Although the electric vehicle industry faced a sales slump in 2020, the EV market has been in the front of a lot of business initiatives so far in 2021. Increased public awareness of climate change combined with regulatory efforts to reduce fossil fuel consumption has created an enticing market for EVs to truly thrive in the upcoming years; Deloitte actually expects EVs to account for 32% of new car sales by 2030.
Overall electric vehicle sales declined by 25% in the first quarter of 2020 with U.S. sales declining by 33%. In March 2020, the U.S. government revised fuel-economy standards to a 2026 target of 40 miles per gallon, from 54 mpg. According to McKinsey’s Electric Vehicle Index, the current low oil prices have been contributing to the EV slowdown since it is significantly lowering the total cost of ownership for vehicles powered by internal combustion engines. Other reasons why consumers have been shying away from investing in EVs include the lack of charging infrastructure outside of major cities, and the unknown costs associated with EV upkeep.
Eight months after those new standards were set, President Biden proposed new policies, intending to accelerate the adoption and production of electric vehicles. Zero Emission Transport Association (ZETA) was launched in November 2020 to advocate national policies that would enable 100% electric vehicle sales throughout the light-, medium- and heavy-duty sectors by 2030. The association pledged to deploy more EV chargers, electrify the federal vehicle fleet and send strong market signals to demand emissions reductions, ultimately positioning the U.S. to lead the clean transportation race.
Car manufacturers have been quick to produce more electric vehicles and boost sales of existing models — about 450 new EV models will be launched through 2022. Here a few developments and partnerships from manufactures and other industry leaders that have been recently making headlines:
- Toyota’s truck subsidiary Hino Motors partnered with Israeli EV start-up REE Automotive to develop electric trucks, buses and commercial vehicles. The team plans to develop their first prototypes by next year.
- BMW and Ford have both invested in SolidPower, a solid-state battery maker, to secure batteries for their future EVs. Ford has previously mentioned that the company would start building an electric F-150 pickup truck in 2022.
- Volkswagen has been looking to ramp up battery cell production for EVs, with a plan to roll out a new unified cell by 2023 and use it in up to 80% of its EVs by 2030. The manufacturer also stated that it planned to operate roughly 18,000 public fast-charging points across Europe by 2025.
- GM announced in April 2021 its plans to roll out an electric version of the Chevy Silverado, and deliver more than one million EVs across the world by 2025. The company also mentioned its plan to completely phase out gasoline- and diesel-powered vehicles from its showrooms by 2035.
- LG Chem teamed up with GM to invest more than $2.3 billion to build a second U.S. battery cell plan for EVs in Tennessee. This new plant would help build a solid and stable U.S.-based supply chain that would enable everything from research, product development and production to the procurement of raw components.
- UPS purchased 10 electrical vertical takeoff and landing aircraft from Beta Technologies, and committed to purchasing 10,000 EVs from Arrival Group. The carrier also announced its goal to reduce greenhouse gases from its ground business by 12% and source 25% of its electric needs from renewable sources by 2025.
- Amazon Web Services is collaborating with ABB to develop a cloud-based solution that would enable real-time management of EV fleets. This project would help operators speed up the electrification of transport fleets and maintain 100% business continuity through their transition to electric, and is expected to be deployed by the second half of 2021.
- Uber partnered up with Arrival to develop an electric car specifically for ride-hailing and plans to start production by the third quarter of 2023; Lyft also announced a similar plan to go all-electric by 2030.
While large carriers often offer auto insurance for specific electric and hybrid vehicle models, a handful have started working directly with car manufacturers to offer a simplified insurance-purchasing experience:
- Nationwide partnered with Amazon-backed electric truck maker Rivian to link insurance with the vehicle, offering quicker and comprehensive diagnoses. Customers could also get discounts on their insurance rates and insure their home, recreational equipment and other vehicles.
- AmFam announced a partnership with Tesla to expand its auto insurance offerings to the state of Illinois. Tesla Insurance Services currently offers coverage in Texas and California.
In April 2021, President Biden proposed a call fo $100B in EV rebates as well as a proposal for a $7,000 tax credit for EV buyers, to further entice consumers and dealers to seriously consider EVs. Neither proposal has been decided on, but the conversation alone could drastically alter EV adoption in the U.S.