The auto industry’s push into electric vehicles has gained traction this year with sales of these models growing at a faster clip than the broader U.S. car business.
While still a sliver of the overall market, sales of plug-in vehicles more than doubled in the first half of 2021 compared with last year, when the pandemic sapped sales. That far outpaced the 29% rise for total vehicle sales, according to research firm Wards Intelligence.
The biggest factor driving the gains was
continued dominance in electrics. Tesla’s U.S. sales rose 78% through June this year, according to an estimate from research firm Motor Intelligence. The increase was helped by Tesla’s Model Y crossover SUV, which has quickly become the company’s top seller since being introduced last year. Tesla is scheduled to report second-quarter financial results Monday.
Other new offerings from traditional auto makers, such as
Ford Motor Co.
’s Mustang Mach-E SUV and
ID.4, also helped push sales of plug-in electric vehicles to over 3% of the total U.S. market in May and June, the highest ever recorded, according to industry data.
Auto companies collectively are spending $330 billion over the next five years to bring more plug-in models to showrooms, according to consulting firm AlixPartners LLP.
Now, the big question looming over the car business is whether consumers are ready to buy them.
Longer driving ranges and a wider variety of body styles and price points are helping garner interest in plug-in cars from more car shoppers, dealers and analysts say. But hurdles remain, including higher sticker prices and a deficit of places to charge them.
Auto executives in recent months have said they believe consumer interest in the technology is rising and should help speed the transition.
In the U.S. market—which lags behind Europe and China in electric-vehicle adoption—executives also are encouraged by the Biden administration’s plans to support plug-in cars through charging-station investment and consumer incentives.
chief executive of global auto maker
NV, said the pace at which drivers make the switch to electrics will depend on regulations and consumer awareness.
“The more the public opinion becomes sensitive to the global-warming issue and how to fix it, the more we can expect a very strong acceleration,” Mr. Tavares said to journalists this week.
Stellantis, which owns Jeep, Ram and other auto brands, recently joined other global auto makers in outlining big investment plans for electric cars and battery plants.
General Motors Co.
, Ford and
each have said they are earmarking tens of billions of dollars on the transition during this decade.
said it is preparing to sell only electrics by 2030 but would respond to market demands.
“The EV shift is picking up speed, especially in the luxury segment,”
Republican Senator Susan Collins of Maine spoke about funding for a bipartisan infrastructure deal, including proposed fees for electric vehicle owners for acting as “free riders” by not paying a gas tax.
“There would be a provision for electric vehicles to pay their fair share of using our roads and bridges. Right now, they are literally free riders because they’re not paying any gas tax,” Collins said during an appearance on CBS News’ Face the Nation Sunday.
Newsweek reached out to Collins for clarification on the proposed fees, whether intending additional fees or using the ones already in existence for funding.
Collins’ comments have received criticism on Twitter, with some users accusing Collins of not representing citizens’ best interests, and some electric vehicle owners complaining about fees already in place.
Vox journalist Aaron Rupar called the proposal “completely absurd” in a tweet.
Another user wrote: “@SenatorCollins Why would you have fees on electric vehicles? Why are Republicans always trying to drag us backwards? Fix the tax system. Tax the multi-billionaires. Jesus Christ, we’re sick of this s**t. And yes, people, I’m embarrassed to say it’s true, Collins is my senator.”
The National Conference of State Legislatures (NCSL) website details fees already imposed by 28 states for electric vehicle users to make up for a lack of revenue in gas tax. The special registration fees are typically in addition to traditional registration fees, and 14 states have imposed a fee for plug-in hybrid vehicles that operate on both gas and electricity.
The annual fees for an electric vehicle range from $50 in Hawaii and Colorado to $225 in Washington. In 2019, Alabama, Arkansas, Ohio and Wyoming enacted bills that set or increased fees for electric vehicles to $200 a year, the NCSL reported.
Fees for hybrid vehicles that use both electricity and gas were increased from $32 to $48.75 in Iowa this year. While South Carolina does not have an annual fee, electric vehicles require a $120 fee and hybrid vehicles a $60 fee every two years.
Illinois proposed increasing the electric vehicle fee to $1,000 in 2019, when the fee had previously been an additional $17.50 on top of regular registration fees, the Chicago Tribune reported. It was ultimately settled at $258 a year, which was a $100 fee on top of the $158 regular registration fee.
The registration fees were created to make up for a lack of revenue from gas taxation, which helps pay for highway repairs and improvements. In 2019 and 2020, at least 19 states considered legislation that would add road user charges as an additional means of collecting infrastructure funding from electric vehicle owners, the NCSL reported.
Regulatory pressures on internal combustion engines (ICEs), combined with technological improvements in electric powertrains and batteries, are driving a surge of demand for electric vehicles (EVs). Most incumbent car manufacturers are rolling out models, joined by new entrants without ICE legacies. Worldwide sales of pure battery EVs (excluding hybrids) grew by approximately 45 percent in 2016.
