Why Could It Be a Critical Year for Electric Cars?

Sales battery powered cars only Fossil fueled vehicle deliveries were stagnant, with increases in the US, Europe and China last year. The demand for electric cars is so strong that manufacturers are asking buyers to make deposits months in advance. And some models are effectively sold out for the next two years.

Battery-powered cars are at a turning point and will enter the mainstream this year as automakers begin selling electric versions of one of Americans’ favorite vehicle types: pickup trucks. Their arrival represents the biggest upheaval in the auto industry since Henry Ford introduced the Model T in 1908 and could have far-reaching consequences for factory workers, businesses and the environment. exhaust emissions are among the biggest contributors to climate change.

Although electric vehicles still make up a small slice of the market — about 9 percent of new cars sold last year The world had electricity, which was 2.5 percent in 2019, according to the International Energy Agency – their rapid growth could make 2022 the year the march of battery-powered cars becomes unstoppable, and the internal combustion engine faltering towards obsolescence.

The proliferation of electric cars will improve air quality and help slow global warming. The air in Southern California is already a little cleaner, thanks to the popularity of electric vehicles there. And the explosion is rare good news for President Biden. Struggled to advance climate agenda in Congress.

Wedbush Securities, an investment firm, estimates that the auto industry is on track to invest half a trillion dollars over the next five years to transition to electric vehicles. This money will be spent on repairing and building factories, training workers, writing software, upgrading franchises and more. Companies are planning more than a dozen new electric car and battery factories Only in the United States.

“It’s probably one of the biggest industrial transformations in the history of capitalism,” Scott Keogh, CEO of Volkswagen Group of America, said in an interview. “The investments are huge and the mission is huge.”

But not everyone will benefit. Manufacturers of mufflers, fuel injection systems and other parts could go out of business and put many workers out of work. About three million Americans making, selling and servicing cars and auto parts, and industry experts say it will require fewer workers to manufacture electric cars because cars have fewer components.

Over time, the battery substances such as lithiumNickel and cobalt may become more sought after than petroleum. Prices for these materials are already skyrocketing, which could increase the cost of electric cars and limit sales in the short term.

The transition may also be limited by the lack of places to plug in electric cars, making the vehicles less attractive for people driving long distances or for apartment dwellers who can’t charge at home. There is Less than 50,000 public charging stations in the United States. The infrastructure bill Congress passed in November includes $7.5 billion for 500,000 new chargers, but experts say even that number is too small.

It may also take time to see the climate benefits of electric cars: replacing 250 million existing fossil fuel cars and light trucks it can take decades unless governments provide greater incentives to car buyers. Cleaning up heavy trucks, one of the biggest sources of greenhouse gas emissions, can be even harder.

Yet the electric car boom is already reshaping the auto industry.

The biggest beneficiary – and the biggest threat to the establishment – ​​is Tesla. The company led by Elon Musk Delivered nearly one million cars in 202190% increase compared to 2020.

Tesla still leads the smallest but fastest growing segment compared to auto giants. Wall Street is worth nearly $1 trillion to the company, more than 10 times that of General Motors. That means Tesla building factories. Texas and Germanycan expand easily.

“At the rate of growth right now, it will be bigger than GM in five years,” said John Casesa, a former Ford executive who was a senior general manager at Guggenheim Securities at the Federal Reserve Bank forum in Chicago in January.

Most analysts thought electric vehicles wouldn’t take off until they were bought as cheaply as petrol models – a milestone for us that’s still a few years away. reasonably priced cars that most people can afford.

But wealthy buyers are increasingly using electricity as extreme weather makes the devastating effects of climate change more tangible, and as rumors spread that electric cars are easy to maintain, cheap to refuel and fun to drive.

Porsche’s Taycan, an electric sedan that starts at around $83,000, outsold the company’s signature 911 last year. Mercedes-Benz sold nearly 100,000 electric cars and pickup trucks in 2021, up 90 percent from the previous year.

Ford will soon begin selling the Lightning, the electric version of the F-150 pickup truck that has been at the top of the US sales charts for decades. He originally planned to make 75,000 per year. But demand has been so strong that the company is racing to double the production of Lightning, which starts at $40,000 and goes up to over $90,000. Ford stopped taking reservations after collecting 200,000.

