Buying a car will soon be like buying a phone, why your next car could be an EV

Buying a car will soon be like buying a phone. You click online, pay for the model and variant you want, and wait for delivery. But with electric vehicles (EVs), it's unlikely that if you book today, you'll get it tomorrow. The reason: there's already a long waiting list. 

The huge pent-up demand for products yet to hit the showrooms is one sign. Here's another: global sales of electric vehicles (EVs) went through the roof in 2021, with 6.75 million units sold, out of a total of 66.7 million. That's more than 10%. It's a milestone.

How close are we to the EV era? The numbers speak for themselves: As of December 2021, there were 200,000 reported pre-orders for the Ford F-150 EV truck known as “Lightning” (priced at about $40,000) pick-up truck. With its battery, it can also power homes for three days in case of blackouts.

Demand for even the high-end EVs, like the Porsche Taycan Cross Turismo (listed at $82,700) is so high the waitlist is reportedly six months long. That's to say nothing about the Cybertruck (base model at $39,900) with a reported 1.2 million pre-orders.

The numbers confirm one thing, i.e. the fact that certain models are effectively sold out even before they're actually made shows the presence of a huge demand. Let's outline the key drivers behind it:

COST 

The average cost of a lithium-ion (Li-ion) battery has already fallen 82% from 2012-2020, according to IHS Markit. Battery prices are expected to drop further to as low as $73/kWh by 2030, if not sooner. This will only lead to greater EV adoption. Overall operating costs are already lower for EV compared to internal combustion engine (ICE) vehicles.

With a 5-minute battery swapping option (pushed by Nio in China) and improvements in battery technology, ICE’s remaining edge, i.e. quick refuelling, may not be there for long. The biggest reason for EV transition is not sheer economics, or supply and demand. It's about self preservation of humanity. Highway vehicles release about 1.6 billion tons of greenhouse gases into the atmosphere each year—mostly in the form of carbon dioxide (CO2).

LEGISLATION

Major markets are wholeheartedly embracing EVs. Many countries are set to ban the sale of internal combustion engines. Due to mounting environmental pressures, some countries like the UK, Norway, France, Germany and Japan, have brought in legislation banning the sale of new non-electric vehicles as early as 2025. These are bold moves unthinkable even in the late 1990s.

AI / SELF-DRIVING TECHNOLOGY

It's the next frontier of tech competition, in search for near-perfection through constant iteration: Numerous parties are racing to roll out autonomous, self-driving vehicles for fleet and private consumers alike. The main distribution method: the internet.

Companies like Einride, the Swedish company, which has developed a system whereby an operator can remotely control multiple self-driving trucks at once. Dozens of companies from Apple to Baidu, and from Tesla to Waymo, have rolled out trials of self-driving software, and "robotaxis".

Much of the driverless technology already in use exists: in industrial settings like mines and warehouses. Whether self-driving on today's roatds actually comes next year, or 10 years from now, there are "beta" (test) versions out there accumulating billions of kilometers of real-life data, which is helping train the AI behind it. When can we build common-sense reasoning into cars, or into computers that run them?

Will self-driving tech really disrupt the auto market, and If so, when? It's still anyone's guess. However, the era of full self-driving vehicles is already a rubber-meets-the-road moment. Yes, it's still far from perpect. But road accidents due to driver error already take 1.35 million lives each year.

Full self-driving vehicles have already caught the world’s imagination, as demonstrated in Abu Dhabi through its fleet of "robotaxis", and China's Baidu in Beijing.

BATTERY 

EVs used to be known as slow, short-range vehicles. That was 100 years ago. Change has come, thanks to battery tech enhancements, and the likes of Lucid, Tesla, Rivian, Nio, BYD, Xpeng. Lucid Air Dream Edition has a 837-km (520-mile) range, and goes from 0 to 100 km/h in 2.93 seconds. Tesla's Model S Plaid is anything but slow, it goes from 0 to 100km/h in 1.9 seconds, and claims a 560-km range. The Rivian R1T has a 505 km (314 miles) range; it's a pick-up that goes from 0 to 100 km/h in about 3 seconds.  

Even legacy automakers like BMW, Honda, Toyota, GM, Renault, etc have embraced the idea of turning cars into computers on wheels. Thousands of petrol pumps around the world are being turned into charging stations-cum-retail outlets, so recharging isn't much of a problem. The home charger kit is also an option.

