By Nassim Terzout

The COVID-19 pandemic was not the only unforeseen change that occurred in 2020. An automotive industry previously unknown to many investors emerged out of thin air raking in over half a trillion dollars in valuation. Electric vehicle makers such as Nikola, Workhorse, and NIO have grown exponentially, with Tesla leading to become the largest automaker in the world. Best summed up by CNBC correspondent Michelle Gao, “Tesla’s stock has already risen more than 400% this year, but CEO Elon Musk said he thinks the company will be worth more in five years” [1]. It cannot be denied that electric vehicles have grown to be one of the hottest trends of 2020, but many investors are skeptical of these companies and question their ability to implement their projects successfully in society.

To understand the current hype behind electric vehicles, it is important to understand their foundation and how they can serve as an asset to the renewable energy industry. When driven, electric vehicles do not produce tailpipe emissions [3] as they are battery powered. This means that these vehicles can be recharged using clean electricity and used to battle today’s growing global warming crisis. Contrarily, traditional vehicles burn fossil fuels to generate power and as a result of their design release emissions. These vehicles have been in circulation for much longer and are more accessible to consumers today. Currently, electric vehicles represent only 1% to 3% of all passenger cars [2] and their manufacturers are rapidly battling problems to gain more of the market share.

So what kinds of problems are we talking about? The sudden growth in the electric vehicle industry has uncovered many problems for these new companies. From a consumer standpoint, the greatest fears consist of limited driving range, high costs, battery issues, and a spotty charging infrastructure [2]. Most battery-powered cars are expected to drive an average distance of between 100 to 160 kilometres [3] on a full charge, but this does not account for idling and other required uses of energy in the vehicle. Furthermore, charging stations are nowhere near as common as gas stations, which could serve as a drawback to consumers. These problems all stem from the battery technology these cars use; another major hurdle EVs face is their higher cost compared to traditional cars. As uncovered by Musk at Tesla’s quarter 2 earning reports, manufacturers are struggling to acquire enough lithium to meet the demand for their vehicles. As a result, electric vehicles are priced higher to meet the demand and this serves as an obstacle to making electric vehicles for everyone. Most consumers also consider installing an in-house charger which is of additional cost. The upfront costs and uncertainty in battery reliability present many issues that discourage consumers. With time and research, electric vehicles should be expected to be more accessible and cheaper than traditional vehicles.

So how long should we wait? Although electric vehicle companies have financially grown to overtake many traditional automakers, their lack of current assets suggests they have a long way to go. Toyota, for instance, produces millions of cars in contrast to Tesla and has been established for decades. Many analysts believe that combustion engines will perish within the next 50 years as fossil fuels are expended. While this occurs, electric vehicles will undergo research and development and uncover more efficient implementations in society. It is anyone’s guess how soon electric vehicles are going to overtake the market. Some believe it will never happen, whereas others believe it is already happening. Regardless, it will be interesting to see where this journey takes us and how engineers will go about revolutionizing energy in transportation for the better.

References

[1] Gao, M. (2020, September 28). Elon Musk: Tesla may be overvalued today, but I think it'll be worth more in 5 years. Retrieved October 19, 2020, from https://www.cnbc.com/2020/09/28/musk-tesla-may-be-overvalued-today-but-i-think-itll-be-worth-more-in-5-years.html

[2] Electric Cars Gain Traction, But Challenges Remain. (2019, May 01). Retrieved October 19, 2020, from https://semiengineering.com/electric-cars-gain-traction-but-challenges-remain/

[3] How Do Battery Electric Cars Work? (n.d.). Retrieved October 19, 2020, from https://www.ucsusa.org/resources/how-do-battery-electric-cars-work

Driving Positive Change with Electric Cars