Report: EV Enthusiasm Faces Challenges
Reuters is out with a report today showing that while the industry continues to make a strong effort to transition to electric vehicles, the ride won't be smooth, especially for investors.
For example, remember how EV startup Rivian had a higher market value than Ford after going public in 2021? Well, now Rivian has lost 70 percent of its value over the past year.
Reuters points to other example s, such as electric van maker Arrival worrying it will be out of cash in less than a year and Lucid struggling to get the Air built.
The picture was different a year ago when Tesla had a $1 trillion valuation.
Why is this happening? After all, a lot of new EV models are hitting the market. In China, the world's biggest car market, EVs have a 21 percent share of the market. It's 12 percent in Europe -- though it's still a weak 6 percent in the States.
Empirical data is one thing. It's anecdotal, obviously, but yours truly has tested far more EV models than in 2021. I've also seen a fair bit of Rivians running around my town recently. So if there are more EV models to choose from, and if at least some folks appear to be buying them, why are startups losing value?
Reuters blames the usual culprits -- EV charging infrastructure that hasn't developed fast enough and the increasing cost of batteries. The latter is the result of materials shortages and a lack of certainty around government subsidies.
Forecasters and analysts seem to believe that while EVs will snag a bigger share of the American market by the end of the decade, the internal-combustion engine isn't dead yet. Nor will EV growth be a smooth line trending upwards, but rather a series of ups and downs.
For example, consultant firm AutoForecast Solutions told Reuters that by 2029 EVs could get a market share of about a third in the United States, and about 26 percent globally. A recession next year, or anytime soon, likely would slow EV adoption.
An analyst with Ward's Auto told Reuters that he thinks that vehicles powered by internal-combustion engines will make up just under 80 percent of the market.
In the short term, automakers are putting out more and more EVs. An analyst with AFS said that there could be up to 74 EV models for sale in the U.S. by 2025 -- and that he thinks fewer than 20 percent of those models will sell in numbers greater than 50,000 units per year.
Your author's take has always been that once charging becomes more accessible, faster, and more reliable, EV adoption will increase. Similarly, I believe increasing EV range will help adoption, as will a drop in MSRPs for EVs. That said, the challenges that Reuters points out are very real, and it's one reason most of the TTAC staff is skeptical about government mandates in parts of Europe and California for all new cars sold in those places to be EV only by 2035.
Someday, EVs may be the dominant vehicle type. But the ride to get there will be bumpy.
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You mean the same problems that EVs have had for years, range, charging infrastructure, and price, are still problems today and for the near future? Who could have seen that coming?
The purchase price of EV's is outrageous. That alone will stop me from ever considering them. And then there is the stupidity of roofless charging stations and the overall cost to go the 500 miles my current ICE vehicle can go. There is no economic sense that would make an EV cost effective for me. EVER.