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- Scoop Market Mysteries 9-18-22 (EVs)
Scoop Market Mysteries 9-18-22 (EVs)
🔎 Market Mysteries: Are gas-powered vehicles becoming obsolete?
Market Mysteries of the week
Are gas-powered engines becoming obsolete?
Answer:
Not yet, but within the next decade, government, consumer, and industry forces will power a significant shift toward electric vehicles (EVs). With continued technological advancements, environmentally focused policy, and a growing concern for the environment, E
Vs will likely retire combustion engines within the next few decades.
Why are automakers going electric?
The automotive industry is under a lot of pressure to switch to EVs
through
and
. Major auto companies are planning for a future in which every car will be electric and have made ambitious pledges to transition to clean-burning models within the next two decades. This means designing and engineering more EV models, securing access to raw materials, and ramping up EV production.
Which automakers are going electric?
The most prominent players are driving the shift.
Tesla has been the most significant trailblazer
in demonstrating the demand for automakers to shift to electric vehicles, both from investors and consumers. In 2020, before the company had earned its first annual profit, investor demand for shares of Tesla
turned it into the most valuable automaker in the world,
worth
.
Tesla has also earned and maintained dominance in vehicle sales in the US.
Tesla owns
It is reportedly unable to keep up with demand, despite opening
. By 2030, Tesla will build up to 12 additional factories to deliver
- more than 20 times its current production.
General Motors has made one of the boldest commitments to an electric future
, aiming to sell
. To achieve this ambitious goal, GM has pledged
of investment and 60% of its research and development to the electric vehicle transition. The auto major has formed
to ramp up
required for their EV vehicles, install
, and more.
Though
Toyota
boasts many "electrified" vehicles and created the
, the Prius,
the world's biggest automobile producer has been slow to adopt full electrification
. As pressure from investors, consumers, and governments grew over the past two years, Toyota began to change its tone. The Japanese automaker launched its first fully battery-electric vehicle this year and
, roughly 14% of its annual revenue, into the electrification of its fleet. Toyota plans to roll out 30 new electric models and sell 3.5 million electric vehicles annually by the decade's end. Beyond battery-electric cars, Toyota is also developing
and exploring the viability of
.
America's second-biggest automaker,
Ford, has also made significant commitments to sustainability.
Ford expects 40-50% of its global vehicle sales to be
(with an expectation of producing over
by 2026). The Detroit automaker is
, a third of its annual revenue, to overhaul its technology and manufacturing facilities for electric vehicles over the next four years.
Ford's massive restructuring plan has shifted more resources to EVs
to get ahead of the competition, focusing initial efforts on an
and Mustang.
Volkswagen has invested heavily to rebrand itself as an environmentally conscious
company after its
controversy in 2016, which exposed fraudulent emissions reporting. With plans to launch approximately
, it has already surpassed Tesla in EV sales in some European markets.
But can this happen so quickly?
Transitioning to electric vehicles is crucial to reducing global emissions and slowing climate change. For the world to hit reach net zero emissions, approximately
This could be a challenge for many reasons, from resource availability to technology gaps.
Supply chain issues have already been a major delay to global automobile production.
Nearly every automaker, from
to
, faced supply chain issues this past year from the impacts of both covid lockdowns and the war in Ukraine. Automakers struggled to secure enough computer chips, battled congested transportation routes, and lacked sufficient staff to produce enough vehicles.
There's also a lot of new technology left to master
. Tesla has been plagued with tech issues and
.
within two months this year.
in recalling every Chevy Bolt model since 2016 due to battery fire risks.
The supply of raw materials for batteries could also be at risk
. There could be a
for batteries and electric vehicle tech, including aluminum, cobalt, iron, lead, lithium, manganese, and nickel. The world could face a
Automakers are already
refining to secure supply for their batteries. This is not only due to the
but also because lithium deposits are concentrated in areas of high water stress and are prone to droughts, such as China, Africa, Australia, and South America. We
how severe drought and water scarcity had affected major supply chains.
Lithium mines also have some of the poorest human rights records
, making them more difficult to source. Of the five major global lithium mining companies, only one has a publicly available human rights policy, and each has
against them.
Higher upfront costs for electric vehicles can also be a barrier
to access in the consumer market. The high price tags will require government intervention if countries hope to mainstream these cars. Governments worldwide have started incentivizing EV purchases through tax credits and rebates, such as in the US
. The IRA provides tax credits to purchasers, as we
Will the switch to EVs have a significant impact on climate change?
It all depends on the power source.
Electric vehicles have zero tailpipe emissions
, reducing the direct pollution into the air at the point of use. Switching to a battery-electric electric vehicle shifts the emissions burden up the power chain. The question then becomes, how are you charging your battery? If the electricity comes from a renewable source, that will nearly wipe out the vehicle's emissions, but if not, it gets complicated. When charged from the standard mixed-source power grid,
have demonstrated that
EVs have lower overall emissions than gas-powered vehicles
, driven mainly by the zero-tailpipe emissions.
The big challenge for our society is finding a way to meet our energy needs through renewable sources.
The burden of the shift will fall heavily on the energy industry. The automakers shifting to electric vehicles are focusing on reducing the emissions they have control over. If each consumer and industry does that, we can make a lot of progress.
💙 The Share Scoops Team
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