Who will win the electric vehicle race?
The media assures us that there’s an “EV race” underway, but the race to develop electric vehicles is a lot more complicated than a simple drag race (we know who’s always going to win those). You could say there are at least three races going on: automakers are competing against each other; Big Auto is scrambling to defend its market against the scrappy EV startups; and the main global auto-producing regions (North America, Europe, China, Japan and Korea) are vying to lead the transition and grab a share of the new jobs and economic gains at stake.
Above: Tesla Model X and BMW i8 charging (Source: EVgo)
In a new video from the Financial Times, four reporters deliver some observations about the current state of the EV industry, while zipping around the world’s EV hotspots in four representative vehicles.
Christian Shepherd navigates the streets of Beijing behind the wheel of a NIO ES6. “In China, it’s all about the EV startups,” he says. “For decades, China has wanted to have a globally-recognized car brand. They’ve never really been able to achieve that. This revolution in the auto industry...is the perfect opportunity for them.” The first wave of Chinese EV-makers included established companies such as BYD, which sold large numbers of taxis to governments. The second wave is “really trying to follow more of the Tesla model. Now we talk about the Fab Four: NIO, Xpeng, WM and Li Auto.”
Claire Bushey, tooling around Chicago in a Ford Mustang Mach-E, says, “The electric car race in the US is between Tesla and everyone else. Yes, Tesla has had some quality-control problems—it’s almost like they’re a new car company!” She sees a shakeup ahead for the industry. “The companies that get it right will be around for another generation. Those that don’t will disappear.”
Peter Campbell glides through the lovely English countryside in a Volkswagen ID.4 as he tells us, “Tesla came in 2012 and released the Model S, which showed what an electric car could be.” However, he’s skeptical about the oft-repeated trope that Tesla and other EV startups will drive legacy automakers into Kodak-style obscurity. “This is an industry that makes 19 million cars a year, and Tesla last year produced half a million. The idea that Volkswagen, GM or Toyota are going to be bankrupt in the next few years because of Tesla is just nonsense...The advantages of being an established carmaker are colossal.”
Leo Lewis, touring Japan in a Nissan LEAF, also rejects the idea that Big Auto will go the way of Big Photo. “A lot of these established players are going to be very serious competitors. I think they’re going to put up a hell of a fight.” He takes a contrarian view, speculating that Toyota or Mercedes might reverse course and emerge as “the one to beat.” (We’d sooner put our money on the Volkswagen Group or GM.)
Above: FT reporters look at how today's automakers are trying to take on Tesla in the electric vehicle space (YouTube: Financial Times)
The four journalists appear to agree that internal-combustion vehicles are “a dying breed.” The younger generation is gravitating towards EVs in Asian markets, and once automakers start offering more electric SUVs and pickup trucks, momentum should shift in the US as well.
If there’s a race going on among auto-producing nations, the Land of the Open Road is steadily falling behind. The European market is in many ways more conducive to electrification, with its high gas prices, more progressive politics, and generally shorter driving distances. “Americans think 100 years is a long time, and Europeans think 100 miles is a long way,” quips Claire Bushey. “I don’t know who’s going to win [the so-called EV race], but I don’t think it’s going to be the US.”
The FT quartet point out that government support has been one of the major drivers of the EV revolution so far. Shepherd tells us that the Chinese government had invested some $100 billion to promote EVs, prior to 2019. This inevitably led to some scams and scandals. However, “in the last couple of years everything has changed. Tesla arrived in China, set up its Shanghai Gigafactory, and consumers really started to get interested in electric cars.”
In Japan, by contrast, support for e-mobility from the government and major automakers has been lacking. Part of the reason for the country’s e-laggard status is “the fault of Toyota and others,” says Lewis. Toyota and Honda have resisted developing pure EVs, and poured investment into hydrogen. Lewis points out, as many others have, that “producing hydrogen in a form where you can put it into the back of a car is very expensive and very carbon-intensive. In August, the postponed Tokyo 2020 Olympics was supposed to have been a big global showcase for hydrogen technology.” Instead, it turned into a fiasco.
Of course, while the conceit of an “EV race” is a fun way to highlight the differences among automakers and auto-producing regions, the real race is against air pollution and climate change. Countries and their flagship companies may compete, but they also need to cooperate against the common foe, as exemplified by Tesla’s symbiotic relationship with China. As Mr. Campbell sums it up, “Wherever you are in the world, it might be a bit slower or it might be a bit quicker, but we’re all going to get there in the end.”