Across the automotive industry, legacy car makers and manufacturers are charging up their performance and electrifying their vehicle line-ups as they gear momentum for the mainstream endorsement of electric vehicles (EVs) and battery-electric vehicles (BEVs) across growing consumer markets.
After seeing a banner year of performance in 2022, with roughly 10% of all new vehicles sales being electric, up from the recorded 8.3% in 2021, traditional automakers are jumping on the bandwagon, hoping to captivate established and emerging markets with their own line of EVs.
To speed things up, governments and automakers have set out energetic goals over the next several years.
Across several markets, including the United States, Europe, and China, EV adoption has seen steady growth over the last several years, as new sustainable policies and government subsidies are helping fuel the next generation of the motor vehicle industry.
President Biden’s commitment to a more sustainable America under the Inflation Reduction Act (IRA) has led to domestic legacy car makers such as Ford and General Motors establishing ambitious investment deals over the next several years for increased automotive sales.
States including California and New York have set out even more aggressive carbon-neutral goals, as the federal government looks to power up more than 500,000 new charging points across the country, and make half of all new vehicles sold electric by 2030.
In an earlier announcement this year, the European Parliament passed a new law that will ban the sale of new internal combustion engine (ICE) vehicles across the 27-nation bloc by 2035.
China has been promoting electric car adoption since 2009 and started offering would-be buyers subsidies, which later started phasing out in 2020. The country has pledged to achieve carbon neutrality before 2060 and has an ambitious goal to make up 40% of all new cars electric by 2030.
As the global auto industry is becoming increasingly electric, due to widespread consumer demand, new technology, government subsidies, and growing competition - not all car makers are following the same timeline, and some executives remain hesitant to completely electrify their vehicle lineups.
As one of America’s largest car makers, GM (NYSE:GM) has set some of the most aggressive EV goals across the domestic industry.
In an announcement last year, General Motors CEO Mary Barra said that the company plans to spend more than $35 billion by 2025 to design and manufacture electric vehicles.
As part of their goals, the Detroit-based legacy automaker will invest roughly $7 billion in its home state, Michigan to build a new battery plant and update existing factories to make electric trucks. The investment comes with the possibility of creating 4,000 new jobs and has been earmarked as one of the largest one-time investments in the development of EVs.
The market has grown fiercely competitive, with other names such as Ford, Tesla, Rivian, and Lucid Group all now competing to scoop the biggest market share. GM announced that it plans to deliver its F-150 EV by spring this year, and start working on an all-electric Equinox Crossover that is set to have a sticker price of $30,000.
Domestic manufacturer Ford (NYSE:F) has set out goals to make half of all new vehicles it produces and sell electric by 2030. Company CEO Jim Farley said in a media statement last year that EV adoption is happening a lot faster and more rapidly than what the company initially predicted.
This doesn’t mean that the company is behind schedule in terms of its EV goals. The legacy maker wants to produce around 600,000 new EVs by the end of 2023 and hopes to release at least 270,00 Mach Es per year in North America, Europe, and China by next year.
Several new milestones will see the company rapidly overhauling some of its factories across the country if they hope to achieve its ambitious goals.
While there are some major infrastructure complications the company will need to overcome in the next several years, Farley said that he’s a big believer Ford will be able to make a full transition to EVs within the next decade.
As the world’s largest motor company, Toyota (NYSE:TM) has planned to introduce a range of new EVs and BEVs in the coming years but remains on the fence about solely adopting electric power.
Company president and CEO Akio Toyoda has called for more diversity in terms of automotive fuel, hoping to promote the important role hydrogen and biofuels can play in the automotive industry.
Instead of being steadfast in completely electrifying its vehicle lineup, Toyoda and Toyota are aiming to become “a department store offering every available powertrain.” He further said that he doubts the company will ever go fully electric and that there should be more diversified options available for consumers.
Nonetheless, the company expects sales for its all-electric vehicles to reach 3.5 million by 2030 and aims to introduce at least 30 new EV models before then.
Unlike other legacy makers, Toyota has been in the EV game for long enough with its hybrid vehicles, including the Prius, the hydrogen-powered Mirai, and its first BEV model, the bZ4X which was launched in 2022.
The Volkswagen (OTCMKTS:VLKAF) group is also not holding back on its plans to make 80% of its fleet fully electric by 2030. This comes as the new CEO of Volkswagen Group, Oliver Blume, a long-standing supporter of e-mobility, aims to take both the company and the European automotive industry into the next generation of EV adoption.
As one of Europe’s largest car makers, the company has set out some ambitious goals, committing to design and manufacture its last ICE model by 2026.