“We will be able to sell anything we can,” said Hau Thai-Tang, Ford’s chief product platform and operations officer.

A growing selection of electric pickups and sports all-terrain vehicles is attracting buyers uninterested in Tesla’s minimalist cars, which are most popular in coastal cities and suburbs.

Take Eddie Berry, who owns an auto parts delivery business in Groveport, Ohio, near Columbus. He’s long relied on pickup trucks for work and camping trips. He had little interest in electric vehicles until Lightning. His approximately $75,000 truck will be delivered this spring.

“There’s a lot in this truck that will help me,” said Mr. Berry. The locking front trunk that an engine normally sits in will give it a safe space to carry parts. It won’t spend $80 on fuel every few days.

Because lightning can be used as a power source, it will revolutionize the tailgate at Ohio State football games. “I’ll be able to set up my big screen TV,” said Mr. Berry. “I can power my electric smoker for ribs and pork. I’m so excited. I’ll be the man everyone’s talking about.”

Electric car sales could be even higher in 2021 excluding production bottlenecks. Mr Keogh said Volkswagen has sold about 17,000 ID.4 SUVs in the United States, but could sell for four times that.

Mike Sullivan, owner of LAcarGUY, a dealer chain, sold their ID.4s within weeks of their arrival. “It becomes the best-selling model when we have them,” he said. Supply will increase this year when Volkswagen starts manufacturing ID.4s in Chattanooga, Ten. instead of importing them from Germany.

On the high end, electric vehicles are already competitive on price, and their buyers can save thousands on maintenance and gas. (Electric cars don’t need oil changes, and electricity is often cheaper per mile than gasoline.)

The Tesla Model 3 and Jaguar XF P250 sedans retail for around $46,000. But owning a Tesla for five years costs $16,000 less, according to calculations by Kelley Blue Book, a vehicle valuation firm.

Electric vehicle sales in the United States will continue to boom if Europe and China take any action. battery cars in december Outperforms diesel cars in Europe first time. According to Matthias Schmidt, an independent analyst in Berlin, more than 20 percent of new cars in 18 countries, including the UK, were electric.

In 2015, more than half of Europe’s new cars ran on diesel fuel, the result of tax policies that made diesel cheaper than petrol. But government incentives for electric cars and penalties for automakers that don’t meet emissions targets have changed the equation.

About 4 percent of new cars in the United States were electric last year, up from 2 percent in 2020.

The goal of electric cars is to reduce tailpipe emissions and smoke-causing pollutants, a leading source of carbon dioxide. According to the South Coast Air Quality Management Area, electric cars have already had a minor impact on air quality in Southern California, resulting in a 4 percent reduction in nitrogen oxide emissions from passenger cars compared to what they would otherwise have. Los Angeles.

Of course, battery-powered cars also have environmental costs. But even considering the energy and raw materials they require, electric vehicles are far better for the climate than conventional vehicles, according to the Yale School of the Environment. Research.

Inevitably, such a significant transition will cause dislocation. Most of the new battery and electric car factories planned by automakers are located in Southern states such as Georgia, Kentucky, North Carolina and Tennessee. Its gains may come at the expense of the Midwest, which will lose internal combustion manufacturing jobs.

That hasn’t happened yet, because petrol vehicles still dominate sales. But while battery power will take its market share, traditional models will benefit less from the cost savings from stamping the same vehicle hundreds of thousands of times.

The next few years could be dangerous for automakers who have been slow to deliver electric vehicles. Toyota, pioneer of hybrid vehicleswon’t offer a battery-only car until later this year. Ram does not plan to launch a competitor to Ford’s Lightning until 2024.

Chinese companies like SAIC, owner of the British MG brand, are using technological change. Entering Europe and other markets. Young companies like clear, Rivian and Nio Aim to follow Tesla’s playbook.

Vintage car manufacturers face a tough learning curve. general manager Bolt recalls its electric hatchback last year due to the risk of burning the battery.

The companies most at risk might be the small machine shops in Michigan or Ontario that manufacture piston rings and other parts. Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor, Mich, said that at the moment these businesses are busy as demand for all vehicles is declining.

“Many of them have glasses and don’t look that far down the road,” said Ms. Bailo. “It’s irritating.”