The EV (electric Vehicle) market is only expected to grow in the coming years - a recent IHS Markit study forecasts a 70% increase in global sales in 2021. Investor interest reflects this, with Tesla’s share price up 8x in 2020 and numerous EV start-ups such as Faraday Future and Lucid being selected by Special Purpose Acquisition Companies (SPACs) to go public. On top of this, established manufacturers such as Volvo, Jaguar and Bentley have set dates for the electrification of their ranges.
It’s not all good news...
EV stocks are susceptible to volatility on the stock market, with both Tesla and Lucid experiencing significant devaluations in recent weeks. This has largely been attributed to their ‘hype stock’ status, though there are undoubtedly issues at the core of the industry model.
Globally, we’re still a long way from the tipping point where EVs are bought more than combustible engines. Fundamentally, consumers still want cars to be simple and dependable, and aren’t ready to prioritise their cars’ environmental impact over their convenience.
There are several problems preventing major uptake:
- The charging infrastructure network is still limited, inducing range anxiety
- Uncertainty regarding whole-of-life costs & reliability
- A lack of convenience models
- And, of course, they’re expensive
Before a tipping point can be reached, these key barriers must be resolved.
Stewart McKee, Managing Director of Electric Village, a producer of home charging EV infrastructure, has a slightly sunnier outlook though, explaining that the UK is progressing towards the tipping point following Boris Johnson’s ban on the sale of combustible engine vehicles by 2030. He sees regulatory changes such as these as a key factor in the uptake of EVs everywhere. Up until now there have been countless demonstrations and trials, but little impetus for manufacturers to go electric on a grand scale. Bold regulation has changed this.
“it’s now about implementation, not experimentation”
Stewart Mckee, MD Electric Village
And whilst, of course, the above-listed consumer obstacles will impede immediate uptake, manufacturers will ensure their removal, should they damage their KPIs come 2030.
What remains to be seen is whether the world’s largest consumers of cars, China and the US, can follow suit in creating the regulatory conditions required to get manufacturers to focus more resources on the development of convenient and dependable vehicles which will bring us to the global tipping point.
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