The Near Future of Electric Cars: Many Models, Few Buyers
There will be more than 100 different battery-powered vehicles available in five years, despite little interest so far from drivers.
Khodrocar - Automakers with ambitious plans to roll out more than a hundred new battery-powered models in the next five years appear to be forgetting one little thing: Drivers aren’t yet buzzed about the new technology.
Electric cars—which today comprise only 1 percent of auto sales worldwide, and even less in the U.S.—will account for just 2.4 percent of U.S. demand and less than 10 percent globally by 2025, according to researcher LMC Automotive. But while consumer appetite slogs along, carmakers are still planning a tidal wave of battery-powered models that may find interested buyers few and far between.
"When you hear people talk about the tipping point, it’s really that they’re counting the number of product offerings,” Hau Thai-Tang, Ford Motor Co.’s global head of product development and purchasing, said of electric cars. "Nobody can cite what the actual demand will be.”
With battery costs declining rapidly and Tesla Inc.’s stock price on a tear, automakers are rushing to get in the game with their own all-electric models. General Motors Co. has announced plans to roll out 20 models by 2023, while Ford and Volkswagen AG are among those planning new electric lineups in China. Toyota Motor Corp. this week promised more than 10 electric models by early next decade.
"There’s certainly more hype than real growth in sales volume,” Jeff Schuster, senior vice president of forecasting for LMC, said in an interview. "How long have we been talking about EVs? We’re now finally seeing them in numbers, but the sales numbers are not taking over the industry by any means.”
It’s a mix of panic and promise that’s driving automakers to set ambitious goals to catch up to perceived market leaders like Tesla and GM, which each are enjoying a run-up in their stock prices this year.
There’s a growing optimism that the electric market is ready for liftoff, based in part on improvements in battery chemistry and costs and in part on the Field of Dreams adage: If you build it, they will come.
Industry executives convinced drivers will abruptly exit their internal combustion engine vehicles in favor of electrics may find themselves too overzealous, with LMC forecasting gasoline-powered engines will still make up about 85 percent of U.S. new car sales in 2025. But that shift could accelerate as electrified vehicles reach price parity with gasoline-powered cars, which Bloomberg New Energy Finance predicts will happen by 2029 or sooner for most models.
Rick Haas, former chief engineer of the Tesla Model S who now runs the North American operations of Indian automaker Mahindra & Mahindra, counts himself in the optimistic camp. Although today’s drivers aren’t too excited about battery cars, tougher regulations in places like China and the power-thirsty needs of driverless features could help speed the transition along.
"Things move about 10 times the speed that they moved 25 years ago,” Haas said. "As soon as the ball crests the hill and everyone thinks, ‘I’m comfortable with this,’ then the whole industry will flip.”
127 electric models will be introduced in the next five years and no automaker wants to be left behind to sell the 21st Century version of the buggy whip: a car that runs on fossil fuel.
Ford does not want to be one of the casualties. Thai-Tang said his engineers and suppliers are working hard on developing a cost-efficient battery that is better and cheaper than today’s lithium-ion versions. Toyota is working on energy-dense solid-state batteries, seen as the next frontier in electric power, with Panasonic Corp.
Yet the greatest challenge may not be technological. It could be marketing, as more than 10 dozen models fight over a sliver of market share.
"The question we’ve been asking ourselves is, ‘OK, if you’re going to launch in that clutter of 120 competitive products, what’s going to allow somebody to want to even consider your product?” Thai-Tang said, noting that the "provocative” design for the small electric SUV Ford’s planning may help differentiate it in a crowded field. "But not in a weird science-fair kind of provocative” way, he added.
While the math doesn’t yet add up for the glut of models chasing the tiny market for EVs, no automaker wants to be caught short when the switch gets flipped to battery power.
Source: Bloomberg
Electric cars—which today comprise only 1 percent of auto sales worldwide, and even less in the U.S.—will account for just 2.4 percent of U.S. demand and less than 10 percent globally by 2025, according to researcher LMC Automotive. But while consumer appetite slogs along, carmakers are still planning a tidal wave of battery-powered models that may find interested buyers few and far between.
"When you hear people talk about the tipping point, it’s really that they’re counting the number of product offerings,” Hau Thai-Tang, Ford Motor Co.’s global head of product development and purchasing, said of electric cars. "Nobody can cite what the actual demand will be.”
With battery costs declining rapidly and Tesla Inc.’s stock price on a tear, automakers are rushing to get in the game with their own all-electric models. General Motors Co. has announced plans to roll out 20 models by 2023, while Ford and Volkswagen AG are among those planning new electric lineups in China. Toyota Motor Corp. this week promised more than 10 electric models by early next decade.
"There’s certainly more hype than real growth in sales volume,” Jeff Schuster, senior vice president of forecasting for LMC, said in an interview. "How long have we been talking about EVs? We’re now finally seeing them in numbers, but the sales numbers are not taking over the industry by any means.”
It’s a mix of panic and promise that’s driving automakers to set ambitious goals to catch up to perceived market leaders like Tesla and GM, which each are enjoying a run-up in their stock prices this year.
There’s a growing optimism that the electric market is ready for liftoff, based in part on improvements in battery chemistry and costs and in part on the Field of Dreams adage: If you build it, they will come.
Industry executives convinced drivers will abruptly exit their internal combustion engine vehicles in favor of electrics may find themselves too overzealous, with LMC forecasting gasoline-powered engines will still make up about 85 percent of U.S. new car sales in 2025. But that shift could accelerate as electrified vehicles reach price parity with gasoline-powered cars, which Bloomberg New Energy Finance predicts will happen by 2029 or sooner for most models.
Rick Haas, former chief engineer of the Tesla Model S who now runs the North American operations of Indian automaker Mahindra & Mahindra, counts himself in the optimistic camp. Although today’s drivers aren’t too excited about battery cars, tougher regulations in places like China and the power-thirsty needs of driverless features could help speed the transition along.
"Things move about 10 times the speed that they moved 25 years ago,” Haas said. "As soon as the ball crests the hill and everyone thinks, ‘I’m comfortable with this,’ then the whole industry will flip.”
127 electric models will be introduced in the next five years and no automaker wants to be left behind to sell the 21st Century version of the buggy whip: a car that runs on fossil fuel.
Ford does not want to be one of the casualties. Thai-Tang said his engineers and suppliers are working hard on developing a cost-efficient battery that is better and cheaper than today’s lithium-ion versions. Toyota is working on energy-dense solid-state batteries, seen as the next frontier in electric power, with Panasonic Corp.
Yet the greatest challenge may not be technological. It could be marketing, as more than 10 dozen models fight over a sliver of market share.
"The question we’ve been asking ourselves is, ‘OK, if you’re going to launch in that clutter of 120 competitive products, what’s going to allow somebody to want to even consider your product?” Thai-Tang said, noting that the "provocative” design for the small electric SUV Ford’s planning may help differentiate it in a crowded field. "But not in a weird science-fair kind of provocative” way, he added.
While the math doesn’t yet add up for the glut of models chasing the tiny market for EVs, no automaker wants to be caught short when the switch gets flipped to battery power.
Source: Bloomberg
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