It appears that the EV industry has been going through evolution instead of a revolution. Expectations were that the EV sales would skyrocket and supersede the sales of ICE cars. However, what they have been experiencing is stability and reliability rather than scrapping the ICE cars off the market.
The EV industry is focusing on cutting battery costs and growing the mileage range during this evolution. After experiencing tangible results in these aspects, they will then focus on the profitability of the EVs.
Many EV companies are yet to experience profitability, given that Tesla is the only most pronounced company in the industry. However, the other companies are to reveal if they are making profits since most are transitioning to this new technology. This statement is what the Lux Research reports.
The study indicates that the EV sector is overly focused on battery manufacturing costs and prolonging the mileage range; therefore, spiraling up the sales. Lux Research analysts are advising the EV makers to delve into the profitability and efficiency of the EVs. The analysts say that this move will popularize the EVs, and they can enjoy half of the market share around 2035 or 2040.
However, the limitation of the report is that it only covers a representative sample of the cars that it was researching and not all the EVs in the global market. One of the problems with this mentality is that there are differences in profitability rates among the models.
The Lux Research analysts submit that if the above limitation is the real market picture, then Tesla is the most profitable EV automaker in the industry. This concept is different from GM, which has been losing cash on the Chevy Bolt. The firm admits that profitability is only achievable once factors like mileage range and battery technology meet consumer needs. Additionally, there must be charging stations after a considerable distance that the Evs can cover without running out of power.
Another crucial factor that determines the profitability of the EV industry is subsidies. Critics argue that giving out grants to the EV industry is troubling the taxpayer when this industry can manage to grow on itself. However, subsidies on Evs will be available for the coming months in the two global EV markets, Europe, and China. For instance, China insists it will extend the subsidies on EVs up to 2022. European countries like Germany and France are escalating their subsidies on Evs to increase the market penetration of the product and thereby swiftly transit to renewable energy.
Finally, EV sales will drop this year globally due to the coronavirus pandemic’s impact on the economy. The primary impediments to the full inception of EVs globally are the range of anxiety and the charge cycle period.