In spite of rapidly increasing adoption of electric vehicles (EVs), their competitiveness in terms of performance and pricing with internal combustion (IC) engine vehicles still seems a farfetched objective. Sluggish developments in the battery chemistry combined with the scarce supply of raw materials have been major roadblocks in the EV market establishment. Stakeholders in the EV market have already invested more than $150 billion between 2014 and 2018 to overcome the challenges faced by EVs. While automotive OEMs have been key contributors in terms of investment, government support in form of subsidies and tax incentives has played a pivotal role in ensuring EV adoption.
As the government subsidies and tax incentives look set to run-out, it is important for key stakeholders to adopt effective strategies to ensure EV adoption. Efforts must be put in by EV battery manufacturers and automotive OEMs to bridge the gaps between EVs and IC engine vehicles in terms of performance and cost.
Battery manufacturers need to overcome the cobalt bottleneck while improving the energy density of batteries. NMC 6-2-2 and 8-1-1 chemistries are fairly promising and leading manufacturers such as CATL, LG Chem, Panasonic, and SK Innovation have been actively working towards the commercialization of high-nickel and low-cobalt lithium ion batteries. In the long term, battery manufacturers need to ensure the commercialization of new battery chemistries such as solid-state li-ion batteries and fuel cells. These chemistries have high energy density, high power density, and fast charge receptiveness which makes them suitable for high-demands of the future vehicles in terms of consumer experience and performance.
As the EV market looks for its early adopters, shared business models will play a key role in improving EV adoption. The average range of current EVs is suitable for the requirement of ride-hailing companies. Moreover, a total cost of ownership analysis over a period of 10 years suggests that EVs provide a financial advantage to ride-hailing companies over IC engine vehicles even without subsidies. Ride-hailing, car rental, and peer-to-peer car sharing help consumers experience EVs without owning them. Peer-to-peer car sharing allows EV owners to offset the high-initial cost of the vehicle. Leading OEMs have already started entering the shared mobility space through partnerships (OLA Cabs and Mahindra Electric) and launching of own platforms (Maven by General Motors). To become the vehicle-of-choice over IC engine vehicles in the long term, electric vehicles must provide enough value to consumers. Connected, autonomous, and shared features will play an important role in ensuring mass adoption of future EVs.
Approaching EV market development in a strategic manner will be important to ensure growth in the coming years. All in the EV market stakeholders must join hands to eradicate all the bottlenecks that are currently restricting the mass adoption of EVs
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