Boring Automakers Could Outpace EV Startups
Legacy automakers are quietly capturing market share as they ramp up electric vehicle production, challenging the dominance of high-profile EV startups. While companies like Tesla and Rivian receive most of the attention, established manufacturers are leveraging their existing supply chains and infrastructure to deliver affordable electric options to consumers. This shift in the automotive setting suggests that the race for electric vehicle dominance may be won not by the flashiest newcomers, but by those with the resources and production capacity to scale rapidly.
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Building the Battery Infrastructure
Volkswagen Group has made significant strides in electrifying its portfolio following the emissions scandal in 2015. The company doubled its EV sales last year, achieving the second-largest market share after Tesla. In 2021, the parent company sold 452,900 battery electric vehicles worldwide across all its brands. Although this represents just over 5% of its global deliveries, Volkswagen plans to rapidly shift this ratio in favor of EVs. The company aims for half of its car sales to be electric by 2030 and hopes to phase out combustion engines entirely by 2040. To support this transition, Volkswagen is building six battery factories in Europe with a total capacity of 40 gigawatt-hours. This figure exceeds the 35 gigawatt-hours that Tesla boasts at its flagship Gigafactory in Nevada.
General Motors has faced challenges recently, including the pause and recall of its Chevrolet Bolt vehicles due to battery safety concerns. The company delivered only 26 EVs in the last quarter of 2021, a figure that drew public scrutiny. Despite these setbacks, GM sold nearly 25,000 EVs last year, primarily the Chevrolet Bolt. The company is determined to play catchup and has ambitious plans for the future. Toyota, the world’s largest automaker, is preparing to launch its first widely available EV, the bZ4X, in partnership with Subaru. Toyota has earmarked $35 billion to launch thirty new battery electric models across its Toyota and Lexus brands by the end of the decade, with a target of selling 3.5 million BEVs annually by 2035. The company recently announced its first North American battery production plant in North Carolina, which will have the capacity to produce batteries for 800,000 vehicles annually.
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Hyundai is also aggressively expanding its electric offerings. The company sold more than 120,000 fully electric cars worldwide last year and plans to capture 7% of the global EV market by 2030. Hyundai aims to introduce 17 new electric models across its Hyundai and Genesis brands and is constructing EV production facilities in the United States and Indonesia. The Ioniq 5, the company’s most popular EV, recently won the top award at the 2022 World Car Awards. U.S customers can purchase the compact SUV for $43,650, a price point that is 10% lower than the most affordable Tesla vehicle.
Price and Production Targets
Ford Motor Company is making a significant push into the electric truck market with the release of the F-150 Lightning. The company decided to electrify its best-selling pickup truck and priced the base version at less than $40,000. This pricing strategy positions the F-150 Lightning as a direct competitor to Tesla’s Cybertruck and Rivian’s R1T, which starts at $67,500. Ford sold 27,140 of its all-electric Mustang Mach-E vehicles in 2021, placing it in second place after Tesla in terms of U.S. EV sales. The company recently had to shut down new orders for the model due to overwhelming demand. Ford plans to produce at least two million EVs a year globally by 2026 and has boosted its EV spending to $50 billion over the next four years.
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Nissan remains a key player in the electric vehicle space, having debuted the Leaf in 2010 and sold more than half a million units in the first ten years. The company currently offers the cheapest EV in the U.S. market, with the current model year priced at $27,400. While the Leaf’s popularity has faltered in recent years, Nissan is supplementing the model with a new crossover SUV electric vehicle, the Ariya, which will start shipping by fall of this year. The company plans to add 23 new EV and plug-in hybrid models to its lineup by 2030 and has committed more than $15 billion to its electric business over the next five years. Nissan aims for 40% of its U.S. and 75% of its European sales to be electric by the end of the decade.
