Electric vehicles could be the next big step towards reducing the carbon footprint on our planet. That is not to say that they are yet to be introduced into the world. They are already here, with leading companies like Tesla, General Motors, Rivian, Nio and more already making big strides in the industry. However, the transition to their widespread use might take time due to a number of reasons.
Whether you are planning on buying them or have already come across them, one thing is for sure: they will and should eventually replace fuel-based vehicles in the near future.
Before we jump into how electric cars might impact the current industry or what the top companies in the electric car industry are, let us first understand the challenges the industry is facing and the ones it might face once it rolls out.
- Batteries: To make electric vehicles feasible batteries that can store more energy is a must. On average, an electric car should be able to support at least 50-100 km of journey in one charge, and for that to happen we need better batteries that have more storage capacity and at the same time are compact enough to fit into a moving car. Although there is increasing development in this area, it so happens that such batteries require costly materials and can make electric cars unaffordable to the general public.
- Charging points: Let’s say you actually go out and buy an electric vehicle for yourself, the first thing that could come to your mind is, “How do I recharge the battery?”. It is not like fuel-based cars where you come across a gas station every few miles and don’t have to worry about running out of energy.
This problem has two solutions: installing a charging point at your home itself or waiting for a widespread introduction of charging points across the city. While the former suffers from the problem that it might not be feasible in shared housing or in apartments, the latter is economically possible only after a large number of people actually buy electric cars. And for that to happen there should be charging points in the first place, making it a catch-22 situation.
- Market integrity: It is one thing to start a new company and an entirely different thing to start a new industry. For the electric vehicle industry to prosper there is a requirement for greater integrity and connections between the various players of the industry. For instance, the industry requires a greater connection between the manufacturers, dealers, and many other firms providing ancillary services to roll out successfully.
- Finance: There are many players who are willing to enter the industry but lack sufficient financing to do so. Banks are not fully convinced about investing in the industry at such an early stage.
- Acceptance: Even if everything else works out what guarantee is there that people will readily accept the industry? Why would a person give away a newly bought fuel-based car for an expensive electric car? Or what personal incentive does a person have to shift to electric cars.?
Like the saying “ Every problem has a solution”, I am sure the electric vehicle industry can overcome its challenges with proper strategy and government support.
- The problem of high costs can be tackled to some extent by producing more and using economies of large scale.
- Governments can facilitate the transition to EVs by financially supporting the establishment of charging points. Further governments can even provide incentives to fuel-based car manufacturers to diversify their production, especially because such companies generally have a large number of resources at their disposal.
- Coming to finance and market integrity, once governments start showing interest money will automatically start rolling out. Finally, the problem of acceptance can be tackled using the right marketing strategy or introducing exchange schemes where customers can exchange their fuel-based cars for electric-cars by only paying the difference.
These are just a few solutions to challenges faced by the industry, I am sure there are many more. However, one point to be noted is that things are much easier said than done, and actual execution might require a lot more integrity, support and patience.
What it all means to current manufacturers :
A prudent organisation is always on the lookout for new technologies and innovations that require quick adoption to stay in business. The same goes with electric vehicles, once the industry starts rolling out traditional car manufacturers would start diversifying their business to accommodate the change.
Coming to oil-based economies, mainly in the middle east, a major chunk of their business may be hurt if there is a wide-spread usage of electric cars. However, countries like Saudi Arabia are already on the lookout for such a change and are quickly trying to reduce their dependence on oil- Saudi’s Vision 2030 is a strategic framework introduced to reduce its dependency on oil, by investing more in other sectors and diversifying its economy.
Now, let us look at a few impressive electric vehicle companies in the world:
Founded: January 2003
Founders: Elon Musk, JB Straubel, Martin Eberhard and Marc Tarpenning
Funds raised: US $ 20.2 billion
About Tesla: Tesla is probably one of the most well known electric vehicle companies in the world. It was founded with the vision to facilitate the transition to electric mobility with its full-range electric cars.
Currently, Tesla offers four main models of electric cars: Model S, Model 3, Model X and Model Y. Further Tesla also offers the construction of solar roofs and solar panels.
Founder: Robert J.Scaringe
Funds raised: US $ 8.2 billion
About Rivian: Rivian is a Michigan, United States, based EV manufacturer that runs with the strong motto of fundamentally changing the mindset of people and the industry with its innovative products and solutions.
Founded: November 2014
Founders: William Li, Jack Cheng and Lihong Qin
Funds raised: US $ 5.4 billion
About NIO: NIO is a Chinese Electric Vehicle (EV) manufacturer that seeks to lead the way for smart, electric and autonomous vehicles. It believes that the automotive industry is on the cusp of a major change and seeks to change the entire car ownership experience for its customers in a positive manner.
Founder: Trevor Milton
Funds raised: US $ 2.5 billion
About Nikola Motors: Nikola Motors is an Arizona, United States, based company that manufactures heavy-duty transport trucks that operate on hybrid hydrogen-electric powertrains.
It states its mission as follows- “ To transform the transportation industry while improving our employees’ lives and leaving the world a better place.”
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