Between now and 2022, at least 50 electric vehicles will be launched. They'll be coming from the likes of Volkswagen, Diamler, and General Motors. Heck, even Dyson is getting into the game. But why this rush to get EVs on the road? It comes down to two things, Tesla and upcoming regulations.
“Nobody doubts that the future will be electric. The car companies dragged their feet with electric. Now they are being dragged into it by Tesla and by regulations,” said Erich Joachimsthaler, founder and CEO of brand-strategy firm Vivaldi to Bloomberg.
Tesla makes sense as they have created a cult of personality with rabid fans and somehow selling vehicles like hotcakes. As for the regulations, various countries such as France and Great Britain have announced bans on internal combustion engines in new vehicles in the near future. Other places such as China and the state of California are considering similar bans. China has also introduced regulations meant to cut emissions and pollution by 2030. One of those is for automakers to sell a certain percentage of "of so-called new-energy vehicles -- which include electric cars" to obtain credits to sell models with internal combustion engines.
But there are questions about this move. For one, how is any automaker going to make money with EVs? At the moment GM loses $9,000 for every Chevrolet Bolt EV sold, while Fiat Chrysler Automobiles loses an eye-watering $20,000 on each Fiat 500e sold. Battery tech is one of the key reasons for this, but new technologies and improvements are helping bring the price down.
Also, will consumers embrace this onslaught of EVs? Last year, EVs only made up less than one percent of the U.S. market.
“Companies are committed to electric cars, but there is little evidence that there is a lot of consumer demand for it,” said Kevin Tynan, senior analyst with Bloomberg Intelligence.