Aside from this, the company will continue to sell gas-powered cars afterward and is aiming for net zero emissions by 2040. Within the coming decade, VW further aims for 70% of its European fleet to be electric, and half of its U.S. and Chinese powertrains electric operated by as early as 2030.
With Blume at the helm of the company, and new laws passed by the EU parliament, it’s possible that the company could achieve these goals, but challenges such as the bloc’s energy crisis, labor shortages, and increasing prices could put a damper on their plans.
The parent company of Dodge, Jeep, and Chrysler, among other household names, is also on a mission to make its entire fleet of powertrains electric by 2030 in the European market. Aside from these goals, the company has announced that in other larger markets such as the U.S., and Canada, it aims to have half of the new sales be EVs.
With several legacy car names in its portfolio, Stellantis (NYSE:STLA) holds a strong chip in the market, as it plans to offer more than 75 new EV models over the coming years. As part of its transition to an all-electric lineup, it hopes to sell roughly 5 million EVs annually worldwide by 2030.
The automaker has been investing a lot of resources to electrify its production lines for all 14 of its iconic brands. With a global team working on a range of innovative electric platforms, including energy storage, Stellantis is propelling itself toward mass electrification at a rapid pace.
German legacy car maker, BMW (OTCMKTS:BMWYY) has been on the fence recently on wide-scale EV production for its powertrains. In April 2022, company CEO Oliver Zipse said that although EVs and BEVs are growing more mainstream, automakers should be careful to not become too dependent on a select few markets by solely focusing on EVs.
Zipse said that there are still some markets across the world that are developing or slowly transitioning from combustion engines to electric cars, adding that these markets will continue to remain on fossil fuels for the next several years.
Despite the ambiguity, BMW does have an EV goal it hopes to achieve by 2030, looking to make half of the global sales electric by then. In the meantime, the company set an interim target, to sell at least 2 million new EVs by 2025.
Until now, the automaker has several high-end EV models available, including the BMW i7 xDrive60, BMW iX, BMW i4, BMW i4 M50, and the BMW iX3.
Another European contender that has set energetic goals for its drivetrains, Audi will look to end the development of new ICE models by the end of 2026 and completely shift its focus to full-electric vehicles.
Furthermore, the company aims to become fully electric after 2030, hoping to build and sell 100% EVs by the early 2030s.
Popular models, including its A3 and A4 range, will also become more carbon neutral and will be replaced by battery-powered A3 e-tron and A4 e-tron. Other high-end sedans such as the A5 and A6 models will follow a similar timeline, as the company makes the transition.
Other Automakers Joining The Transition
Other automakers throwing their hats in the ring include Hyundai (OTCMKTS:HYMTF), which plans to sell around 1.9 million new BEVs by 2030 and introduce 17 new EV models by the same time. Japanese car maker Mazda (OTCMKTS:MZDAF) has pledged to transition 25% of all new vehicles to be electric also by 2030, while Nissan (OTCMKTS:NSANY) wants to make at least 75% of all new powertrains electric across several markets, including Europe, Japan, and China by 20206.
Another legacy automaker, Volvo (OTCMKTS:VLVLY), has already been working towards e-mobility, introducing hybrid or electric motors in every new car that comes off its production line from 2019 onwards. Now the company is taking it another step further, pledging to make 50% of all new car sales electric by 2025, and aiming for full electrification by 2030.
Not Too Fast
Across the board, it’s looking to be a race against the clock for most automakers, as they rapidly adopt new technologies to introduce a range of EV models across some of the world’s largest electric car markets.
According to the McKinsey Center for Future Mobility, this year alone will see at least 500 new EV programs hitting the roads, marking the steady beginning of the end of the combustion engine in some parts of the world.
Although it’s looking to be yet another promising year and perhaps a decade for the EV industry, companies shouldn’t completely write off the combustion engine just yet. With several regions only now starting to adapt to the EV transition, there’s still a lot of work left before we could see electrification on a more global scale.
In some developing parts of the world, where ICE models still reign supreme, consumers will have a hard time adjusting to new technology if the infrastructure is not yet available.
Aside from the physical challenges, other problems including domestic sustainability goals could also further damper the rapidly expanding EV industry in these markets. Where consumers have less access to financial resources to purchase or import electric cars, companies could run themselves against the wall if they don’t aim to have a more diversified selection of vehicles for developing markets.
To Finish Up
It’s starting to look a lot more promising, and many remain hopeful that the future of the automotive industry will become fully, or even partially electric by the end of the decade. Now it’s simply a race against time to achieve these ambitious goals and to ensure that the market can promote more sustainable and diversified models to all drivers, and not just its already established markets.