The EV Market Will Roll Forward, But Expect a Bumpy Ride

How can a technology that experts around the world believe will lose money for years be the future of an industry? (If you immediately thought of Amazon as the answer, you’ve found the outlier we’ve chosen to ignore.) This is the challenge facing advocates of the widespread adoption of electric vehicles (EVs) in auto markets around the world. But, while consumers and auto manufacturers focus on the vehicles that will transform an industry whose sales approached 79 million cars worldwide in 2018, widely accessible charging infrastructure will be key to speeding the pathway for vehicle original equipment manufacturers (OEMs) and customers alike.

In September 2018, the U.S. auto market surpassed one million plug-in EV sales since 2010. Full-year totals reflected a 30% increase in overall sales, signifying the transition to EVs to have reached critical mass. In the past few months, OEMs have announced the addition of dozens of new models targeting families (SUVs), performances vehicles, and more. In fact, a recent report by AlixPartners finds “US$255 billion in research and development (R&D) and capital expenditures is being spent globally on EVs, and that some 207 electric models are set to hit the market by 2022.” OEMs are signaling — sometimes subtly, other times explicitly — that the days of building internal combustion engine (ICE) vehicles may be numbered.

The push to scale is critical to driving down component costs and eventually allow manufacturers to generate profits on EVs that for the most part have remained elusive. For example, electric car production currently carries the heavy cost of obtaining lithium-ion batteries. But with scale, and a greater range of plug-in EV options, the oft-overlooked challenge of how to provide power to propel the next generation of vehicles comes to the fore.

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