The Electric Vehicle Revolution is Far from Over

The Electric Vehicle Revolution is Far from Over

Contrary to the naysayers, the electric vehicle (EV) revolution is far from over. Despite the recent layoffs at Tesla and Mercedes' decision to extend the production of internal combustion engines, the EV market is still thriving.

While General Motors (GM) and Ford are scrambling to produce hybrids and plug-in hybrids, GM's strategy has been met with skepticism. The company discontinued the beloved Chevy Bolt before its replacement was ready and faced software issues with the newly introduced Chevy Blazer EV. Despite these setbacks, the EV market is far from stagnant.

According to a market analysis by Bloomberg published on May 28, 2024, the EV industry is just gearing up for its next growth phase. The first quarter of the year saw a surge in electric car sales for most automakers. Six of the top ten EV manufacturers in the US reported significant sales growth compared to the previous year.

Consumers are gravitating towards brands that offer superior battery range, faster charging, and competitive pricing. However, the delay in the release of new vehicles has led to the perception of a market slowdown. Despite this, demand for EVs continues to grow, albeit at varying rates across different brands.

GM and Tesla had a rough start to the year due to their own product cycles. GM discontinued the Chevy Bolt, and Tesla paused production of the Model 3 for updates. Despite these challenges, US electric car sales grew by 23% in the first quarter of 2024.

Bloomberg suggests that GM, despite its missteps, is poised to drive EV growth in the US. The company is committed to electrifying some of its biggest brands, which are finally reaching production after years of delays. These vehicles will be powered by the new Ultium batteries, a joint venture between GM and LG Chem.

The biggest uncertainty for the US EV market is Tesla's product pipeline. The company relies heavily on the Model 3 sedan and the Model Y SUV, which account for 95% of its sales. Tesla's future vehicle launches remain uncertain, adding to the unpredictability of the market.

Tesla's Superchargers in the US are also a source of uncertainty. The company recently opened its network of over 2,000 US charging stations to non-Tesla owners. However, during this transition, Tesla laid off its Supercharger staff, adding to the uncertainty.

The perceived EV slowdown in the US has led some automakers to hold back their investments until there's more market clarity. However, they should be following the lead of Hyundai and GM by aggressively introducing affordable electric car models to build economies of scale.

Larger volumes of EVs are on the horizon. This year, Hyundai, GM, and Ford are each on track to sell 100,000 electric cars, marking a potential turning point for US electric car production. Some of the biggest EV laggards are also entering the US market this year.

US and worldwide EV sales are both expected to grow roughly 20% this year. While this is less than the 46% expansion the US experienced in 2023, such a level of growth can't be sustained indefinitely. If the global market for EVs continued at this "slowdown" pace indefinitely, virtually all cars would be electric in a decade, according to Bloomberg.



Source: Bloomberg / CleanTech