towards electric vehicles will necessitate the development of new charging infrastructure and the upgrading of the electric grid to meet the growing demand for electricity. Therefore, it is essential for all stakeholders, including automakers, governments, and industry players, to take proactive steps to prepare for this transition and ensure a smooth and successful transition to a greener future.
Environmental and Social Benefits
Alternative forms of vehicle propulsion have been extensively explored over the last decade. Lithium-Ion batteries are currently the leading technology for BEVs.
These vehicles have several benefits, including the elimination of tailpipe emissions, instant and plentiful torque, and an excellent design. CO2 emissions are responsible for changing the chemistry of the atmosphere and warming the planet.
Vehicle tailpipe emissions contribute significantly to this problem. Therefore, BEVs are an alternative form of propulsion that can reduce the problem.
The Slow Adoption
Despite their advantages, BEV adoption has been slow, and this is projected to continue. For instance, in the United States, BEVs account for only 1% of the fleet in 2021, and this market share will only double to 2% by 2025. By the end of the decade, the share will only account for 6% of the domestic part. The vast majority of these BEVs will still be under factory warranty.
BEV share may only rise to double digits by 2035. These numbers are optimistic considering current battery technology limits, tepid consumer demand resulting from high costs, and shortcomings in charging infrastructure and the electric grid.
There are several inconvenient truths about BEVs that must be addressed. First, consumers have expressed reluctance to invest in BEVs unless their range anxiety is satisfactorily addressed. This requires increasing the number of charging stations. The government has a goal of investing $5 billion in an additional 500,000 charging stations, but the need is for four times that number.
Second, current battery technology takes all night to charge with standard household current, and fast-charging DC stations typically cost three to four times as much per kWh. Third, the source of the minerals that go into modern batteries is also concerning, requiring more ethical production of battery components.
The Future of the Automotive Industry
Despite the challenges,BEVs are here to stay, and their share of the market will slowly increase. The investment of the Original Equipment Manufacturers (OEMs) and the government will ensure that EVs command a significant share of our transportation system in the future. Internal combustion engines will remain relevant to hybrid vehicles, heavy equipment, and large SUVs and trucks for many decades.
Electric vehicles will be the preferred solution for small package delivery fleets, autonomous urban vehicles, and fleet-shared transportation solutions.
The advent of battery-powered electric vehicles (BEVs) has created excitement in the automotive industry due to their environmental and social benefits, including the elimination of tailpipe emissions and instant torque. BEV adoption has been slow, and projected growth rates are modest due to high costs, range anxiety, and infrastructure challenges.
Nevertheless, BEVs are expected to command a significant share of the transportation industry in the future. The automotive industry needs to start preparing for this transition, while also addressing concerns regarding charging infrastructure, battery technology, and ethical sourcing of battery components. The industry is here to stay, and the future of the automotive industry will involve a mix of BEVs and internal combustion engines.
The BEV industry faces challenges that must be addressed before the full potential of the technology can be realized. However, it is evident that the industry is here to stay and will slowly gain a larger market share in the transportation industry. It is, therefore, crucial to start preparing now for the future of the automotive industry.