With EVs becoming mass-market products, it is time for a detailed understanding of technology trends. In collaboration with A2Mac1, a provider of automotive benchmarking services, we conducted a large-scale benchmarking of first- and second-generation EV models, which included physically disassembling ten EV models: the 2011 Nissan LEAF, the 2013 Volkswagen e-up!, the 2013 Tesla Model S 60, the 2014 Chevrolet Spark, the 2014 BMW i3, the 2015 Volkswagen e-Golf, the 2015 BYD e6, the 2017 Nissan LEAF, the 2017 Chevrolet Bolt, and the 2017 Opel Ampera-e.
Together, these models account for about 40 percent of all pure-battery EVs ever produced. In addition to the ten torn-down vehicles, we analyzed publicly available information on additional vehicles and consulted independent subject-matter experts. The resulting analysis shows that successfully producing EVs requires radically different thinking. We identified five key insights:
Want a high-performing electric vehicle? Build a native platform
The benchmarking shows a clear gap in driving range and interior space between models with native EV platforms and those based on ICE. Native EVs optimize battery packaging; non-native EVs force the battery into the awkward footprint of the ICE platform, which limits the realized energy capacity. The native EV battery pack, by contrast, can take a simple, rectangular shape, giving native EVs up to twice the range—over 300 kilometers per charge and up to approximately 400 kilometers for the best performers, according to the Environmental Protection Agency—without forcing up the price (Exhibit 1). In addition, native EVs achieve a larger interior space (up to 10 percent by regression line) for the same wheelbase compared with not only non-native counterparts, but also standard ICE vehicles in the same segment.
There’s no convergence yet on core EV powertrain design
The benchmarking included a teardown of the battery, the battery cells, and the thermal-management system. We found three battery-cell designs with different geometries (cylindrical, prismatic, and pouch), along with multiple chemistries. With each design having clear advantages and disadvantages, there is no winner on overall performance for mass-market EVs, as our benchmarking also revealed similar energy density increases of more than 30 percent over a period of seven years (2011 to 2018) across all designs. We also found a large variance in the design approach for thermal management with four battery-cooling solutions: passive (natural air cooling), active combined with powertrain, active but stand-alone dedicated to the battery, and active combined with the air-conditioning circuit. We also
has big electric-vehicle ambitions, and Wall Street appears to be impressed.
“GM comes out swinging against Tesla,” Wedbush analyst Dan Ives wrote in a Wednesday evening research report, following the company’s electric-vehicle technology presentation near Detroit earlier in the day.
(ticker: TSLA) stock but not General Motors (GM). He was interested in what the state of EV technology is at a traditional auto maker that predominantly builds gasoline-powered vehicles. “We believe the event was a clear shot across the bow against [Elon] Musk and Tesla, which continues to lead the EV landscape by a clear margin.”
Even though Ives thinks Tesla is in the lead, he said Musk’s company has to take GM “seriously in this EV arms race.”
GM CEO Mary Barra said Wednesday that “from 2020 to 2025, we will allocate more than $20 billion of capital and engineering resources to our EV and [autonomous vehicle] programs. “Our investments are delivering real results and as you will see here today, they will dramatically change the future of this company and of our industry.”
GM wants to sell 1 million electric vehicles annually by the middle of the 2030s. It should be noted that Tesla plans to sell 500,000 electric vehicles in 2020. That’s part of the lead Ives mentioned.
“GM’s EV day should help show investors that GM is serious about decarbonization and has a strong plan,” RBC analyst Joe Spak wrote in a Thursday research report. He noted that GM is planning to offer 20 battery-powered models by 2023. Spak is a GM bull, rating shares the equivalent of Buy. His price target is $49 for GM stock. Spak is also a Telsa skeptic. He ratse Tesla stock the equivalent of Sell and has a $530 price target for shares.
J.P. Morgan analyst Ryan Brinkman has the same rating structure on the stocks—buy GM, sell Tesla. “GM showcased its work on a next generation of batteries it calls Ultium which possess performance characteristics when mated to its new drive units that we estimate are at least on par with or even exceed that of the most advanced competition,” he wrote in a Thursday research report.
Brinkman noted that GM says its batteries can travel up to 400 miles on a charge without compromising performance, such as rapid acceleration. Telsa’s base Model 3 will go about 320 miles on one charge. That is one data point in favor of GM, but apples to apple comparisons are difficult. Factors such as how many battery cells are included in a car’s battery pack isn’t known. EVs, in theory, can increase range by adding battery cells. That, of course, adds cost and weight.
“GM made a compelling presentation that it will be among the leaders globally in electric vehicles…and made a compelling case that along with its partner LG Chem, its battery science was at the leading edge,” Benchmark analyst Mike Ward said in an