Sales of Electronic Vehicles [EV] soared in United States, Europe and China last year. On the other hand, the market graph for fossil fuel vehicles remained comparatively flat.
Demand for electric cars is so strong that manufacturers are requiring buyers to put down deposits months in advance. And some models are effectively sold out for the next two years!
In order to make the shift to electric vehicles, the auto industry in America plans to invest half a trillion dollar over the next five years, according to Wedbush Securities, an investment firm.
As the demand is rising, the manufacturers like Image Ford have planned to double the production. Companies are planning more than a dozen new electric car and battery factories just in the United States.
“It’s one of the biggest industrial transformations probably in the history of capitalism,” Scott Keogh, chief executive of Volkswagen Group of America, said in an interview. “The investments are massive, and the mission is massive.”
Affluent consumers are increasingly turning electric as harsh weather makes the disastrous implications of climate change more real, and word gets around that electric cars are easy to maintain, cheap to refuel, and pleasant to drive.
Mercedes-Benz sold nearly 100,000 electric cars and vans in 2021, a 90 percent increase from the previous year.
China has gained dominance in this industry with 53% of the global sales of electric vehicles. Chinese companies like SAIC, which owns the British MG brand, are using the technological shift to enter Europe and other markets.
EVs in India
Like the other countries, India has also seen a surge in the sales of EV, though the surge has been in the two-wheeler and three-wheeler segment.
14,978 electric vehicles were registered in India in 2020. Last year 42,055 electric vehicles were registered. According to media report, the overall EV sales in December 2021 clocked 50,866 units, recording a 240 per cent jump.
India favoured two-wheelers and passenger three-wheeler EVs, rather than electric cars, which are only 5 percent of the total sales.
The maximum numbers of electric vehicles were registered in Uttar Pradesh in December 2021.
The top five positions are held by – Maharashtra (13 per cent), Karnataka (nine per cent), Rajasthan (eight per cent) and Delhi (seven per cent).
Ola Electric sold e-scooters worth 1,100 crores in just two days in India. At a cost of about 1.3 lakh per scooter, this translates to a sale of approximately 85,000 e-scooters.
In December, battery-powered cars outsold diesel cars in Europe for the first time. In 18 countries, including Britain, more than 20 percent of new cars were electric, according to Matthias Schmidt, an independent analyst in Berlin.
Why turning to EVs make good sense
In the 21st century, the issue of Climate change has topped the list of many national and international discussions.
The replacement of fossil fuel guzzling automobiles with electric vehicles will slow down global warming, and lack of tailpipe emissions will improve air quality.
Ford will soon start selling the Lightning, an electric version of the popular F-150 pickup truck. It initially planned to make 75,000 units a year. But demand has been so strong that the company is racing to double production of the Lightning, which starts at $40,000 and runs up to more than $90,000.
Electric automobiles are designed to reduce tailpipe emissions, which is a major source of carbon dioxide and other pollutants that contribute to smog.
Electric vehicles are already competitive on price and could save buyers thousands on maintenance and petrol. (Electric cars do not need oil changes, and electricity is generally cheaper per kilometre than petrol or diesel.)
Government incentives for electric cars is also one of the reasons behind the increase.
The cost of technology has dropped considerably, with battery costs around 20 percent lower than they were five years ago.
The speed bumps on the road to Electronic Vehicles
There are certain challenges that EV owners face.
One such issue is the lack of places to plug in electric cars. This makes it less appealing to those who drive long distances. In US there are around 50,000 public charging stations.
In India, there are only about 1,028 public electric vehicle charging stations installed throughout the country.
India will need more than 400,000 charging stations, for the 2 million-plus electric vehicles that could be on its roads by 2026, say observers.
The new technology will mean that the old will become obsolete. Makers of mufflers, fuel injection systems and other parts could go out of business, leaving many workers jobless.
The transition to EVs may give a harsh blow to the people employed in the car manufacturing and servicing industry. Producing electric cars will require fewer workers because the electronic cars have fewer components.
Prices of the material used in making batteries are also be a nerve-racking issue. Soon these ingredients, like lithium, nickel and cobalt could become more sought after than oil. This will eventually drive up the cost of EVs.
Electric vehicles wouldn’t take off until they cost the same as gasoline models — a milestone that is still a few years away. There have to be for moderately priced electric cars that most people can afford.
For a long time Tesla is known to be the face of EVs. Led by Elon Musk, the company delivered nearly a million cars in 2021, a 90 percent increase from 2020.
Wall Street values Tesla at about $1 trillion, more than 10 times as much as General Motors. That means Tesla, which is building factories in Texas and Germany, can easily expand.
“At the rate it’s growing now, it will be bigger than G.M. in five years,” said John Casesa, a former Ford executive.
All said and done, the makers of small machine parts for the petrol and diesel run vehicles should be aware of the changing times, and start looking ahead to meet the new bend in the automobile journey!