INTERNET:

Tech companies pour research dollars into car-to-car communications and internet-of-things. With 5G rollout as well as broadband communication satellite constellations, "robotaxis" and transport-as-a-service will become increasingly likely. Now, electronics companies are crossing over into car-making. For example, Foxconn, the main production partner for Apple, is reportedly considering developing a self-driving car of its own. The Taiwan-based group has been supplying parts to other major carmakers, including Tesla Inc.

Key numbers to know

▶ In 2021, overall global car sales grew to around 66.7 million — a modest 4.5% rise from 63.8 million units in 2020.

▶ As a market segment, EV sales went up by 108% in 2021 from 2020 figures, according to Statista.

▶ In terms of geographic distribution, China led the pack in EV sales with 3.3 million units sold; Europe was No. 2, with 2.27 million; the US at No. 3, with 1.7 million, and the rest of the world at about 486,000 units.

▶ In each of the 4 consecutive quarters in 2021, over 1 million EVs were sold. This is just the first step in a journey towards green transport.

▶ This 2022, EVs could see a “breakthrough moment” as the battery-powered trucks enter the mainstream.

▶ By 2026, the Union Bank of Switzerland (UBS) predicts that electric cars will account for 20% of new car sales, 40 percent in 2030, and almost 100 percent in 2040.

▶ By 2035 — or in another 13 years — IHS Markit claimed, new car sales would have to shift all-electric in order to reach 95% electrification by 2050.

▶ By 2027, Dubai seeks to deploy up to 4,000 ‘robot taxis’.

These are the key EV trends to keep an eye out for:

US

There’s a flood of new EVs coming out of America this year. Top US automakers are set to start selling electric versions of one of Americans’ favourite vehicle type: pickup trucks.

Ford opened the pre-order banks for the $40,000 F-150 Lightning last month. Production begins June 2022, with deliveries set by September 2022. Last year, Ford sold more than 27,000 Mach-E’s in the US — pushing it up to No. 3 spot behind the Tesla Model Y and Model 3. Lightning’s arrival is dubbed as biggest auto industry disruption since Henry Ford introduced the Model T in 1908.

GM’s Hummer is set to begin rolling out later this 2022. Next up: the Cadillac Lyriq Luxury SUV in 2022. Chevrolet Silverado and GMC Sierra pickups were revealed on January 5, 2022.

Harley Davidson is not far behind. Its “LiveWire” electric motorcycles become all the rage in America, and revenues are up 32% for the bike maker.

Since 2021, more than $200 billion worth of investments in EV had been announced by US manufacturers. Top US universities continue their research and development in the sector. Now, Detroit is set to build a road that charges electric cars.

China

China has over 400 registered brands in the new energy vehicle (NEV) industry. It has more than 500,000 electric buses, which accounts for 98% of the global figure. China’s  14th five-year plan (2021-2025) gives a strategic push for EV industry expansion.

Tesla is big in China — with about half the 936,000 vehicles the company delivered last year coming from its Gigafactory Shanghai.

Bloomberg has already declared China as a “clean-energy powerhouse”. Dig a little deeper, or just do a quick check on Alibaba — Chinese companies offer a whole range of inexpensive mini- to industrial-grade hydro-electric generators, wind turbines, and batteries from various makers.

China already dominates in the global solar panel and EV production, thanks to backing by state-controlled banks. As of 2020, more than 3 million passenger EVs were sold in China — more than double the number sold in the US.

Cut-throat local competition among the 400-odd mainland EV makers has produced some losers, but also a few global winners — including Li, Nio, Xpeng and BYD.

Significantly, Nio boasts 1.6 million registered users, including 200,000 daily users of its app. China also offers thousands of dollars worth of subsidies for EV buyers, while buying ICE cars had been dis-incentivised.

India

Between now and March 15, 2021, there will be at least 6 EVs that will be rolled out in the Indian market. These include the Ford Mustang Mach E, Mini Cooper SE (from Rs50 lakh, $66,700), Tata Altroz EV (Rs14 lakh, $18,676), Volvo XC40 Recharge (Rs60 lakh, $80,000), Mahindra eKUV100 (Rs8.25 lakh, $11,000) and Tata Tiago EV (Rs6 lakh, $8,000). 

