More Americans are thinking about getting an electric car the next time they need a new vehicle. For electric vehicle-only automakers like Tesla and Rivian Automotive, this is excellent news. It's also good news for established automakers like Ford Motor and General Motors. The established players are pouring billions of dollars towards catching Tesla and other EV startups.
According to the most recent survey conducted by the 120-year-old American Automobile Association, more commonly referred to as AAA by drivers, 25% of Americans are likely to make their next auto purchase an electric vehicle (powered solely by electricity, not a hybrid). For millennials, that percentage is 30%.The primary justification is financial savings on fuel.
Survey Brings Good News to the EV Industry
In the United States, the penetration of battery-electric vehicles was around 3% in 2021. There's room for improvement. The United States adopts electric vehicles more slowly than the rest of the world. In June, battery-electric or plug-in hybrid models made up more than a quarter of all new cars sold in China. About 11% of new automobile sales in Europe were battery-electric vehicles as of May 2022.
Due to their belief that electric vehicles will dominate the road transportation industry, many automakers worldwide are investing heavily in EVs. As EV adoption rises, automakers from Asia, Europe, and the U.S. are competing to become the industry leader in EV production and sales, each expecting to take over the market by the end of the decade.
In response to worries that continued supply chain delays would cause buyers to have to wait longer to buy EVs, Volkswagen CEO Herbert Diess said this month that the outlook is quite favorable. Automobile manufacturers have had trouble obtaining some automotive parts, like as semiconductors, because to the Covid epidemic and other disruptions, but Diess believes things will improve.
VW announced a $20.38 billion investment in its battery cell industry through its PowerCo arm this month with the groundbreaking of its new cell plant in Salzgitter, Germany. By the end of the decade, the corporation hopes to generate over $20 billion in yearly sales and 20,000 new jobs. To create a combined capacity of 240 gigawatt hours (GWh) as the region develops into a battery production hub, SalzGiga will serve as the design template for five other Volkswagen battery cell plants around Europe. This will make it a significant rival to leading American EV company Tesla, which also has German manufacturing facilities.
But to compete more effectively with Europe, a number of Asian manufacturers are also making significant investments in their EV production. The first South Korean EV facility for Hyundai Motor was officially unveiled, and production is scheduled to begin in 2025. Hyundai recently unveiled several new electric vehicle (EV) models that will be available in the Asian and European markets in the upcoming years. Between now and 2025, the business, which owns Hyundai and Kia, will invest about $48.1 billion in South Korea, as well as an additional $5.5 billion in its EV and battery operations in the United States.
The largest carmaker in Japan, Toyota, released its bZ4X electric SUV in May as part of the country's race to catch up with the U.S., European, and Chinese markets. Toyota had to recall its first mass-produced EVs less than two months after they were introduced, further impeding Japan's expanding EV market. Toyota recalled 2,700 electric vehicles (EVs) in June due to a problem with the tires that could cause them to come loose. Although no incidents had been reported, the Japanese safety regulator raised concerns about the wheel coming off the vehicle during rapid turns, leading to the recall of the bZ4X SUVs intended for European, American, Canadian, and Japanese markets.
Numerous automakers worldwide are investing heavily in their EV business to become more competitive as traditionally fueled vehicles are gradually phased out over the course of the next decade and beyond, despite a number of difficulties related to supply chain disruptions, material scarcity, and rising costs.