Tata, which already has two EV models (Nexon EV and Tigor EV) out in the market, saw a 439% growth in EV sales in 2021. The Indian carmaker sold 13,500 units of its Nexon EVs (starting price: Rs14.29 Lakh, $19,060), with a decent range of 300-km. A new generation of electric scooters coming out of the subcontinent, too.

India's electric vehicle market was valued at $5.47 billion in 2020. It is expected to grow three-fold in another four years, to $17.01 billion — a compounded annual growth rate (CAGR) of 23.47% over the forecast period (2021-2026), according to projections made by Mordo Intelligence. India gives strong legislative support for EVs: The Ministry of Power issued a clarification stating that no license is required to operate EV charging stations in the subcontinent.

Europe

The European EV market is on fire. EV sales more than doubled in 2020 to 750,000 and jumped again in 2021, with sales of 1,143,000 units or 10.3% of the market.

Last year (2021), the Volkswagen Group sold a record number of roughly 762,400 plug-in electric vehicles, an 80.6% jump (compared to 422,000 plug-ins in 2020), which is 8.6% (new high) of the total volume of 9,305,000 units sold in the continent. According to Schmidt Automotive, EV sales will reach a market share of 60% in Western Europe by 2030, or 8.4 million vehicles. A potential booster for demand are the inexpensive models such as the Dacia Spring (priced $14,100, with incentives), compared to VW ID.3 (priced at around $39,000).

In the UK, more than 305,000 new passenger plug-in cars were registered — almost 20% of the total registrations of 1,647,181 (up 1.0% year-over-year) in 2021. Also last year, EV registrations were up in major European states: 169% in Italy; 105% in Germany; 75% in Denmark; 32% in Spain; 24% in France (December data). New EV sales in Norway rose by 25% in 2021 to a record 176,276 cars, of which 65% were fully electric, up from 54% in 2020. The rate of EV adoption on the continent is no less than feverish. EV innovation is on: teams in Sweden and France are testing "EV charging highways", in which cars get charged while on the move.

Japan, South Korea

EV sales in Japan are negligible: Registrations for imported EVs totaled only 8,610 in 2021, though it more than doubled from 2020 (at 3,238 units sold that year). Faced with the climate-change challenges, Tokyo has pledged to be carbon neutral by 2050, thus shifting from its earlier drive of defending its legacy automakers. It now aims to almost halve emissions by 2030 from 2013 levels. Shockingly, Japan is looking to ban sales of gas-fueled vehicles by the mid-2030s.

Also recently, the Tokyo government has doubled the amount of subsidies to a maximum of 800,000 yen ($7,000) in November to make EVs more appealing to customers. Toyota, Nissan and Honda Motor Co. have all rolled out new EV strategies. Toyota, the world's biggest automaker, is coming out with 5 EV models this 2022. Shockingly, Japan is looking to ban sales of gas-fueled vehicles by the mid-2030s.

Osaka-based Panasonic, one of the world’s biggest suppliers of EV batteries, is also one of the most technologically advanced. It has supplied batteries to Tesla with the 18650 cylindrical batteries. Now, it is poised to mass produce the much bigger 4680 cells, claimed to boost ranges by over 15%, while reducing cost, from next year.

The South Koreans are not to be left behind: they account for 1 out of every 3 EV battery sold around the world. Facing toughening competition with Chinese rivals, the South Korean trio -- LG Energy Solution, Samsung SDI and SK Innovation -- supplied a combined 47.8 gigawatt-hour (GWh) equivalents of EV batteries in the January-March 2021 period, up 127% from a year earlier, SNE Research reported.

What happens next?

It's clear: The EV race is on. Though growth is uneven, the landmark reached in 2021 suggests a turning point, as the forces at work have completely changed transport industry dynamics. The biggest winners: customers and the environment.

Innovation is a key driver of change. A confluence of developments — software/AI, broadband mobile internet, inexpensive computers — will bring fresh possibilities, including the inevitable disruption of the old in order to give way to the new. So even if you won’t get the unit you booked today delivered tomorrow, a little patience is a virtue.

The EV transition has been about 100 years in the making. A few more weeks, or months, of waiting won’t hurt. That makes the EV drive unstoppable.